Shashank Sathe – Group CTO – Bajaj Capital Limited India

Industry

FinTech

Current project

Multiple projects – may be generalized as Digital & Tech Transformation across the group

Most proud achievement

Adoption of OpenSource technologies for dev / engineering &
operational workforce; adoption of pure serverless stack for engineering
/ production systems, etc.

Dream project

The existing one, that needs transforming a 50+ yr old legacy setup

Team size

sub~30

Total IT / Technology budget (people + Infra + outsourcing + Services)

Inr. 10Cr

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

Bajaj had adopted an 80:20 approach for Outsourcing : Incourcing
process till April 2017. Things have reversed thereafter and now we are
80 percent insourced. All this has happened without the post of a Chief
Insourcing Officer. So, I can safely say that the requirement is more of
creating a culture of insourcing and taking ownership of our
operations.

What according to you defines insourcing in your industry?

Core competence of the organization, its intellectual property, its
cash flow controlling individuals & processes and its operational
processes must be insourced – these, to my mind are imperatives of
running a business efficiently.
Having these skills within, empowers the organization to take the right
decisions – whether they be soft of stern – without having to worry much
about the cascading negative effects, it any, of such decisions. This
is what insourcing is all about.

Why is it gaining momentum in your industry?

The sheer amount of freedom that insourcing offers to the management
& the organization, is quiet unparalleled. In an outsourced /
consulting model, everything has its commercial ramifications.
Insourcing of key areas [especially Tech & Finance] allows the
organization to be agile, dynamic & yet keep a grip on its finances /
spends so R&D or experimentation with multiple projects +
individuals, is far more efficient & has tangible, visible &
immediate outcome.

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

The technology shift itself is magnanimous. Earlier, everything used
to run on legacy stack – monolithic architecture & a waterfall based
workflow. Times have changed dramatically & go-to-market is
computed in hours instead of weeks now. In these times, having a micro
service oriented architecture, being able to plug-&-play to any
disparate systems, ability to have blitzkrieg iterative developments
& releases & optimizing the overall productivity & workflow
of the tech & product has become a contingency matter. This is
dramatically different from the pre-outsourcing era, as time-to-market
has become the single most expensive commodity today.

What services lend themselves best to outsourcing in your industry?

Anything that doesn’t require frequent changes, or any processes that
are mundane & have their existence within the four boundaries of
logic & mechanical tasks, can be outsourced. Activities like
Customer Service, MIS, BI / Analytics, DataLake, Security Management,
Facilities Management, Server / Infra Management, etc. are some of the
perfect fits for outsourcing models.

How difficult or easy was insourcing transition for you?

It was / continues to be extremely challenging. We had to overhaul
not only some of our manpower, we had to absolutely overhaul out
technology / knowledge management processes. The staff that was stuck in
the era bygone, had to be groomed & elevated to the latest &
greatest in cutting-edge stack. It had its own collaterals as well –
some people raised to the occasion & started delivering good results
while others, had to be realigned in other verticals within the
organization.

What percentage of IT is currently insourced and how do you see it stabilising in two years’ time?

The entire software & product engineering is insourced as of now.
Going by the current ratio we are in 80:20 ratio of insourcing v/s
outsourcing. In next 2 years, this ratio will change to more like 90:10.
There are certain services that we will not insource ; since we believe
those are best managed by an external entity. Barring these, everything
else will be done inhouse.

What are the key considerations for successful insourcing?

Simply put, in case, any part of an information / process / code /
data; if ever falling in the wrong hands, is going to be catastrophical
for the organization, just insource it!

Who are the key support partners for successful insourcing?

The senior management of the organization is the single most
important driving force for the insourcing model. Insourcing does come
at a fixed monthly cost – manpower, infra, logistics, etc.; but even
then, it far outweighs its benefits when compared to an outsourced more
IMHO. Once the SMT is aligned to this vision, all other things are but
mere paraphernalia. We usually have a very close relation with on-ground
staffers @ most Tier 1 & Tier 2 talent acquisition companies. We
also actively look out for talent on Linkedin, Angelist & other
platforms.

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

One can easily present factual & data-driven reference material,
to build logical business cases on the benefits which the insourcing
models can provide.
Agility to take fast tech / business decisions, overall lesser
commercial damage, visibility on clear defined & consistent spend
month-on-month, R&D & innovations to the next level, ability to
work on multiple projects & technologies, are just some of the
benefits of insourcing.

What are the key considerations for budgeting insourcing transition costs?

When an organization is transitioning from a hybrid model to an
insourcing model, one needs to acknowledge that there will be teams
& systems running in parallel for a certain period. There will be an
overlap of certain functions & processes. That is perfectly okay.
The cost one is incurring during this phase will be reduced dramatically
post the transition is complete & in the long-run, insourcing will
prove its own utility from day-one of its adoption. Knowledge Transfer,
Documentation, formal team hand-holding, scrums & sprints based
defined deliverables / measurable goals / activities, a lot of
discipline & intent to adopt the insourcing model are some of the
focus areas that will make the transition seamless & the life
post-transition, much more bearable.

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

Always hire staff that has the correct attitude; so that aptitude
then becomes a secondary element. A willing mind can be trained to do
anything. Knowledge management is yet another integral part of the Tech
teams. Continuous brushing & honing of the skills, adoption of
sustainable, free-for-life technology & craving to innovate in the
cutting-edge space, will not only help deliver what the organization
demands, but will also keep the staff happy & motivated.

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

There are no hard & fast tools to measure the success of the
insourcing model since every project demands a varied contribution from
the teams working on it. However one can be prudent in answering these
self-realization queries viz. [a] Are we flexible enough? [b] Are we
commercially sustainable, spending within the budget & getting more
bang for the buck from insourced teams? [c] are we talented &
capable enough to adopt what’s ahead of the tech curve? [d] Do we have
accurate benchmarking / monitoring of performance in place? [e] Are we
doing enough activities already for future development, change requests,
knowledge management, documentation, project handover, team shifting
& realignment, etc?

How has insourcing evolved in the last 5 years?

About a decade ago, companies were spending big time on large to
mega-size products vis. SAP, BaaN, Salesforce, etc. Those were truly the
days of these goliaths ruling the market & thereby demanding an
equivalent supply of skilled manpower that would be working on these
technologies. Understand that ownership & maintenance of these
products was equally agonizing & cryptic. Over last 2 years, thanks
to OpenStacks, Mobility computing, MentalUI/UX, Cognitive compute, etc.,
everybody wants to be frugal on tech investments. Add to this the
evolving technologies like Blockchain, IoT, AI/ML, etc. that are a
paradigm shift from what computing was just 6 yrs ago. Naturally, all
these cutting edge technologies can run just as flawlessly on server
less compute – so you pay only for what service you use & nothing
more.
All of this decentralization of programming & hosting technologies
has made insourcing the king, since one can have the freedom of working
from anywhere while actively collaborating to an ongoing project.
Individual productivity & daily delivery can be easily quantified
& thus, the need for having to commute to work daily, is on a sharp
decline. More & more people are focusing on individual productivity,
thereby resulting in a cultural shift of how professionals work.

What is the Insourcing Multiplier support that is essential for success?

Insourcing multipler offers invaluable resources, case-studies &
whitepapers on the global insourcing ecosystem. Not only does it cover
technology insourcing in developed countries, but it also gives an
insider view on how insourcing has been impacting small & large
organizations even in tier 2 / 3 nations, to bring in the change for
good. This then, is a great resource, not only for reference material,
but also serves as a good source of inspiration for many.

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