Information Systems Project Management

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(No Transcript)
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Information Systems Project Management

• The Impacts of Globalization and Outsourcing

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Dispersed / Global Teams

• Now that weve covered the basics of project
  management, we will be spending the next couple
  of classes discussing the implications of
  internationalization on the U.S., before turning
  you back over to Professor Jiang for the rest of
  the term
• Today we are lucky to have both Dan and Tandy
  Gold Camilli with us as guest speakers

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About Dan Camilli

• Dan has traveled extensively through the Far
  East. A former Fulbright Scholarship recipient to
  China, Dan studied at Beijing Normal University,
  and traveled throughout China.
• Dan also received a Keizai Koho Fellowship to
  Japan (the Japanese equivalent of a Fulbright),
  and traveled extensively through Japan as a guest
  of the Japanese government.
• Dan has also worked in Korea, and traveled in
  Hong Kong and Taiwan. Dan has published articles
  on globalization and multi-cultural issues.
• A rabid Red Sox fan, Dan can be reached at
  bosox973_at_aol.com.
• But before we hear from Dan on some of the
  impacts of Globalization

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Tandy Camilli Bio

• Veteran global program manager and project
  turn-around specialist with 20 years Fortune 50
  experience
• Was SR VP and Offshore Program Manager for
  FleetBoston Financial
• Recently worked at Convergys with me, more
  recently completed a stint at North Highland
  Corporation as a Strategic Consultant

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Tandy Camilli Bio (cont)

• Moved up the technology ranks from programmer to
  business analyst, then project manager, to
  large-scale enterprise-wide technology program
  manager, establishing an outstanding record of
  business process and technology leadership.
• As Principal for both IBM and PWC in Knowledge
  Management / Data Warehouse, she initiated many
  complex technology programs and initiatives, and
  advised many CEOs across diverse industries
  including financial services, government,
  healthcare, and high technology.

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Tandy Camilli Bio (cont)

• Upon graduation, Tandy was asked to join the
  faculty of the Boston University Metropolitan
  College Graduate School of Computer Science,
  where was on the faculty for 9 years
• She is a past President of a local Toastmasters
  chapter
• She is founder/facilitator of the Offshore
  Interest Group
• In November 2004, she published a book titled
  Outsourcing Software Development Offshore
  through Auerbach Press
• Tandy can be reached at tgold973_at_aol.com

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Dispersed / Global Teams

• Tandy led a successful IT Outsourcing Program
  from the US to India from 2001-2003, and has
  lived to tell about it
• Please join me in giving a warm welcome to Tandy
  Camilli

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Tandys Agenda

• The Fleet Offshore Program Brief Overview
• The Offshore Interest Group
• Offshore Maturity Model
• Managing Risk
• Offshore / Nearshore Countries and Locations
• Global Risk Factors
• Program and Project Management Principles
  International / Cross-Cultural Checklist
• Choosing the Right Number of Vendors
• Lessons Learned
• Writing the Book

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The Fleet Offshore Program Brief Overview

• Program initiated summer 2001 Over 100 FTE (Full
  Time Equivalents) by January 2003, representing
  over 10 of size of entire Technology
  Organization
• Moved quickly using big bang approach!
• Initial investment costs were over 2 million
• Upgrade to network security via firewall
• Knowledge transfer costs
• Met all quality, timeline and financial
  objectives
• Savings over 30 of IT budget year over year
• Average consultant cost dropped from 125 to 30
  per hour

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The Fleet Offshore Program Brief Overview

• Initial focus on maintenance support (back-end
  and consumer/wholesale baking systems) However,
  quickly found synergies in project development as
  well, and moved into Business Process Outsourcing
  (BPO) or Call Center space
• Model was co-sourcing with an average 30/70
  percent on-shore / offshore team mix (looked to
  lower onshore percentage over time). Locations
  included India, the Philippines and Canada.
• No employee layoffs shifted on-site consultants
  Offshore

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The Fleet Offshore Program Brief Overview

• Program goals included not only cost savings in
  replacing higher priced consultants, but also
• 1) supporting employees to move out of
  maintenance/support to roles higher on IT pyramid
• 2) quality improvement of maintenance and
  support function
• 3) hedging availability of scarce resources such
  as legacy (older language) developers
• 4) aligning our operation to leverage global
  economies.
• Biggest challenge was employee acceptance in
  shaky economy. Was able to work through
  credibility issues to create necessary buy-in

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Strategy Incubation The Offshore Interest Group

• Offshore Interest Group is an informal group of
  Offshore Program Managers that meet by phone
  monthly to share ideas and information. Inception
  was mid 2001.
• Members include Citigroup, Gartner, Marsh
  McLennan, MetLife and Verizon. In total,
  represent over 30 years of Offshore experience.
• Discussion on vendor selection showed a maturity
  model in which organizations evolve their vendor
  selection strategies over time

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Strategy Incubation The Offshore Interest Group

• Key underlying themes of cost value proposition
  from the OIG
• Offshore is a train that has left the station.
  The savings, methodology, and success of the
  model is proven. The only question is whether you
  are an early, late (or too late!) adopter.
  Nothing will stop this train!

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Strategy Incubation The Offshore Interest Group

• Key underlying themes of cost value proposition
  from the OIG (continued)
• There is a definite maturity model. Most early
  program managers have to deal primarily with turf
  issues and biases of project leads.
• Maturity (organizational experience and comfort
  with Offshore) strongly impacts vendor choices,
  selection of applications to go offshore, scope
  and breadth of activities in a very material way.
• Bottom line Offshore Outsourcing is proven, and
  if your organization cant make it work for you,
  you are in trouble (or will be soon)!

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Offshore Maturity Model
Mature (gt7 years)
Intermediate (3-7 years)
New (lt3 years)
Key Cost Value Concerns
While all organizations focus on savings, the
experience of the Offshore Interest Group
suggests that as organizations mature, pure price
advantage (Offshore services as commodities)
becomes more and more important
Do they know our business?
H
M - L
H-M
Perception of Safety Factors (US based,
relationship)
M
H
L
Can they talk to us in way that is familiar to us?
H
L
L
Metrics / Management Reporting Support?
H

H
L


Support Nearshore as well as Offshore?
H - M
H-L
L
High CMM Level?
M-L
H- M
H-M
Multiple Offshore Locations?
H-L
H- M
H-L
Dem Knowledge Specific App / Industry?
H
H-L
H-M
H-M
H
H-L
Price Competitive?
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Where to Offshore? The Reality

• India dominates with majority total of offshore
  development revenue
• Specific reasons for leadership in India
• Dont make mistake of generalizing Offshore to be
  everything out there
• Know history and context of India-based growth
  for best utilization of Offshore
• High cultural values on technology knowledge
• Historical pressures toward technology excellence
  in population
• Middle class values similar to U.S.

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Where to Offshore? The Reality (cont)

• Most companies choose a vendor first, not a
  country
• Outside of India, most successful Offshore
  implementations are captive
• Language and cultural barriers
• Dont overlook government differences
• India is largest democracy in world outside of US
• Workforce characteristics are key
• Think of educational system and language skills
  as resource infrastructure
• South America up and coming
• E.g. Brazil re-investing current Offshore revenue
  right back in to the educational system

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Managing Risk Country Specific
FactorsSource Gartner Strategic Analysis
Report 9/24/2001

• India dominates - at least 80 of total offshore
  development revenue
• Political stability, marketing skills,
  bureaucracy / regulations are also key
  country-based factors

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Managing Risk Country Specific
FactorsSource Gartner Strategic Analysis
Report 9/24/2001

• Governmental Support
• High India, Ireland, China
• Low Russia. Medium Canada
• English Proficiency
• High India, Israel, Ireland, Canada, Philippines
• Low China, Russia
• Educational System
• High India, Israel, Russia, Ireland, Canada,
  China
• Low Philippines

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Managing Risk Country Specific Factors
(cont)Source Gartner Strategic Analysis
Report 9/24/2001

• Telecommunications Infrastructure
• High Israel, Ireland, Canada
• Low India, Russia, China, Philippines
• Cost Advantage
• High India, Russia, China, Philippines
• Medium Israel, Ireland, Canada

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Managing Risk Country Specific Factors
(cont)Source Gartner Strategic Analysis
Report 9/24/2001

• Availability of Skilled Resources
• High India (for now!), Russia
• Medium Israel, Canada, China, Philippines
• Low Ireland
• Cultural Differences with US
• High India, China
• Medium Israel, Philippines
• Low Ireland, Russia, Canada

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Global Risk FactorsGathered from US
Department of State as of December 2001
http/www.state.gov
Risk Factors (in priority order by of
incidents/severity)
High
Philippines Indonesia Argentina
India, Russia
China, Brazil, Mexico,Thailand1
Belgium, France, Germany, Ireland, Italy1,
Spain1, UK
Australia, Canada, Hong Kong, Hungary, Ireland,
Norway1, Poland, Singapore
Low
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Program/Project Management PrinciplesInternati
onal / Cross-Cultural Check List

• Dont underestimate cultural and professional
  myopia!
• Executive, top-down support important
• Over-communicate
• Hidden costs software vendor consents, disaster
  recovery process, security network infrastructure
  

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Program/Project Management PrinciplesInternati
onal / Cross-Cultural Check List

• Knowledge transfer effectiveness (quality),
  brevity (ROI)
• Exchange rate risk, taxes, legal, intellectual
  property ownership, health safety standards,
  OFAC (dangerous person) screening
• Postal / mail, transportation reliability,
  payment methods
• Cultural role of women, linguistic understanding
• Level of support what does 24 x 7 really mean?
  Extra hidden costs of 24 X 7?

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Program/Project Management PrinciplesInterna
tional / Cross-Cultural Check List

• Negative media slant
• Incompatibility between CMM level organizations
• Updated technology and audit practices / policies
• Network performance
• Long term availability of resources
• Bottom line driver Understand Chances of Success
  vs Impact of Failure

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Nuts and Bolts Preparation

• Offshore is a Competency
• Requires and pre-supposes a certain level of
  process sophistication
• Cannot be achieved over-night
• Watch closely for market shut-outs
• Reminiscent of early 60s and 70s when late
  adopters seemingly lost market share overnight
• Even if technology is not your core business, the
  savings from Offshore is so enormous it can
  radically raise the barriers to entering new
  markets or servicing existing ones
• Strategic Key to that Competency is Strategic
  Staffing
• What skills remain in-house and why?
• As in all strategic efforts, if you dont know
  where you are going, youll end up someplace
  else

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Nuts and Bolts Preparation

• Tactical Key to that Competency is Clarity of
  Process Communication
• Informal methods fall apart when teams are
  co-located across the globe
• Program / project management center of excellence
• Network Security Architecture
• Establish cross-functional team
• No difference between access across the street
  and across the world
• Bottom line If the London Stock Exchange can do
  it, your organization can too

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Nuts and Bolts Program Management

• Establish Strategic Goals
• Define Vendor Interface Guidelines
• Contractual relationship
• Roles and responsibilities
• Create Communications Plan
• Establish a Risk Management Program
• Define Application Selection Criteria
• Review Vendor Consents
• Define Documentation Guidelines
• Define the Offshore Methodology

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Nuts and Bolts Sample Project Step by Step

• Validate Operational Requirements
• Manage Application Risk and Compliance
• Support Re-Deployment of Contractors and
  Employees (if any)
• Form the Stage One Offshore Team
• Create Project Plan and Issues List
• Create Functional Specifications
• Complete Offshore Application Handbook
• Complete Offshore Hiring Process
• Structure and Execute Knowledge Transfer
• Complete Offshore Operations Guide
• Ready for Offshore Launch
• Offshore Team Returns to Country of Origin
• Post-Launch Monitor Offshore Application
  Performance

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Choosing the Right Number of Vendors Pros and
Cons
More Vendors
Less Vendors
?
Lowest Prices Exploit Vendor Strengths Company
Clout Extensivehand-holding Less Dependency
Risk
?
?
?
?
?
Wildcard Volume FTE Price Impact
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Lessons Learned
Vendor Selection
Positive Growth
Vendor Management
Country Risk
Blinders even less applicable than usual (e.g.
must have x yrs experience in MY app)
Consider multiple stage internal sales strategy
onshore, nearshore, offshore!
Monitored but not fretted over understood as
potential cost of doing business
Balance vendors strategy with maturity in
Offshore, size of program, program goals
RFP
Non-linear factors have legitimate place in
decision making Network with Offshore PMO
peers!
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Writing the Book My Experience

• For me, the writing content itself generally came
  naturally BUT Incredibly time-consuming
• Discipline Didnt allow myself to go to bed
  until I had written 5 pages (good or bad)
• Sometimes I was up until 300 am, other times I
  was done in a couple of hours
• Put a lot of pressure on my life that I am still
  cleaning up
• Was working a part-time job that turned into
  full-time
• Fueled by MMs and Snickers fattening and not
  good for me!
• Timeline
• Proposal accepted December 2001
• First draft submitted January 2003
• Final draft submitted March 2003
• Not published until November 2004
• One thing I would do differently try to market
  the book more

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Q A

• Any questions for Tandy?
• Dan will now brief us from his perspective on
  some of the greater impacts of Globalization

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Discussion Points

• Economic
• Environmental
•   
• Cultural
•  

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Economic

• 1. Lost U.S. jobs.
• 2. Labor exploitation abroad

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Environmental

• Greater demand for raw materials and
  non-sustainable fossil fuels.
• Accelerated destruction of the Ozone Layer
  expediting greenhouse effect.

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Cultural

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• Ambiguity concerning cultural identities in a
  global society.
• Attraction of extremist positions in attempt to
  attain cultural identity.

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Q A

• Any questions for Dan?
• Tandy Dan, thank you for coming out to share
  your insight experience tonight!

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Next Week

• Well continue covering the Globalization
  phenomenon and its impact on project teams
• Reading Rest of the Supplemental Readings
• Have a good and productive week!