This entry was inspired by Scott Francis’ recent blog – The Offshore BPM Experiment is Over; which presented an image of the offshore BPM market which I, for one, did not recognise. The blog focused on large system integrators (SI’s) and their supposed lack of success with BPM deployments.
A number of things struck me. One was that it seemed to present the use of both offshore and strong local teams as incompatible, when in my experience many successful engagements leverage both. In Capgemini, we refer to Rightshore – which is the most suitable combination of “shores” (be it onshore, nearshore and/or offshore) based on the unique needs of the engagement and client. This means that we do many engagements using purely local teams, and in other cases, using lean onshore in conjunction with nearshore/offshore teams. In case of blended models, one of the key things is that all teams should understand the model and how to make it work successfully; it does require all teams to spend more effort on additional activities like regular calls, and increased documentation to overcome communication gaps which may arise. BPM failures where seen, have been because of customer issues, misaligned expectations, and other issues not because of the presence of an offshore team! In fact, my team and I were recently involved in rescuing a BPM project which was being delivered by a purely local team, and this was not the first instance of the same.
There were also insinuations about the number of skilled BPM professionals at offshore being “1/100th to 1/1000th”of the actual numbers. I have worked for two large BPM players, and have not seen anything along these lines. There is a great deal of time spent on maintaining accurate counts of trained and certified resources, across the globe, and that includes India. One point I would concede is that the numbers for BPM skills in SIs, may seem inflated, is because the numbers may not purely be restricted to technology skills, but also includes BPM related non-technical skills such as BPM business analysts/process architects, change management professionals, BPM project managers, and BPM testers. Despite this, the numbers of pure BPM technology professionals at the leading SI’s are impressive.
I would also agree that one of the major problems that continues to plague BPM is the shortage of highly experienced BPM technology skills, at all locations, since BPM is a relatively new technology. One reason why BPM delivery continues to flourish in India is that it harbours the largest pool of resources in leading BPM tools like Pega, Oracle and IBM. So whilst the blog suggest that the primary (maybe sole) reason that clients look to offshore is the cost factor, the reality is that the required skill sets are not available in the numbers required locally, which is why offshore is brought-in to deliver the required skills to the extent possible. At a more generic level, the US specifically is suffering from an overall shortage in IT skills, which some reports have taken to calling another critical cliff facing enterprises, with the only options being to “grow here more, import more or outsource”
In my experience time-to-market is a critical factor for clients as highlighted in the blog, that but cost-to-market is also a key consideration. Offshoring can help on both counts:
- Time-to-market: Having a strong local team and at offshore with experienced BPM professionals, will help in reducing time-to-market for customers, by being able to support multiple initiatives, having the requisite skills, and using the time-difference in many cases to enable around the clock development.
- Cost-to-market: We have developed multiple models, which take into account the productivity loss of a resource being based at offshore due to the communication and time gap, as well as in some cases, lack of familiarity of local laws and regulations. For a standard 10 member team, we estimate a minimum of 31% cost savings for a blended team as opposed to a full-local team
The biggest argument against the idea that BPM offshoring is failing is visiting one of the recognized BPM players in India, and seeing their facilities. Meeting the skilled, enthusiastic, experienced teams supporting large-scale and critical engagements, and exploring some of the innovations they have made would dispel any ideas that offshore teams cannot deliver value on par with local teams. They can also point to the client recognition of their efforts, which have seen the value they have delivered.
BPM continues to grow, and in many cases, offshore is required along with strong local teams to deliver the full potential of BPM to clients – to point to one partnership which did not work (TCS-Lombardi is the example in the blog) is to ignore the many successful ones.