We Have a Problem Heuston Case Study

Tom is running a product concept and design company. He outsources activities to Suhas in India.

Below in an analysis of the relationships, problems and possible resolutions:

Class discussion on Knowledge Management Systems

Knowledge and Expertise Management

Kelly, S. & Jones, M. (2001) Groupware and the Social Infrastructure of Communication: Communication technologies can supplement, but never supplant the value of social bonds and trusting relationships. Communications of the ACM. 44(12) 77-79.

This reading was based on BlueCorp, a large consulting firm. It outlines the difference between success and failure in terms of groupware adaptation within the different offices.

The problem was not the production of knowledge, it was that this knowledge was not being captured in the best possible way.

The Washington case was an exemplar of success. The head of this practice was a great leader in terms of reassuring, addressing fears, and sharing information. He recognized the importance of social interaction, trust, and power outside of the software. He cultivated the social environment to facilitate new forms of cooperative interaction among the staff.

One key passage highlights how important face-to-face interaction is as one employee explains how he wouldn't put everything into the repository, but just enough so that it would make people come to him for his services. This helps build rapport and respect based on their personal interactions.

Rottman, J. (2008) Successful knowledge transfer within offshore supplier networks: a case study exploring social capital in strategic alliances. Journal of Information Technology, 23, 31–43.

This article explores social capital, which is the idea that knowledge and resources are exchanged, work gets done, and value is created through social relationships.

Dimensions of social capital analysed:

1. Structural 
2. Cognitive
3. Relational

Network types:

1. Intracorporate networks - a group of organizations operating under a unified corporate identity, with the headquarters of the network having controlling ownership interest in its subsidiaries.
2. Industrial districts - independent firms sharing similar goals and geographic areas who utilize similar producers, pull from the same labor pool and target similar markets.
3. Strategic alliances - formed by firms located in different positions or in the same position in the value chain.

The article outlines the efforts of the Software Center of Excellence (SCE) within a US manufacturing firm and its interactions with its network suppliers.

The company outsourced key work to multiple suppliers. Issues of Intellectual knowledge are addressed by drawing boundaries. This is done by breaking up suppliers so that each one has knowledge only on one particular part of the business operations. There are no boundaries in terms of knowledge sharing, they instead are investing in engagement by outsourcing to so many and building specialist knowledge.

There are added transaction costs and management overheads associated with this sort of outsourcing model, but it creates a community of knowledge that goes beyond the boundaries of the firm. So much so that the firm was unaware of the implicit tacit knowledge that had built up over time with their suppliers. This was actually a big reason for the initial failure. This issue was addressed by investing in social capital e.g. visiting its supplier sites. 

Emotional Labour & Quality Processes

Nath 2011. Aesthetic and emotional labour through stigma: national identity management and racial abuse in offshored Indian call centres. Work Employment Society. 25(4) 709–725 

The paper investigates a number of agents experiences of national identity management which includes the following:

• Accent training and modification - to avoid racial abuse, invasive questions, keep call time to minimum, facilitate understanding
• Pseudonyms and location masking
• Racial abuse
• Coping with stigma - Internalize, masked resistance, correction attempts, indifference, diversion, distancing

Some of the issues related to emotional labour that came up in the class discussion included:

• Cultural
• Stigma - MTI
• Workload
• Real problems (depression, alcoholism) 
• Control
• Responsibility 

Keeni, G. (2000) The Evolution of Quality Processes at TATA Consultancy Services. IEEE Software, 17, 79-88.

TATA is the largest software and management consultancy in southern Asia. This article focuses on the measure undertaken to ensure quality. These includes:

• Quality Assurance Groups (QAGs) - late 80's
• Quality Management System (QMS) - early 90's
• ISO 9000 - early 90's
• Institutionalization of audits & project management reviews
• Activity-based costing (cost drivers - value-adding effort vs non-value-adding effort)
• The Integrated Project Management System - Introduced automation of data collection & analysis to encourage employees to document and accept metrics (provided additional training/workshops/meetings to convince them)
• Software Capability Maturity Model (CMM) - Pilots at US West & HP centers resulted in knowledge sharing, mentors & Process primes, and process automation. Key to deployment was staff involvement & TCS Certified Quality Analyst Initiative. 
• The Tata Business Excellence Model

 The results & benefits witnessed include an increase in the following:

• Effort estimation - slippage & rework reductions
• Review effectiveness - increase in early error detection  
• Product Quality 
• Customer benefits - reduced project management effort
• Benefits to the organization - support groups, competitive environment

The article doesn't mention the problems/motivators behind installing these quality processes. It was necessary to go outside of the reading to see what the problems were that encouraged them to implement quality controls. Its clearly evident that TATA is a company that's always stumbling. 

The article itself is just a narrative; there is no written evidence of  the real connections with employees or how the work is done. The article focuses instead on the systems, describing them in a way that is too packaged and polished.

This makes the article impossible to understand or use. How could this narrative be used to add to/help my management processes? The answer is it couldn't.

The Twelve Supplier Capabilities

Feeny, Lacity, and Wilcocks (2005) have identified 12 key supplier capabilities that clients should take into account when looking for a vendor.

1. Leadership - as found by Feeny et al. the main differentiating factor between success and failure was the individual leading the supplier teams. Failures resulted from firstly focusing too much on business issues. Second, from bad relations between leaders of the suppliers and either/or/both the clients teams and and the top management for the suppliers organization.
2. Business management - Suppliers should avoid situations where they are being exploited by their clients or dependent on one client. They become too closely tied together as the worse your clients business gets, the worse your business gets.
3. Domain expertise - The ability to retain and apply professional knowledge; this can be done by moving procurement people to a clients site to acquire new knowledge.
4. Behavior management - The ability to motivate and inspire people to deliver services of high value. Once again this can be done by transferring employees onto client sites to go through a "harmonization" process
5. Sourcing - The ability to access necessary resources, for example by generating economies of scale, using superior infrastructure, or enhancing procurement practices.
6. Process improvement - The capability to change processes in a way that generates a dramatic improvement. Methods include using supplier track records, six sigma methodologies, or other quality control measure such as CMM.
7. Technology exploitation - This is considered one of the key capabilities for BPO.
8. Program management - Ability to manage, prioritize, coordinate, and mobilize at both the individual project level and for a set of inter-related projects. 
9. Customer development - As a supplier you want an educated customer, so that they can make informed decisions. This can be done through consistent personal contact and cooperation.
10. Planning and contracting - Being capable of planning resources in a way that creates a "win-win" situation for both the supplier and customer.
11. Organizational design - The capability required to design and implement successful organisation arrangements. According to Feeny et al. (2005) it takes approximately 2 years to reach an organizational fit between client and supplier.
12. Governance - Key issues include ensuring that contracts are in place and that decision making is visible and accountable.

The 12 capabilities can be categorized into three key competencies:

1. Delivery competency - The suppliers ability to respond to the customer's ongoing needs.
2. Transformation competency - The suppliers ability to deliver radically improved service in terms of quality and cost.
3. Relationship competency - The suppliers willingness and ability to align its business model to the values, goal, and needs of the customer.

Symantec Case Study & A.T Kearney's Global Index

Symantec aspires to go global.

Problems

1. Financials

• Not growing fast enough

2. Localizing versions

• Translating and enabling systems, guides - radical rewrites & design?
• Packaging (manufacturing)
• Testing on computers and operating systems in the different areas

Choices

1. Outsource
2. Manage in-house
3. Leave it to re-sellers & distributors to create localized versions and handle the manufacturing for each national market (done so currently in Japan, but means most of the sales rev is going to Japanese re-sellers, deals with non US manufacturers bundling versions could also bring in more money and reach new
customers)
4. Single division responsible for all language & manufacturing or should it be farmed out to each national office - problem with multiple divisions - quality control, marketing, message management e.g. product name translated differently in each country

Solution - have a European headquarter, but where?
1. Ireland
2. Israel
3. India

As a group in class we began to brainstorm on the different dimensions that may effect our chosen country.

Country	Ireland	India	Israel
Dimension
Digital
Proximity to market
Multi Lingual
Infrastructure
Education/skills
Stability (Political)
Corruption
Work Ethic
Time zone
Distance (FTS)
Legal/regulation
Cost ( HR etc)	3K	250	?
Culture
Past History
Reputation
Macro Econ (local)
Climate
Labour Market	10K Graduates per yr	500K	10K

In the end 18 people voted for India, 11 for Ireland (including myself), and 0 for Israel. Ireland seemed like a logical  choice mainly because of its location. This would mean cutting down on transport costs, avoiding currency exchanges, and benefiting from being apart of the EU, e.g. in terms of free movement of goods and labour, favorable laws and regulations etc.

From researching Symantec's current situation with outsourcing it seems they choose Ireland as their outsourcing location. Today it remains the main manufacturing headquarters in Europe, but they have chosen to set up other functions such as R&D and customer support across a variety of countries throughout the EU and and Southeast Asia. This has allowed the company to mix and match the different benefits available to them across a range of countries.

A.T Kearney's Global Index was a good starting point in helping us determine dimensions for the Symantec case, but we also identified some downsides of the consultant companies research paper. These are highlighted in the table below.

Good	Use it? Trust? Reference?	Bad
Factual	Useful at a city level	Out dated
Article generates o/o		Model transparency
Good Methodology

Skype with Suhas Pathak of Unnat-e SysTech Pvt Ltd & his outsourcing experience

Suhas Pathak is co-founder and director at Unnat-e SysTech Pvt Ltd. This is a small Indian company that has a radical outsourcing model. They specialize in engineering work such as heavy duty software engineering which includes embedding and coding pieces of software for other companies. He graciously took the time to share his knowledge and experience of outsourcing with the class. 

He talked to us about the biggest negatives and advantages of outsourcing for his business. The negatives and difficulties involved loss of control, communication, and training. One of the greatest benefits was the cost savings involved. 

His business model works as follows:

1. Work with outsourcing company

2. Understand the company & local resources

3. Identify opportunities (conducting basic screening)

4. Once accepted they sign agreements

5. Mentoring and coaching is provided for cultural issues (acts like local guardian)

6. Provides hardware and software updates

7. Takes care of payments and taxes

The following table highlights his firms business model movement from an In-sourcing company to a Virtual firm organisation.

In-sourcing               à      Outsourcing           à          Partnership           à   V – firm org. (Virtual)
Skill ramp-up		Employee motivation	Managing time
Seniority		Human management (local guardian)	Use overlaps
Long-term partnership		Experts at o/o	Local benefits to lifestyle
Flexible capacity		How to establish credibility – personal contacts, reputation, word-of-mouth	½ hr synch-scrum meeting
Client visit 3 – 4 months, needed for mingle, social, team relations		Not a freelance – Groups benefit, legal, tax, skill knowledge, process/practice, relationship management	Don’t mix work-home (has to be watch closely when working at home) Boundaries are important – or else the benefits are gone
			Remember social life
			Autonomy (for senior people 8+ yrs)
			No physical location – fully virtual model

Case Study Analysis: A Global Operating Model that Exploits Cloud Computing Services for Global Pharma

We were split into groups to discuss the use of cloud for the different services provided by Pharma. The  table below is a result of the class discussion on the decisions made.

Services	General Business (any business)	Unit Specific (specific functions e.g. finance, marketing)	Industry specialized	Cloud	In-House	On-Shore	Off-Shore	3rd Party
Storage	yes			Hybrid		yes	?	yes
Email	yes			yes	no	n/a	n/a	yes
CRM		yes	yes	Hybrid		?	?	Partial
CMS (Content Management System e.g. wordpress, blogger) current data, linked with storage, communication, Intranet, extranet	yes			Hybrid		Policy dependent		Partial
ERP/MRP	yes		yes	Private	yes	yes	no	no
HRM			yes	yes	yes	yes	no
LIMS – Laboratory Information management system		yes		yes	yes	n/a	n/a
3PL 3rd Party Logistics