David Guest - Off-shore managed services
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David Guest discusses his experience using offshore managed services over the past 10 years. He provides examples of how they have implemented managed services for application support and testing. He outlines the benefits they have seen, including unit cost reductions of 40% and service improvements like increased testing coverage and reduced incident volumes. He notes that properly incentivizing both internal teams and partners, building trust, and maintaining good governance are keys to success with managed services models.
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David Guest - Off-shore managed services
- 1. David Guest Do Offshore Managed Services Really Work?
- 2. Objectives and Agenda Background Experience Provide Some Real Examples and Data Debate: What can we use a Managed Service for? What has worked well for other people? What should people look for from their suppliers? Is there still a place for T&M contracts?
- 3. Over the past 10 years I have used off-shore extensively: 2000 - 2006 T&M Offshore (O/S) development and support using very large GE programme Largely staff augmentation/body shopping 2006 - 20010 Developed O/S programme (now 500+ FTE and growing) Introduced Managed Services for Core Support 2010 - 2012 Developed O/S programme (now 250+ FTE and growing) O/S Managed Services for Support and Testing Managed Capacity Service for development Services
- 4. Managed Services Managed services is the practice of outsourcing management responsibilities as a strategic method for improving operations We have the following managed services: 2/3 Line Application Support (Delhi and Bangalore) Accenture Retail and Supply Chain 100+ FTE JKT Central and Group Systems Independent Testing SQS (Pune) System Testing test creation and execution 70 FTE Regression test automation creation and execution And .... We have Store Break Fix Fujitsu All UK based
- 5. Managed Services Implementation Common Complaints Its harder in India than doing it on-shore We will have to transfer the knowledge Its not as productive as doing it in the UK Its expensive during transition Well lose the IP But if done properly They can be transformational from a service and cost perspective
- 6. Managed Services Benefits Unit Cost Reduction Unit cost saving for support and testing of 40% Effective rates have dropped by over 33% since we moved to managed services Domestic contractor usage has dropped to zero in these areas This is a multi-million pound saving and its increasing Service Improvements Testing coverage has increased by 30%, automation is up to 80% on our retail systems and productivity has increased by 20% Incident volumes and active problems have reduced across all application portfolios by 20 - 40% Regular release cycles have been introduced for problem fixes and small changes System availability has improved dramatically and most systems are within SLAs Intangible IP is better protected Improved documentation and rigour Permanent staff have been freed up and have better career prospects Best practices & disciplines from our suppliers
- 7. What Makes the Difference? Incentivising our teams to accept Managed Services financially, professionally and emotionally Incentivising our partners to improve service and reduce costs risk reward contracts Accepting that we would manage the contract and they would manage the service we have good contracts Trusting our partners and stopping our teams from interfering we choose our partners carefully Building relationships at the highest levels and visiting the teams in India regularly we have no travel restrictions and everyone flies business Commercially we keep our options open we are multi vendor and they all know it