Amitabh Ray – Managing Director – Ericsson Global Services – India

Industry

Telecom / ICT

Current project

To manage the global service delivery for Ericsson across India, China, Mexico & Romania.

Most proud achievement

There are several, ranging from creating the SAP practice in PwC
India, to setting up IBM’s global delivery from India and creating an
ICT competency for Ericsson.

Are organizations missing a trick by not creating a “Chief Insourcing Officer” post?

I believe, It is basically a question of defining a strategy of
keeping your core operations in-house and freeing up resources by
outsourcing non-core tasks. Setting up captive centres in countries like
India is an insourcing strategy which has been done by many MNCs across
the world. It provides the advantage of talent availability, deep
experience in managing off shore projects and of course the benefit of
cost arbitrage while keeping the operations in-house.
Similarly,
there are other centres like we have in Mexico, China and Romania which
gives us local advantage like language, proximity to the market, time
zone advantage, and allows us to serve customers in those geographic
areas while keeping operations completely under control.

What according to you defines Insourcing in your industry?

As I said in my earlier response, for our industry it means setting
up of captive development & delivery centres across the world to
where our customers are and where we can find the best talent in the
industry. These captive centers are considered in-house as they come
directly under our supervisions and we make sure that the quality of
services is upheld as per our company standards.

Why is it gaining momentum in your industry?

There is an increased trend in setting up captive units in offshore
locations. It is primarily driven by the need to keep control over the
work being done, IP protection, and having same processes across the
world. It is easy to manage a captive unit which has the same culture
and ways of working as the location in which it is established.

How is it better than the earlier pre-outsourcing situation?

Outsourcing and captive or insourcing have always co-existed and will
continue to be so. Early pre-outsourcing had its own agendas and
operations, we are now concerned with the insourcing paradigms and we
strive to find the best out of this.

What services lend themselves best to outsourcing in your industry?

Telecom outsourcing includes call centre outsourcing, finance and
accounting outsourcing, billing operations outsourcing and
infrastructure maintenance outsourcing and others. Managed services is a
big chunk of telecom outsourcing business which can be further
classified into network operations, network maintenance, network
planning, design & Optimization and others. Additionally,
professional services outsourcing would include application development,
software testing & quality assurance and others.

How difficult or easy was Insourcing transition for you?

Not too difficult as we had done it previously in our earlier
organizations. We had to focus on a domain and create solutions which
are the key differentiator and a reason behind the success of the
strategy.

Who are the key support partners for successful Insourcing?

I believe that, Business, IT, HR, Finance, everyone will have to be
on the same page to make it happen. A culture and common mind set for
the insourcing transition and its adoption as fundamental needs to take
place.

How can a CIO create a solid business case for Insourcing?

The CIO essentially needs to show how insourcing can help the
organization deliver far greater satisfaction to its customers. It is
more than just financial gain or keeping control over the work. There
must be a clear case of business benefit for the end customer that the
insourcing organization serves and further extends its support to enable
the organization.

What are the key consideration is budgeting Insourcing transition costs?

There will be some amount of business disruption when work previously
outsourced is moved back to a captive centre. It could involve hiring
some of the critical resources from the outsourced organization. So,
recruitment and training costs would be very important. There could be
additional investment in IT infrastructure, security and more to ensure
that the transition is smooth and the operations run better or at par
with the outsourcing model.

How can one ensure that the in-house IT will be able to support future requirements and innovations?

That has to be part of the plan when setting up the captive unit. One
will need to create facilities that can be scaled up or down to keep
pace with the business. The pace of technology change needs to be kept
on context with the IT team in a scalable manner so that the IT team is
able to grow with the growth of the technology and essentially lead to
and contribute to the innovation and future requirements of the
organization.

What are a few of the key tools or resources you use to monitor the overall health of your Insourcing?

One key metrics of measurement is financial benefits and customer
satisfaction.
However, there are other areas which are also important from a KPI
perspective like utilisation of resources, competitive cost structure,
employee satisfaction, etc. Of course, above all is the quality of
delivery. As we are moving towards greater automation and use of new
technologies like analytics, the measures of success are changing.
Everything is centred around end-customer satisfaction.

How has Insourcing evolved in the last 5 years?

According to some published reports Global In-house Center, or GIC,
landscape has evolved significantly over the last 20 years. There are
about 110 GICs in India, employing more than 800,000 individuals and
generating approximately $23 billion in revenue, according to Bain &
Company. Mirroring the growing maturity of the IT-BPM industry, GICs
today have moved past the “cost centre” stage and are now increasingly
focusing on high value activities such as IP-creation, building
competencies around emerging technologies, setting up COEs and taking
full ownership of vendor management.

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