The Hindu Business Line : A <I>Tuft</I> decision

If you are working day and night to grab a part of the outsourcing market sweeping into India, knowing what really worries a US-based decision-maker might help. Here's what runs in his mind before he makes his choice.

Steve Tufts

CHOOSING to send jobs to locations such as India is a tough call for most managers whose hearts and homes are in the US. But it must have been even tougher for Steve Tufts, vice-president, Alcatel, the French telecom company. When he made that call to send jobs overseas, his brother lost a position in the same company.

But Tufts is unperturbed. It was difficult he says, but it was imperative as well.

After all, the economics and the benefits that accrue to an organisation are compelling reasons to work with partners across borders.

Tufts recently made a presentation to employees of SlashSupport, a Chennai-based organisation that offers technical helpdesk services to Alcatel. What follows are a few points he made during the presentation and in a short chat with eWorld later.

Significantly, the presentation was titled, "Crossing the Rubicon". The phrase has survived from the times of Julius Caesar who had to cross the turbulent Rubicon River in his quest to conquer Italy. According to Tufts, "The phrase refers to any person committing himself irrevocably to a risky course of action."

Tufts attributes the success of this change to the relentless communication that Alcatel had with its employees. He says, "We were upfront with employees so that they knew what to expect." Interestingly, some of them even trained Indians who would perform those very roles from a remote location. How did he manage to get that done? "We offered incentives to employees to train their Indian counterparts." The incentives included cash components ranging between three and six months' pay. The company also arranged for placements for employees. These small things helped. For, says Tufts, it is important that existing employees participated in the transition.

He says that timing the decision to outsource work is critical. He quotes a Gartner report that asks a few relevant questions. Answers to those, says Tufts, help you realise whether you are ready to outsource. These questions relate to issues such as, the need to reduce cost, to consolidate multiple supplies, make sure that IT helps achieve business goals, help a division fall in line with global corporate policy, focus on core business, supplement or scale up staff and improve service levels.

But it is easy to be misled when there is so much noise around a decision-maker regarding outsourcing. Says Tufts, "You tend to get so many calls from fly-by-night operators. You just ignore them."

But how does he conclude that a call is from someone who can't keep a promise? Tufts says, "It is clear from the answers he gives your questions. You try to gauge the size of his team and he gives you unconvincing answers." A typical answer, from frivolous bidders, to Tufts' queries on team-size is: `I have about 10 people, but we can easily scale up to 100 in two days.' Then, Tufts gets the feeling that all is not well.

He says it is also important to see whether the partner, who takes up outsourced work, has competence. He says, "We did evaluate others before deciding on SlashSupport. A big IT major was interested. But its core competence was not technical support but research and development. So, even though SlashSupport is a smaller company, we valued the focus on technical support." In his own words, players with expertise in a particular area are preferable to one-stop shops that offer everything.

But, he also makes background checks to make sure that a chosen vendor has market credibility. After all, a vendor gets access to confidential data. An unknown vendor is a risk a large outsourcing company cannot afford.

How did he sell the concept of offshoring to his management? "It is important to focus on what important resources could be diverted to more critical functions such as sales, R&D, and the like."

Selling the outsourcing concept internally might not have been easy for Tufts for other reasons too. It is learnt that an earlier outsourcing effort in Alcatel's software development didn't go the whole hog because the team was built around a single, very capable manager. Once he resigned, the outsourcing effort floundered a bit. To sell the concept of entrusting technical support back to an Indian firm - even if it was a different company - would certainly have been tough. Tufts was non-committal when eWorld asked him if Alcatel would foray into software development outsourcing to India again.

What are the key concerns that a manager faces when he decides to send jobs overseas? "Loss of in-house expertise could well figure at the top," he says. To address this issue, it is important to keep small core expert teams and management teams in-house." It is also important to keep development of intellectual property within your own premises, he says.

And `manage, manage, manage' is his mantra. What that means is that ceaseless communication and fine-tuning of vendors' actions helps achieve goals.

Tufts says, "Especially during the phase when manpower is being increased, it's important to put in extra management effort and time."

But are all offshoring decisions successful?

What if something does not go along expected lines? Says Tufts, "You should only offshore when you can. And, make sure the worse-case scenario costs are understood and managed (through agreement) with the vendor."

Finally, for an outsourcing manager, losing staff could affect business continuity. Tufts, as always, offers a simple solution: Overstaff up front.

Picture by Bijoy Ghosh

bharatk@thehindu.co.in

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
A Tuft decision

India's not the only winner

Just spread it!

Closing in on action

With info at every turn

Problems with Excel files

Quiz

Cartoon

Reading the picture right

Good read

Bang on target