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Case Study 5:
Outsourcing / Off-shoring
The Client:
A $9 Billion, privately held company in the Midwest with practitioner experience and a specialized software package that they sell to other companies and competitors in the same space.
The Challenge:
This firm saw an opportunity to work with the largest firm in India by marketing their software to them. This Midwest company knew that they would need to increase the capacity of their IT/Engineering staff if they were to be able to provide the same level of service to their own company, and the firm which they had just entered into a mega-deal. The client’s customer wanted the client to handle all four levels of support, as well as maintenance and enhancements. The client’s staff was struggling just to keep up with the internal demand on their department. The client needed to issue a Request For Proposal, find a third party service provider, in India, that could be a longer term business partner, handle point of sale software, inventory, finance and accounting applications, and be trusted with the client’s source code. Finally, a contract had to be negotiated that would be advantageous to the client and ensure that all of the multiple country conditions in such a contract were addressed.
The Solution:
HBS Consulting, working with a business partner in India provided expertise in Off-shoring, Procurement, and Information Technology to assist the client in executing our 153 step plan that produces the desired off-shoring result. The engagement team used its extensive experience to guide the client to successfully accomplish the following:
- Select the correct model with which to engage an offshore partner
- Select from a field of qualified vendors based on two quantitative and one qualitative evaluations
- Determine what to offshore, establish realistic expectations and service level agreements
- Be aware of what otherwise would have been hidden costs
- Develop the contractual framework
- Establish a relationship structure between the client, their customer and the third party service provider
- Define the knowledge transfer / retention process and program
- Clarify and thereby create an intellectual property hierarchy
- Address cultural differences so morale did not suffer |
The Benefits:
HBS Consulting assisted this client by utilizing our off-shoring methodology to produce information critical to selecting the right business partner and model. This process includes “talking points” for employees and the news media, a defined project schedule that is scalable to fit the size of the client’s model, architecture, and plan to achieve needed scalability, both today and in the future. Other considerations addressed were compliance to standards and various regulations, cost savings, operational efficiencies, and the organization necessary to address these items. Several specific benefits realized by the client were:
- Cost savings
- Time zone advantages
- Skilled IT staff
- Quality of projects
- Shorter turn around time
- Mature governance model(s)
Case Study 1 - Case Study 2 - Case Study 3
Case Study 4 - Case Study 5 - Case Study 6
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