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Tuesday, February 16, 2010

Mumbai Memo: IT Outsourcing Marketplace 2010

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Written by:   Anirban Dutta Topics: IT Service Delivery,Outsourcing

This article is published by Global Trade Best Practices. The link to the main article is below - http://gtbp.org/index.php?option=com_content&task=view&id=83&Itemid=1

The just concluded "India Leadership Forum 2010" conference held by NASSCOM in Mumbai, India brought together technology & IT services gurus and outsourcing & globalization pundits from all over the world to the Grand Hyatt for three days in the second week of February. This event is arguably the largest gathering of technology executives and was attended by over 1000 delegates representing multiple countries from across the globe. 

The underlying theme, like many other similar industry events was - you guessed it - "Change & Innovation".

As we all know, the words change and innovation has been overly used and abused by corporations trying to monetize its agendas by coupling their message to these words, that it lost its meaning. However, this time around, it did seem very real that the world of outsourcing and IT services will actually see some quantifiable process changes. I believe that the following phenomenon will be evident this year.

Cloud and SAAS are more real than ever: Although we have been seeing bits and pieces usage of cloud computing this past year or so, it is becoming more of a reality this year. The mystic on cloud is definitely being more revealed. Simplistically speaking, customers are seriously looking at reducing their capital expenditure (CAPEX) by depending less on capital heavy infrastructure portfolio. According to Wikipedia, cloud computing is a paradigm shift whereby details are abstracted from the users who no longer have need of, expertise in, or control over the technology infrastructure "in the cloud" that supports them. It is a new supplement, consumption and delivery model for IT services based on the Internet, and it typically involves the provision of dynamically scalable and often virtualized resources as a service over the Internet. The CXO's of the major service providers present in the NASSCOM sessions definitely showed a willingness to promote this technology.

As a derivative result, there will be more uptake of software as a service (SAAS) and application as a service. Companies will also want to utilize the full benefits of cloud by availing the application based services that traditional installed software's provide. This will again drive costs down significantly by eliminating software install and maintenance charges. SAAS will probably become a mainstay in any managed services engagement model for delivering IT services.

Broader usage of new age pricing: As I wrote in my recently released book on finding, structuring and delivering globally deployed IT services & outsourcing deals - "Winning Strategies: Secrets to Clinching Multimillion-Dollar Deals" John Wiley & Sons, 2010, the world of IT services and outsourcing pricing is about to see tremendous amount of changes. Linear pricing of equating more full time resources (FTE's) with more work is changing quicker than we can imagine. Technologies like cloud computing are encouraging customers to venture more into outcome based pricing. This simply means that service providers take full responsibility of delivering outcomes. The "how" and "where" mechanics of delivery will be controlled by the service provider to a greater degree than before.

This is a major shift from traditional price plays. Leveraging offshore capabilities simply as a labor arbitrage ploy will not cut it anymore. All major global and Indian pure plays recognize this and are working hard to process designs to effectively accommodate this new turn of direction. The ability to provide full managed services or variations of managed services with outcome based service level agreements (SLA's) will be critical for service providers that want to win in this new world order.

India as a consumer of services: India is known to the world as an IT and BPO service delivery hub. But, it has recently become quite a consumer of services. The public sector unit (PSU) in India has opened the kimono and major deals are in the works in the next 2 to 5 years. The private sector is also not too far behind either. Needless to say, all major service providers are seriously implementing a "sale in India" strategy whether it is strategic or opportunistic.

Vertical expertise is a must: Simply being a quality system integrator (SI) or providing superior technology support is not enough anymore. Companies need to definitely have the technology capabilities but should have vertical centric offerings, history and frameworks to truly capitalize in today's market. Today customers expect SI's to provide not just direct technology benefits but help them actually strengthen their positions in their own verticals by bringing in superior capabilities.

Relevant, responsible and secured outcome delivery: The ability to quickly deliver relevant customer requested outcomes and present them in multiple formats quickly and effectively will be crucial for the service provider's success. The delivery mechanism should be environmentally responsible (read less utilization of CAPEX heavy energy dependent infrastructure) while having the ability to provide a common security framework across platforms. 

With all these changes in the fray, this year will be a very interesting year for both the customers and the services providers who are both trying to recover from the economic downturn by being innovative in their consumption and sales approach. Will these new directions turn into actual monetary gain for service providers? Well, personally, as I am prospecting customers, I am seeing more interest in transformation discussions than last year. I am hopeful that this year will be a better year than last for all of us in the service delivery business.


Anirban Dutta, a director at CSC is proficient in helping grow IT service delivery organizations. As a key member of a strategic deals group, he played a major role in helping a particular service delivery provider grow its top line from $1 BN to $2BN in 2 years. He is the co-author of a leading book on IT services and outsourcing deal making called "Winning Strategies: Secrets to Clinching Multimillion-Dollar Deals", John Wiley & Sons, 2010. He tweets @ www.twitter.com/duttaanirban1.

Note: All viewpoints depicted in this article are mine and in no way or form represents the viewpoints of my present employer, former employers, present and past customers and collaborators.

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Monday, December 14, 2009

A Guide to Successful PPM Implementation

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Written by:   Anirban Dutta Topics: Negotiation

Over the past few years, we've read regularly about geographically distributed business and the effects of living in a world where information, commercial endeavors, and cultural exchanges are enabled and, in some cases, created by information and communications technologies. The "geography is dead" concept has been presented convincingly by Thomas Friedman in his bestseller, The World is Flat: A brief history of the twenty-first Century1. Friedman's point is that IT has paved the way to global business opportunities that any company, large or small, can exploit. Hence, today's technology has leveled, or flattened, the playing field for competitive business. To compete effectively and efficiently in this flat world, companies need to get the most out of their IT investments. IT is no longer just another department, but rather a key instrument for business growth and survival, whose capabilities can dramatically affect the entire enterprise. Given the complexity and the ever-growing importance of IT, more businesses are recognizing the value of a mature IT project portfolio management strategy. In support of this growing interest, the marketplace offers a plethora of best practices, articles, and books on IT portfolio management. Much of this writing is geared towards general discussions regarding IT PPM and convincing IT executives of the value of having a PPM strategy in place. However, based on my experience in discussing PPM with my customers, I find that a lot of people do not really understand what PPM is all about. This article provides a high-level overview of IT Portfolio Management and takes a general look at the PPM vendor market. Click http://www.box.net/shared/abpv7nk5tt to download.
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Monday, December 14, 2009

The Future of SOA

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Written by:   Anirban Dutta Topics: Negotiation

There have been many talks over the last few years in tech magazines, the blogosphere, and at IT industry events about SOA and Web 2.0. Although the buzz indicates a growing interest in the technical community, most business executives don't understand how these two modes of information exchange might interoperate and what it means to them in the future. The purpose of this article is to shed light on the relationships between SOA and Web 2.0, and to describe a future Web services delivery model that incorporates IT governance. To read more, click http://www.box.net/shared/q5y74eu4vi to download.
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Monday, December 14, 2009

How Indian Companies can benefit from web 2.0

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Written by:   Anirban Dutta Topics: Negotiation

As web 2.0 is redefining business via Twitter, Facebook and other sites, global sourcing veterans are searching for new ways to redefine sourcing models. This article discusses how outsourcing can be mixed with web 2.0 to deliver optimum outcomes. Click to download.
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Monday, December 14, 2009

How to Fight Against Dirty Negotiation Tactics

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Written by:   Anirban Dutta Topics: Negotiation

Much has been written about negotiation styles. There have been many courses about negotiation, which dedicates entire course work on collaborating and reaching a win-win scenario. In today's 'flat world' business environment, positional bargaining method or fact and reference based negotiation model are standard prescriptions for commercial negotiation. But what do you do, when you sit across the table from somebody whose goal is not to come to a win-win conclusion, but to really beat you down and manipulate you. Well, although it is always a drain to combat dirty negotiation tactics, I have learned that being prepared can help overcome some of that headache. To learn more about fighting dirty negotiation techniques, download the entire article from http://www.box.net/shared/qh402zq80n
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Monday, December 14, 2009

6 Great Tips To Do Business with Americans

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Written by:   Anirban Dutta Topics: Negotiation

As we are heading into a newer age of technology services sale (sort of technology sales 2.0), it is important that we are crisp and focused on getting our message heard by utilizing as little of B&P (bid and pursue) and SG&A budget as possible. In order to do it right, our communication got to be spot on. This article hits the nail on the head on how to cut through the chase by being focused and concise.
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Monday, December 14, 2009

How to Negotiate with Americans

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Written by:   Anirban Dutta Topics: Negotiation

How many times have you felt that you were being pushed around, pointed at and critically judged at a business meeting involving American customers? You wanted to convey your thoughts, explain why it is unrealistic to expect a service request completion by certain date, only to realize that your entire plea to negotiate fell on deaf years. Welcome to the world of cross-cultural negotiation. If this makes you feel any better, your American customers are constantly feeling the same level of desperation on not being able to communicate and come to conclusions while negotiating with you. This article covers some best practices that can help you communicate and collaborate across cultures. Click to read the article.
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Monday, December 14, 2009

The Art of Front End Negotiation

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Written by:   Anirban Dutta Topics: Negotiation

Front End negotiation is sales negotiation. This is where most of us spend a lot of time to move the large technology deal forward. Our chances of successfully convincing our customers to think of us as allies or trusted partners may improve if we provide crisp factual information, use right people to move the deal forward, do not hold on to our position and get into an ego battle with our customer while trying to convince them about our capabilities. We need to also clarify our questions and understand situations as much as possible through using proper clarification techniques without guessing. This article covers practical viewpoints from a practitioner. To view the complete article, please click www.box.net/shared/a5dlvuo7gc
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