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Offshore Economics Should Include Cultural Nuances

By Kevin L. McLaughlin and Jerry Kenney Although we reduced our annual budget of $1,380,000 by half, we were still under pressure to continue cost reduction and to maintain the high level of customer service while simultaneously meeting implementation deadlines.
May 4, 2004

ITSM Watch Staff

By Kevin L. McLaughlin and Jerry Kenney

In our last article we promised to give you some pointers on how and where to look for savings without reducing either customer satisfaction or services. If the idea of saving $705,000 sounds good to you, please read on.

At Procter & Gamble, we decreased our $1,380,000 annual Support Desk budget in half with no work reduction, no workforce shrinkage, and no degradation in our service measurements. You too might be able to enjoy similar savings.

As you read in our previous articles my friend Bob gave us some very good tips on using the ITIL framework to streamline and optimize our global email services. As a result of these benefits, our team decided to incorporate the development and support of our real time data transport/EAI technologies.

Continuing to be under a lot of pressure to reduce costs, maintain the high level of service our customers were accustomed to, while simultaneously meeting our implementation deadlines, we decided to establish a complete Service Desk, Problem Management and Development team offshore.

Yes, offshore! What a challenge! This was back in 1999 and was considered quite radical. Our plans were to not only have a development team offshore, but to have this group assist in two of the primary ITIL disciplines: Service Desk and Problem Management.

To get started, we drafted a Statement of Work (SOW) and had our Purchasing Department send out a Request for Proposals (RFP). As we wanted to be more flexible in the process we took a different approach than normal. Instead of restricting our requirements to specific skills and technologies, we asked for a group that would easily and quickly adapt to our needs and the changing IT environment.

We determined they would need programming experience in C++ and JAVA, (our strategic languages at the time) and have a strong knowledge of both UNIX and NT systems. We did not ask for experts in any given technology thinking we could quickly train these sharp and experienced resources, and if not, they would probably learn by themselves. We wanted clever people, not just warm bodies.

Imagine our surprise when we opened the responses to our proposal and found that three out of the four cost almost as much as our American-based contract resources. Moreover, they completely ignored and did not respond to our request for Service Desk and Problem Management, utilizing ITIL best practices.

The fourth provider, not only was accommodating on price (their bid was half of what I was currently paying for US-based resources), they had reached a maturity CMM level-five and illustrated a solid understanding of ITIL Service Management processes. In fairness, I need to disclose that we were skeptical about quality and were subconsciously looking for reasons why this was not going to work.

To satisfy our doubts, I flew to Mumbai (Bombay) India to discuss these concerns with the Atos Origin management team and to take a good look at their operations. After two days of meetings, I was convinced they had the expertise and resources to do what was required.

The decision was made to start small, and we contracted a four-person team with a part time project/team lead. The next three weeks were spent establishing processes and physical and operational security. By the end of the third week we were ready.

OK, we now had a team of professionals for half the cost of NA-based resources, but would they be able to get the job done without impacting operational quality or service measures? The first couple of months, it was evident that while the team was capable of doing the work, there was something missing. It was the drive and passion of our American teams. That was it!

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