GT_September_2012

TRENDS AND OPPORTUNITIES IN LATIN AMERICA

THE NEARSHORE ADVANTAGE

MANAGING SUPPLIER RISK

page 32

page 44

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DON’T GET CAUGHT OFF GUARD

GlobalizationToday Bringing Markets Together

September 2012

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Latin America: A Market Onto Itself Our in-depth look at Latin America Trends and Emerging Opportunities

Also in this issue: Golf as a Vehicle to Build Business

Bring Your Own Device

Effective IT Governance

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by Thom Mead

by Alex Wood

by Dennis Conley

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Cloud Computing, Green IT, Mobile Computing and Management Skills in IT are among the latest collections from our series of ebook-only publications.

INSIDE September 2012

5 PUBLISHER’S NOTE 6 NEWS FEED

12

TRENDS AND OPPORTUNITIES IN LATIN AMERICA

ATUL VASHISTHA AND ALAN HANSON OF NEO GROUP LOOK INTO TRENDS, TRAPS AND EMERGING OPPORTUNITIES IN LATIN AMERICA.

What’s new and noteworthy in global commerce.

26 BUSINESS GOLF

PAR FOR THE COURSE

Thom Mead explains how to use golf as a great vehicle for forging relationships, building rapport and doing deals.

by Thom Mead

36 BYOD (BRING YOUR OWN DEVICE) The pros and cons of BYOD for end users and businesses.

by Alex Wood, Marketing, Point to Point

44 MANAGING SUPPLIER RISK

Ajay Bolina of Deloitte explains why organizations should pay attention to Supplier Risk Management and how to be more effective than your competitors.

by Ajay Bolina

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THE NEARSHORE ADVANTAGE

EFFECTIVE IT GOVERNANCE

LATIN AMERICA’S EMERSION AS A VIABLE AND ATTRACTIVE ALTERNATIVE TO “OFFSHORE”.

WAYS TO STRENGTHEN CIO’S POSITION AND AUTHORITY IN THE COMPANY.

by Esteban Reyes, VSI Nearshore Outsourcing

by Dennis Conley, Transition Partners

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3

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The way to achieve that goal is of course a difficult one. There is not a right or wrong answer or a magic method as, just like with globalization itself, the rules around us are constantly changing.

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NEWS FEED

NEWS Feed

WHAT YOU NEED TO KNOW IN THE WORLD OF OUTSOURCING

SERCO RENEWS BPO DEAL WITH THE AUSTRALIAN TAXATION OFFICE www.newstatesman.com

Serco Group has renewed its business process outsourcing (BPO) contract with the Australian Taxation Office (ATO) to provide contact centre services. Serco Group has renewed its business process outsourcing (BPO) contract with the Australian Taxation Office (ATO) to provide contact centre services. The five-year contract is worth approximately A$140m (around £90m), with two one-year extension options.

Under the contract, Serco, in partnership with the ATO and other suppliers, will provide advice and responses to inquiries relating to tax numbers, refunds, business activity statements, debt management, return submissions and tax information packs. Serco has been providing these services for the ATO from its contact centers in Victoria, Queensland and Tasmania since 2008. On 6

GlobalizationToday September 2012

average, the centers handle more than a quarter of a million customer engagements each month. Christopher Hyman, chief executive of Serco Group, said, “I am delighted that the ATO has selected Serco to continue providing these important contact services for Australian taxpayers, businesses and tax professionals. We are committed to continue

providing high quality, efficient customer-focused services and to exploring new ways of engaging with the people using them. This announcement is further recognition of the growing reputation of Serco’s global BPO capabilities, providing support to customers in both the private and public and sectors and across a diverse range of sectors.

NEWS FEED

TELEFONICA BETS BIG ON LATAM STARTUPS WITH NEW VC FUND NETWORK’ www.nearshoreamericas.com

Spanish telecom giant Telefonica is setting up a network of venture capital funds to support technology start-ups in several Latin American countries.

The telecom operator said it has agreed to make an initial investment of EUR68 million ($85.4 million) into the funds, financing projects across the region. The program will, however, starts with a committed capital of approximately €300 million that will allow managing business projects with an aggregated estimated value of €1 billion. The fund will be launched initially in Chile, Brazil, Colombia, where it has received funding from governments and institutions.

The VC fund, dubbed Amérigo, is open to other investors and industrial partners that want to participate in the acceleration and financing of high potential technology companies in the region. Telefonica has even promised to allow venture capital investors to determine which start-ups represent the best investment opportunity.

That means it will contact venture capital fund managers in the region to see who will take interest in investing.

Interesting part of the matter is the VC fund has the

support of governments, public financial institutions, and other private partners. In Spain, the fund has already invested in five ‘undisclosed’ technology companies. Funding for Private Equity (PE) and VC deals in Latin America has more than doubled from 2009 to 2010, whopping $8.1 billion. As for the first half of 2011, LAVCA (Latin American Venture Capital Association) reports nearly $7.5 billion in fundraising and investments—impressive performance by any measure.

Nonetheless, VC represents only a tiny portion of the PE/ VC category in Latin America.

“The objective of this initiative is to lay the foundations to create a global network of innovation that drives businesses and new digital services around the world, particularly in areas such as Latin America that are not currently a focus for venture capital,” Telephonica stated in a press release. The aim of Amérigo is to become a key source of financing for technology entrepreneurs globally, particularly ‘outside of the main centers of VC activity, such as Silicon Valley and London.’ “The Amérigo program starts its activity with a capital of about €300 million, provided by its promoting entities –

in particular Telefónica has undertaken initially investments of €68 million for the next five years- and the funds subscribed to the program. This initial capital will allow managing business projects with an aggregated estimated value of €1 billion,” the statement noted.

Within the Amérigo network, the best technology fund managers are being selected who are also specialized in the ICT sector. These managers and the technology funds designated to coordinate the financial resources in each market will identify and promote high potential companies, with an initial investment of approximately one million Euros depending on the size of level of development of the project.

“Amérigo marks the next stage in this strategy as we seek to combine the funding power of private and public funds to create a real engine for stimulating technology innovation’ said Matthew Key, Chairman & CEO, Telefónica Digital. Amérigo joins Telefónica’s other initiatives such as Wayra, which is already accelerating over 145 startups in its 12 Academies, and Telefónica’s direct investment program, Telefónica Ventures.

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NEWS FEED

ACCENTURE QUALIFIES FOR $750M IT SERVICES FOR U.S. DEPARTMENT OF STATE www.sourcingfocus.com

The U.S. Department of State has selected Accenture Federal Services as one of nine prime contractors to provide technical support and consulting services under a $750 million Development, Modernization, Enhancement (DME) contracting vehicle. The DME has a one-year base, with four, one-year options.

The State Department’s DME is an indefinitedelivery, indefinite-quantity (IDIQ) contract vehicle that supports the Bureau of Consular Affairs’ modernization strategy to develop, enhance and maintain the technology tools for the bureau’s major business processes: issuing visas and passports and managing the Office of Overseas Citizens Services, which assists Americans with lost passports and provides other, similar services.

DME allows the Bureau of Consular Affairs to purchase software engineering development and modernization, technical and operations support services, and analytical and research support. “The State Department is taking action to strengthen national security through modern technology, tools and systems. This program will improve delivery of services to American citizens living or traveling abroad and will support efficient and secure issuance of passports and visas,” said Amy Tener, who leads Accenture’s work with the U.S. Department of State. Accenture recently was awarded contracts by the State Department to analyze the department’s supply chain and enhance the Integrated Logistics Management System (ILMS) that provides materials and services to its global workforce. The ILMS program recently was recognized as an industry best practice. The American Council for Technology and Industry Advisory Council (ACT-IAC) honored the State Department and ILMS earlier this year with two Excellence.gov 8

GlobalizationToday September 2012

awards, recognizing exceptional government programs and projects that use information technology in an innovative ways to improve services to citizens, enhance government operations and provide a more open and transparent government.

NEWS FEED

AMAZON ANNOUNCES 100 NEW IT JOBS www.sourcingfocus.com

At the opening of Amazon’s Digital Media Development Centre in London, the company announced that 100 new technology positions would be created from the development. Boris Johnson, Mayor of London, said of the new center and job creation, “Boosting London’s tech and media workforce is key to driving the capital’s economy and helping to create jobs and growth.” The digital center will develop multiple digital projects including services for a range of devices including mobiles, PC’s, TV’s and consoles.

PLANS FOR A MERGER BETWEEN BAE AND EADS HAVE RAISED CONCERNS OF JOB CUTS www.sourcingfocus.com

The announcement of a £29.8 billion merger between BAE and EADS has raised concerns regarding potential job cuts.

Both trade unions and business analysts have raised concerns that a merger between defence giant BAE Systems and Aerobus manufacturer EADS, could result in job cuts. Britain’s largest union, Unite, have already said that it will seek a urgent meeting with business secretary Vince Cable, in order to prevent job cuts. Mike Clancy, the

general secretary designate of Prospect said: “Whether the news of this merger brings reassurance or not for the

workers depends on whatever plans for consolidation or growth the merged company will provide. www.globalizationtoday.com

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LATIN AMERICA

Latin America: Trends, Traps and Emerging Opportunities

by Atul Vashistha and Alan Hanson

F

or many out there, outsourcing seems to be defined largely by the above – people working for low compensation in locations such as India helping the client save significant monies. That is outsourcing to them.

However, the recent downturn and current client experience has upset many notions and models that have been in place for over a decade. What was considered to be the norm where outsourcing is concerned, is now in flux and so requires different responses. As global sourcing continues to grow, so does the interest in new locations.

Companies are interested in new locations to not only diversify risk, but also to better serve their own diverse operations or distinct needs.

ONE OF THE FASTEST RISING DESTINATIONS IS LATIN AMERICA. TRENDS

Trends: Location Take for instance, the call center business. There was a time when India, and then later The Philippines, were the only markets given due consideration for setting up offshore call center operations. That notion has been dispelled by the rise of markets such as Colombia, Panama and Costa Rica for the provision of voice-based 12

GlobalizationToday September 2012

customer support services is concerned.

In similar manner, we see the rise of attractive alternate IT and engineering services delivery destinations, with local players such as Brazil, Mexico and Argentina, increasingly emerging as viable providers of these complex services.

The above examples are just some of the many shifts and changes we are likely to continue to witness. In particular, they point

LATIN AMERICA

towards an endeavor to be on the lookout for markets with newer skill sets, and not just go by established norms. In the same breath, it is vital that markets with access to equal or better technology processes are also identified. The situation is akin to the age old maxim wherein stock diversification is key to a healthy nest egg; depending on just one or more markets for all of one’s outsourcing needs is really not a very

good idea. Increased attrition and competition for resources point to the need for geographic diversification.

Besides skill sets and technology, there are other reasons for which alternate markets should be actively considered. The attribute of time zone is good example. Many Latin American locations share the same time zones (within 3-4 hours) with each other and as well www.globalizationtoday.com

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LATIN AMERICA

as the US. Another shared attribute is language.

If we are to look at the large Spanish speaking population of the region and consider the equally large Hispanic population of the US, there are compelling opportunities to serve the higher cost markets with lower-cost, Spanishfluent resources. We see the following clusters developing in Latin America: Brazil: The domestic market is strong and local players are focused on serving Brazilian companies and the Brazil operations of multinationals. A few suppliers like Ci&T and Stefanini are bucking that norm and expanding rapidly into global markets. Other good firms like BRQ, Tivit and TCI continue to be largely focused domestically.

Leaders: The other locations that have 14

GlobalizationToday September 2012

significant maturity are Mexico, Chile, Costa Rica and Argentina. In these locations, one finds multiple multi-national captive centers and pan-regional suppliers of scale. Firms from Mexico such as Softtek and Neoris, Globant from Argentina and Sinapsis from Chile have become regional leaders and are also tapping into the global market.

Rising: The key rising locations are Colombia, Peru and Uruguay. While Uruguay has seen traction with IT, Colombia and Peru still need to show scale capabilities that are ready beyond call centers. TCS leverages Uruguay very effectively for its clients while Carvajal leverages its Colombia workforce to provide major BPO services to the government. But, most of the suppliers here are one-country focused and

LATIN AMERICA you outsource not (only) because another entity can do the job in question at a lower cost, but increasingly because of the opportunity to do the same work with more efficiency.

Again historically outsourcing is something “western” businesses resorted to, usually to low cost and/or efficient destinations in the east. This is no longer true in its entirety. Take the case of Bancolombia, one of Colombia’s major banks. TCS and Infosys are assisting Bancolombia in helping transform its technology and infrastructure. Thus, as would clearly be apparent, outsourcing today can work across any geography and can be undertaken in virtually any direction – west to east or vice versa, as long as the primary goal of business value addition is achieved. So, we are seeing a trend of sourcing in the LatAm region not just by multi-nationals but also by governments and large local and regional companies.

susceptible to regional and global competition.

Central America: The key locations in this cluster are Costa Rica, Panama and Guatemala.

Honduras, Nicaragua and El Salvador are slowly working on capitalizing on this opportunity too now. But, other than Costa Rica, which is a leading South American location for multifunction captive centers, such as for Experian, Invisalign, HP and Western Union, the rest are only prepared for and capitalizing upon call center competencies.

Trends: Regional sourcing We are starting to see an interest in regional sourcing rather than an Asian centric approach.

Multi-nationals and Pan-South American firms are looking to combine back office and other functions regionally rather than having them run in each country of operation. This will lead to consolidation of multi-country and multi-function operations and I expect Mexico, Colombia, Costa Rica, Chile and Brazil to be leading candidates. Regional conglomerates such as Carvajal, Avianca, Suramericana, Comcel and Multi-Nationals such as SAP and Henkel are looking to consolidate LatAm back office operations into fewer locations.

Trends: Sourcing Enabling Global Transformation Historically, outsourcing was commonly pursued as a cost cutting exercise. The keywords now are in fact, transformation and time to market –

Trends: Outcome driven pricing and relationships Further, irrespective of whether there is outsourcing or insourcing, we are likely to witness an evolution in the way relationships www.globalizationtoday.com

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LATIN AMERICA

between clients and vendors are established, and subsequently defined. In the past, the focal point had generally been the resources that the vendor had at its disposal. Such a perspective is likely to change in favor of the Service Level Agreements (SLAs) being the new focal point.

This will allow the whole service process and the service commitment being made by the vendor to be clearly stated to clients. Once established, it would be the responsibility of the vendor to make sure that the SLA is adhered to and fulfilled to the maxim; the client in such a case need not be very concerned about the number or quality of resources at the disposal of the vendor. In effect, the provider, in exchange for operational and human resource flexibility, assumes significant operational and financial risk. Thus, the shift of focus to the SLA signifies a much needed correction in perspectives. It also implies that niche outsourcing centers which could possibly do better quality work than their bigger counterparts now stand as much (or maybe even better) chances of winning quality assignments.

Pricing, one of the most important aspects of outsourcing, is also likely to witness a major change in the way it is determined. From broadlevel volume-based, or even hourly-based pricing mechanisms, there is likely to be a shift in favor of transaction based and outcome/gainshare pricing. Clients would like to assess the benefits of each outsourcing mandate, in terms of the number and quality of transactions it has been able to fulfill and eventually, how those transactions have resulted in actually adding value to their business.

partner in Latin America, we often see a lack of attention to the retained resources. These are the company resources that now are either serving a supervisory role or an expert role. Often, the new outsourcing arrangement requires them to perform tasks and have responsibility that they are not familiar with. For example, a lead engineer, now may have to manage a team that is offshore and culturally very different. There are additional issues related to time zones, distances and contracts.

Great companies invest in relooking at skill sets required and invest in re-skilling the retained organization. They also create new Trap: Not investing in the “Retained processes and new organizational structures Organization�

As companies outsource and significant parts to better integrate the partners and thus yield of its functional organizations move to a better outcomes. So, investing in program such 16

GlobalizationToday September 2012

LATIN AMERICA • Growth rates for the IT services industry indicate that 750,000 additional professionals will be needed in the country in the next 10 years (300,000 for the export market) • Projections indicate that the number of college graduates in IT-related careers will reach approximately 48,000 in 2010 and 53,000 in 2013.Additionally, graduates from other areas, especially business areas, will also pursue careers in IT. Some of the new professionals will replace retiring professionals among the 600,000 in the IT labor pool (1.7 million, considering call centers). This scenario indicates a progressive shortage of IT professionals. As a result, enterprises in the IT industry undertake the responsibility of preparing the workforce, usually in partnership with local governments in second-tier cities.

as SEI-CMM, Six Sigma and eSCM should be a priority in the region.

These additional skills in process improvement, managing multi-country and multi-function operations are not easily available in South America and can cause quality issues and will also be a detriment to faster growth.

Trap: Lack of attention to Risk Management Further, if we continue to think of the low cost nature of outsourcing, we find that a lot of the assumed low cost destinations are no more as low in their costs as was presumed to be.

Again, take the case of Brazil. With a booming economy and jobs not too difficult to come by, salaries in the country have been continuously witnessing an upward spiral.

• More than 60% of IT service companies’ labor pools are located in seven major cities — Sao Paulo, Rio de Janeiro, Curitiba, Belo Horizonte, Porto Alegre, Recife and the capital Brasilia. The biggest labor pool in the country is located in Sao Paulo, with a size of 225,000. However, the scarcity of resources is already becoming an issue, and companies are rapidly and successfully reaching out to Tier 2 cities with good universities (for example, Campinas, Hortolandia, Sao Carlos, Uberlandia, Londrina, Maringa, Florianopolis and many more) Firms looking to outsource their business functionalities to leading and rising destinations like Brazil or Mexico need to be wary of such macroeconomic conditions. Else they stand to risk losing value rather than actually gaining, from the entire exercise.

Thus, as would be amply clear, risk management www.globalizationtoday.com

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LATIN AMERICA

and risk mitigation would definitely begin to play an even greater role as increased amount of operations are outsourced. Any destination, which is being looked at as a prospect for outsourcing, would be assessed at multiple levels. Broadly, these levels could be summed up as Country-level risks, City-level risks, and Provider-level risks. Within these risk levels would be a broad range of sub-levels at which risks would in turn be further assessed. Financial risk would of course be common to each of the above three risk levels. Further, at the country and city levels, aspects such as human resource risks, infrastructure risks as well as geopolitical risks would become paramount and would be thoroughly scrutinized and assessed before any definitive outsourcing mandate is finalized and also for ongoing monitoring. In the same breath, if we are to narrow down to the risks at the provider level, we could be looking at risks such as strategy risks, service capability risks as well as risks arising out of the complex client and service mix that the provider holds.

Opportunity: Creation of clusters A key success of locations has been tied to investment promotion activity and government support or lack of interference. In Latin America, we see organizations like CINDE in Costa Rica, MexicoIT in Mexico, Corfo in Chile and ANDI in Colombia lead the way in enabling buyers and suppliers to effectively promote and deliver on promises. Longterm success will come from development of outsourcing eco-systems such as those created in Bangalore where other professional services such as recruiting, legal, tax, training and transportation are easily available. In addition, local industries have supplemented this by providing vertical expertise.

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GlobalizationToday September 2012

Opportunity: Knowledge Management Across all outsourcing initiatives, knowledge management will always play a vital role. The ‘drill down’ approach of the past, where the clients retained the brains and the vendors merely acted as pawns in their hands – swaying to their tunes in whatever direction they were asked to, be very likely to be passé. Instead, the emphasis will be on collaboration and mutual value addition.

A term which is likely to witness increasingly higher usage would be ‘collective intelligence’, whereby clients and vendors come together to apply their minds and thoughts in a collaborative manner towards the mutual goal of addressing their respective business needs. Innovation would very likely play a bigger role than has been witnessed so far; everyday processes which have often been established as the ‘norm’ for doing things – just because they have always been done that way – perhaps from the very beginning, will start getting questioned more and more, with the client and provider working together to leverage its respective experiences and knowledge to find better solutions. Additionally as Latin American firms take on global markets and/or global clients, they will desire and expect their suppliers to help them support that expansion.

This support hinges on codifying and sharing the knowledge gained from prior experiences.

Future Opportunities We see Latin America being a hotbed of activity in both Information Technology and Business Processes with high double-digit growth for the foreseeable future. While call centers dominate, there will be increased attention to leveraging regional players for IT resources. This should greatly benefit many of the regional leaders such as Softtek, Stefanini, Globant, Sinapsis, Neoris, Ci&T and even Indra from Spain. It is important

LATIN AMERICA

to note that the demand will be driven by four sets of buyers: Large national firms, Regional conglomerates, Latin American operations of Multi-Nationals and US firms. The group that has the highest profitability and is the hardest to serve is the Multi-Nationals and US firms. This group expects quality and process expertise that is lacking in most suppliers in the region. Some of the key players that will also benefit from this market are firms such as Accenture, IBM, TCS, Infosys, Genpact, Cognizant and Wipro.

From a country perspective, the governments and investment promotion agencies need to establish a differentiation strategy and invest in preparing the workforce. Of course, in many locations the workforce is prepared for working in call centers, but is greatly lacking in skills to effectively work in IT and BPO operations. Also, in many of these locations too many efforts are

being spent in internal competition such as competing chamber of commerce or multiple trade associations. Brand building will require a shared vision and greater collaboration. Also, this brand building needs to focused both internally and externally. Internally focused to attract right talent to the outsourcing profession and externally to differentiate the talent and offerings.

Thus in summation, we can conclude that outsourcing and Latin America as a destination is likely to witness a series of changes – in the way it is perceived as well as practiced. Eventually, these changes may well be our guiding light and only hope for better business practices, as outsourcing matures and the world globalizes even more to and in Latin America.

Atul Vashistha

Chairman of Neo Group Inc.

Alan Hanson Senior Vice President of Neo Group

Atul Vashistha is the Chairman of Neo Group Inc., a leading Global Advisory and Supply Analytics firm, which also provides Global Supply Risk Monitoring as a service for dynamically monitoring, managing and predicting country, city and supplier risks.

Atul is a recognized leader in the global services industry with numerous industry recognitions, such as ‘Top 25 Most Influential Consultants’, ‘Nearshore Power 50’, ‘HRO Superstar’, ‘FAO Superstar and Global Sourcing Leader’. You can get in touch with him on – atul@neogroup.com.

Please visit www.GlobalSupplyRiskMonitor.com for more details on GSRMSM.

Alan Hanson is a Senior Vice President of Neo Group where he has responsibility for the continued development of its Global Supply Risk Management (GSRM) analytics services, which helps clients dynamically monitor and manage their global operations for value.

Prior to joining Neo Group, he was in senior leadership positions at CSC and Genpact. He was also a former partner at TPI, where he cofounded the firm’s Global Financial Services practice. Earlier in his career, he spent nearly 14 years in Financial Services and Corporate Business Development roles. He can be reached at alan@neogroup.com.

About the Authors

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COLOMBIA

Colombia has become a leader in BPO and IT in Latin America An attractive local market, the availability of a skilled workforce, a strategic location for providing services to the United States and Europe, a supply of added value, in addition to the National Government’s willingness to promote this industry, make Colombia a competitive landscape for this sector

ADVERTORIAL

Colombia’s positive economic performance in the last decade, its unique geographical location and its emerging nation status is getting the attention of today’s major players in the global BPO & IT sector. The country is emerging as a benchmark market for the industry, an important label for its ability to create new jobs and attract foreign investment.

Some of the most renowned international consultants highlight the advantages that Colombia has in this industry. For example, Wipro Consulting Research describes it as a new offshore option in the region and ranks it above Brazil and Argentina in terms of costs and human resources. Meanwhile, for Tholons, Colombia 20

GlobalizationToday September 2012

represents “the hidden star of outsourcing in Latin America” , which for the second consecutive year, was included in the ranking of the 30 worldleaders in offshore services.

“In BPO and IT, Colombia is a rising star in Latin America. (...) The country is undergoing a major transformation. People are starting to see the opportunities it offers: they see a strong emerging market, with political and economic stability and a skilled workforce,” said the editorial director of Nearshore Americas, Kirk Laughlin, at the most recent sector’s summit in Cartagena.

Colombia has become a benchmark for the arrival of foreign capital in Latin America. Last

COLOMBIA

year, Foreign Direct Investment (FDI) reached a record of U.S.$ 13,234 million, exceeding the target of U.S.$ 13,000 million proposed by the National Government for 2014. According to the Ministry of Industry and Trade, so far in 2012, the cash flowis U.S.$ 10,504 million, and it is estimated to reach U.S.$ 15,000 million at the end of the year.

The IT and BPO sector has grown significantly in recent years. According to the Colombian Call Center and BPO Association, the revenue received by the call center industry doubled in the past four years. In 2011, it generated U.S.$786 million, while in 2008 the revenues were U.S.$478 million. As for exports, the industry grew by 125

percent in the last five years, from $37 million in 2006 to U.S. $141 million in 2011.

This growth has had a significant impact on the creation of jobs in Colombia. According to the IT and BPO Association, its member companies created 82,000 jobs in 2011, much more than in 2006, when 32,000 jobs were created.

Colombia, a country with outsourcing advantages This positive performance was attributed to various factors which are characterized by their value added and which give Colombia an advantage over other countries in Latin America. www.globalizationtoday.com

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COLOMBIA

ADVERTORIAL

Market size is certainly one of them. Colombia has a population of 46 million, with major development centers with more than 500,000 inhabitants in cities like Bogota, Medellin, Cali, Bucaramanga, Pereira, Manizales, Armenia and Barranquilla, where large companies in the sector are established, such as Genpact, Hewlett Packard, Indra, Telemark, Sutherland, Convergys, among others.

In addition, there are various sectors in Colombia that demand outsourcing services for onshore, nearshore and offshore, not only for foreign companies, but also for national companies requiring these services.

These sectors are mainly telecommunications, banking and financial services, health services, public administration and manufacturing, among others. While the voice segment leads activities in the sector (inbound and outbound), more value-added activities and backoffice operations are starting to be developed.

Also, the quality of human resources is a feature of the country which stands out. In fact, in 2011, it had the second fastest growing labor force in Latin America after Brazil, according to IMD World Competitiveness ranking.

It is also one of the main Latin American countries with the most labor flexibility and, after Mexico, it has the largest supply of graduates in careers related to BPO and IT degrees such as systems engineering, computing, manufacturing and construction, with 195,244 graduates, according to Euromonitor International.

For Maria Claudia Lacouture, president of Proexport Colombia, a big advantage for the country is its location. “This allows it to become an export platform to the United States and countries of Latin America and Europe, many with free trade treaties or trade agreements with Colombia, a heavily weighted feature which is deterministic for decisions of major companies 22

GlobalizationToday September 2012

in the sector.”

“Exporting services from Colombia is part of our expansion strategy and this has a lot to do with the labor force and competitive costs offered by the country. There can be even more growth if we establish service centers both for infrastructure and for applications for other countries in the region. That’s why we decided to establish our company here,” said Peter Kroll, senior vice president of the French IT Services multinational Capgemini.

Colombia is in the middle of five time zones and shares the same time zone with important business centers like New York, Miami (USA) and Toronto (Canada). It has about 700 direct international flights weekly and is less than six hours away from the main capitals of Latin America.

“I was surprised by the IT and BPO sector

COLOMBIA

The Colombian government is wagering on the BPO industry

in Colombia as it is today compared with a few years ago. There has been a 180 degree change: it has been modernized and has built very good infrastructure. We see the potential of Colombia through the significant growth in call centers, which are now more advanced than international market trends, and that tells me that this is the place to be,� said Frank Schaffer, head of Inbound service for U.S. and England of British Telecom, established in Colombia with a data center and IT services projects.

Another advantage offered by the industry is the quality of the language. Colombia is the second largest Spanish-speaking country after Mexico and, according Nearshore Americas, it is the most neutral Spanish accent spoken country, making a difference for companies in choosing Colombia as a destination of their projects where voice services in Spanish and English are offered.

Given the potential for development of the Colombian outsourcing industry, the National Government has declared software, IT and BPO services as world class sectors due to their potential to create jobs, innovation and exports. It is one of the industries that make up the Productive Transformation Program (PTP), program created to promote their development.

To do this, the Government has created various programs that stimulate improvement in the quality of human resources to meet the growing demands and expectations of employers.

Thus, the Productive Transformation Program has created initiatives to promote efficiency in handling languages like English. Through the Ispeak program, the Ministry of Trade, Industry and Tourism of Colombia certifies different levels of language skills for individuals interested in working in the BPO sector. So far, 26,000 professionals and technicians have been certified for this purpose.

Similarly, the Finishing Schools project, promoted by the Government and the InterAmerican Development Bank (IDB), seeks to promote the development of offshore services in Colombia with the aim of strengthening Colombian human capital in this segment.

Colombia, a jewel for foreign investment

In the current outlook for global FDI, companies are adjusting their activities to the new economic reality and, in that regard, are seeking to invest their capital in countries with a good environment for doing business, with economic growth, and political and fiscal security.

Within this scenario, Colombia has become an attractive and strategic country for foreign www.globalizationtoday.com

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COLOMBIA

ADVERTORIAL

investment in various world class sectors and has value-added offerings for foreign businessmen, among them BPO and IT services.

It is one of the emerging economies with the greatest projected foreign investment in the coming years, according to the Economist Intelligence Unit, in addition to having an investment grade rating from Moody’s, Fitch Ratings and Standard & Poor’s, three of the most renowned rating agencies in the world.

Recently, the Wall Street Journal listed Colombia as one of the new “Latin American Tigers” with potential to defy the global slowdown. The Doing Business 2012 report ranks the country as the third most friendly for doing business in Latin America, the World Bank ranks it as the fifth which most protects investors, and studies from JP Morgan highlight it as one of the most attractive countries for investment in Latin America in the coming years.

Economic growth of 5.9% in 2011 (above Latin 24

GlobalizationToday September 2012

America’s 3.6%), political stability, a high rate of young population, a skilled and competitive workforce, a diversified sectoral offer, tax incentives and free zones which include tax exemptions for a specified period, are other advantages of the country that attract foreign investors to establish operations.

In addition, Colombia has a growing number of trade agreements. According to the Ministry of Trade, Industry and Tourism, Colombia has nine free trade agreements in place with 15 countries, among which are the United States, Canada, Switzerland, Chile and the Northern Triangle, among others.

For 2014, it has set a goal of having 16 treaties in force with over 50 countries, which will allow access to more than 1,500 million consumers.

This increases its attractiveness for foreign entrepreneurs, who see the country as a platform for entering third markets with tariff benefits from our territory.

COLOMBIA

Proexport, the ally for investors

Proexport Colombia is the Colombian Government Entity responsible for promoting exports, investment and tourism to Colombia.

It has a network of 26 offices in countries of America, Europe and Asia, from which it identifies opportunities for Colombian businessmen, as well as foreigners interested in doing business in the country.

In coordination with the eight regional offices, the entity has designed promotional activities, including seminars for foreign and established investors, designing business agendas for their visits to the country and business missions.

The entity also creates specialized agendas for companies interested in the Colombian offer to meet their expansion plans. www.globalizationtoday.com

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BUSINESS GOLF – PAR FOR THE COURSE

BUSINESS GOLF PAR FOR THE COURSE As an avid golfer and former 1.2 handicap in the game, I often get asked questions about business golf. Now I can’t say I speak for everyone here with what will follow, but like everything in life, take what you can use and discard the rest.

by Thom Mead

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robably almost since the beginnings of the game more than a century ago, golf has been a great vehicle for forging relationships, building rapport, assessing your playing companion, and doing deals. Of course, the gate swings both ways on this topic. It can be a great way to kill all of the aforementioned, now and forever, if you don’t understand the concept of business golf is not the same as a round with your regular weekend foursome.

One of the beautiful things about golf is it can be played by anyone. In many parts of the world 26

GlobalizationToday September 2012

it is prohibitively expensive. But as places like China are experiencing a golf building boom, it will eventually a matter of supply and demand and there will be courses available for people of all skills and economic brackets. The equipment can get ridiculously expensive, and for those who are a slave to fashion, the attire can be equally as expensive. But neither is required to play the game well. If pro golfer Adam Scott was given a set of clubs straight out of the box from K-Mart, he likely could still shoot under par. If I used the clubs Adam plays on tour, it likely would not

BUSINESS GOLF – PAR FOR THE COURSE

make me a sub-par golfer. While lessons can be helpful for many, recent Masters champion, Bubba Watson, is the most recent phenom who has achieved success and prominence with a selftaught swing. With a homemade swing myself, I tend to gravitate to the pros who are not the product of countless swing coaches, but more those who typify the “regular guy”. It is one of the beauties of the game, that anyone, from any walk of life, can play the game as a pro or a professional, or just for fun. One of the greatest golfers who ever played the game, Bobby Jones, remained an amateur

his entire life…as he was a practicing lawyer by trade. One does not even need to start on a golf course. Legendary Spaniard, Seve Ballesteros, started playing the game with a homemade club fashioned from a stick he found…or so the story goes. As a youngster, I could not afford to play on the local municipal course…so I practiced on the football field of the elementary school behind my house. When I needed a sand trap, there was the sand below the swing set, used to cushion the fall when a child fell from the swing…that doubled nicely for my purposes. With a little imagination www.globalizationtoday.com

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BUSINESS GOLF – PAR FOR THE COURSE and a lot of desire, the innovative mind can find a way to play most anywhere. Today…I largely practice on the driving range…only stepping foot on a course a few times a year. For the cost of about 2 buckets of balls a week, a few hours on the putting green and a few more hours practicing my short game, I can keep my game going at a respectable level (but admittedly not at a 1 handicap anymore).

A common complaint is golf takes too long. I guess if you are horrible at the game, don’t enjoy it, approach it with disdain and make everyone around you miserable when you play…then the game can never be short enough…for everyone.

Of course if this is how you approach everything in life, you should seek professional help, and I don’t mean a PGA professional. As designed, the standard regulation, golf course, walking, is designed to be completed, by a four people within, 4 hours and 30 minutes. On many occasions, playing golf with my former wife, we have completed 18 holes in a little more than 3 hours… walking and carrying our bags. People in a cart can comfortably play at that pace…but there is no need to rush. It is, after all, a leisure sport. But in a business context, you have a captive audience for the next 3.5 - 5 hours. Also bear in mind, your playing partner is likely observing your behavior more than your sales pitch. What makes for bad business golf is not playing by the rules, being the boat anchor of the group that everyone is waiting for on every shot, cheating, and unnecessary profane outbursts. If your basic skills are not there, take a rain check and practice. While the game allows you to carry 14 clubs in your bag, few people ever use most of them. So get good with a few clubs, be confident with them, and approach the game your way. There is no rule that states every par 4 and par 5 your first shot must be hit with a driver. If you can’t hit your driver well, leave it in the car. The scorecard does not reveal how you got the ball in the hole, only how many 28

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strokes it took for you to do it.

If you hit a massive slice or hook with your driver, or both, and you have little predictability as to where the shot will finish, than practice it on the range, not when playing business golf. If the longest club you can hit with some confidence and predictability is a 6 iron, then use that club to tee off. Leave anything longer in the car to avoid temptation. If we take a standard 420 yard par, most people would go for distance off the tee, often spraying their shot to someplace other than the fairway, then recover and then hit onto the green for their 3rd shot.

But you have a 6 iron that you can hit 140 yards consistently. So use it off the tee…and again in the fairway, and again to the green. You both got to the green in 3 shots. No reason to hang your head in shame. I actually learned this as a child, from the local business woman whose grass I cut each week. I was given the privilege to play a few rounds each year with her. She was the model of consistency at 60 years old.

If you watch the pros play golf, you will see they frequently hit it somewhere other than where they intended. But greats such as Phil Mickelson, Corey Pavin, or Lee Trevino could scramble from these adverse situations to still achieve success. Imagination, determination, and playing within yourself is as essential when structuring a deal as it is when playing golf. Show your client or vendor, you are not conventional, that for you, it is all about results When I was younger, I was on my high school golf team. Our coach was a former Marine Corps artillery officer. He instilled in us the concept of statistical golf (by strange coincidence he taught high school math and statistics too). Each month we had to hit 100 shots with every club in our bag.

We then discarded the 5 longest, 5 shortest, 5 most left and 5 most right. The ensuing “footprint” for each club could then be determined. When approaching a green, hitting over water or a

BUSINESS GOLF – PAR FOR THE COURSE bunker, we knew, statistically, which club to hit to ensure the greatest chance of success. Statistically knew…because it was measured, that the 6 iron, being the club that would get me closest to the pin, also had a high likelihood of going into the lake fronting the green because the pin was cut close to the water’s edge. But with my 5 iron, I knew statistically there was a high percentage chance that I could carry the ball over the water and onto the green. Working within my limits, not trying to work miracles on every shot, my game had become predictable. So predictable that our team was state champions all three years I was on the team. Not because of me ( I was #5 of 6 guys on the team), but because of the methodology. Knowing my abilities and my limits, managing the course as it was presented to me, and playing to win.

It is often said in golf, “Drive for show, putt for dough”. More than a trite saying…again it is statistically true. On a standard 18 hole course there are 14 opportunities to use a driver off the tee (the other 4 holes are par 3). So, under normal circumstances, the driver accounts for at most, 19.5% of the total swing percentage. However, every hole is designed with the expectation of 2 putts per hole. If you achieve this goal, putting accounts for 50% of your total strokes in a normal game if you shoot par. For example, a par 3, you hit one shot to the green, and take 2 putts. A par 4, you hit 2 shots to get to the green, and 2 putts. Even if you are not very good, and you average 4 shots to get to the greens…but still manage to 2 putt…then putting would be 33.33% of your total strokes…50% more than your driver. This also means you have more opportunity for improvement practicing your putting than any other single club. Yet, most amateurs spend most of their time practicing on the driving range, not putting.

I played in the Byron Nelson Pro-Am many years ago and was paired with legendary putter Loren Roberts. A great guy, he didn’t impose himself upon anyone and gave advice only when

asked. One of our playing partners asked him for the one putting tip he would give to amateurs.

His response was roughly as follows…When amateurs and pros miss their intended putt, the vast majority of the time they miss the putt more long or short, not left or right of the hole. So it you have a 15 foot putt and it misses long by 3 feet, you may have only been an inch from the hole when it rolled by the hole. Minimize your mistakes by focusing on the speed to get it to the hole, but do not go more than 6 inches past the hole. In short, SPEED is more important than READ. So next time you practice putting, don’t just endlessly roll balls to a hole. Place a club 6 inches past the hole then hit to the hole without hitting the club you just placed on the ground.

There are hundreds of tips I could provide, but space is limited. At a recent business dinner I was told I should offer a tip each month. One person at the table asked, “When you play with a client, being that you are more skilled than most, do you let the client win a few holes, or even the game?”

I replied, “No…and when you see how bad they play it would be incredulous to them that they could beat me. The very premise of them playing with me was to learn how to play better. I would lose credibility if I let them win. Better to beat them handily and have them invite me back than to have them walk away underwhelmed that I did not live up to my billing. Or equally good, suggest we spend time together on the range afterwards (more client time), or be sure to plan some time on the next visit to practice together as well as play together. In the game of golf, with the USGA Handicap system, it closes the gap between the great golfers and the not so great golfers.

From my experience, I have found, especially in business golf, that people will tolerate bad play to much greater extent than they will tolerate slow play. If I shoot a 78 and you shoot 118, and you don’t slow the pace of play for everyone, we can have a great time together. But if I shoot an 82 www.globalizationtoday.com

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BUSINESS GOLF – PAR FOR THE COURSE

and you shoot a 77, but we are waiting on your every shot, you are never prepared when it is your turn, you don’t observe the rules and etiquette of the game…you likely will not be getting many return invitations.

SOME COMMONSENSE RULES FOR BUSINESS GOLF

You won’t get a second chance to make a first impression - You are using their business time, and time is money. Learn the game, and get moderately proficient (can you score less than 110?). If you are not there yet, stick to the golf outings at conferences.

Spend your money on lessons, not equipment As Lee Trevino once quipped, “It’s not the arrow, it’s the Indian”. Buy a decent set of inexpensive clubs (year end clearance sale, garage sale, used sporting goods store, etc). Set a milestone for yourself…like breaking 100 for 18 holes. When you can do this, then buy new clubs. Until then, the equipment won’t make much difference, especially if you don’t practice enough.

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you can improve. Golf is a game of continuous improvement, with a lifetime to master it.

Be a pleasant person on and off the course Without adding additional stress, recognize that people are observing your behavior on and off the course. Books have been written about what you can learn about a person by how they play golf.

If you can’t control your temper tantrums, foul language, propensity to throw things and other undesirable behaviors, then best to not even start the learning the game.

Manage Your Expectations – Very few people find the game easy. Play within yourself and don’t give in to temptation. If your partner hits a great shot over the water, and you know you can’t hit anything close to it, play it safe. Play the odds. Play statistical golf. Better to be excited in a positive way with your steady, yet unspectacular play than to be excited in a negative way as you find every hazard and lose more balls than there are holes on the course. The USGA handicap system was developed to enable those with a high handicap to compete with those who have a low handicap, male or female, and all can still enjoy playing together. It is the great equalizer. It does not compensate for bad attitudes. So relax, have fun, and play smart golf.

Only Perfect Practice Makes Perfect – Doing the wrong thing repeatedly will only reinforce bad habits. Read about the swing, watch some videos or YouTube, videotape yourself…do something to alter your approach to practice so

When you first start it can be a humbling experience – Seek qualified advice. It can be a few 1-on-1 lessons with the local club professional, it can be a group lesson offered through the YMCA, or you can ask a friend who has the skill and

GlobalizationToday September 2012

BUSINESS GOLF – PAR FOR THE COURSE

embarrassment and inconvenience you cause your playing partners may kill the business benefit you were seeking.

Start Slow – Best to start your business golf experience by playing corporate golf events, conference venues and charity events. This will reduce the expectations on your performance as they are usually only semi-competitive, and you can still learn the game and network in a nonthreatening environment.

Business golf is an extraordinary venue for forging relationships, doing deals, assessing prospective employees, and for just pure fun. If it is not fun, rethink your approach. If you are still not having fun, then put your clubs in the the patience to assist you. But lessons without closet…don’t play for 30 days…then give up the practice is a waste of money. As a general rule, game completely and try something else.

I would not seek golf instruction from a friend if that person seldom scores less than 100 per About the Author round. Learning their mistakes will not make you a better golfer. I learned the game by reading the World Book encyclopedia.

Thom Mead This is a Business Meeting - Be sure you arrive Thom has been a key early enough to practice before you play. I would figure in structuring and suggest allocating no less than one hour before closing more than $17B of your scheduled tee time. I typically allocate outsourcing transactions 2 hours ahead for myself. The more I sweat in in his career. Thom was VP practice, the less likely I will be surprised on the of Marketing, Alliances & course. It is unnerving to see someone arrive Channels – North America with no time to practice, step up to the first tee, for Firstsource, CMO for and proceed to give a glimpse into the horrific EXLservice, SVP - Sales for Spherion, VP of experience that lies ahead for everyone playing.

Sales and Marketing for Unisys Outsourcing and Look the Part – Business golf, like many sports, has certain expectations. Many courses have a minimum dress code that must be adhered to in order to play. You can probably find this out online. While how you dress will have little effect on how well you play, but the subsequent

VP of Global Marketing for ACS where he also served as president for an ACS BPO subsidiary.

Thom can be reached at: 770-769-7795 thom.mead@yahoo.com www.linkedin.com/pub/thom-mead/0/224/a98

www.globalizationtoday.com

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THE NEARSHORE ADVANTAGE

The Nearshore Advantage Latin America has emerged as a viable and attractive alternative to “offshore” outsourcing.

By Esteban Reyes VSI Nearshore Outsourcing

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THE NEARSHORE ADVANTAGE

I

n an increasingly global and technologydriven marketplace, the outsourcing of support services and back-office functions to offshore companies has become an accepted part of doing business in the U.S. The practice of outsourcing has been around for 50 years, started by Ross Perot creating EDS in 1961. With the advent of the new millennium, bringing with it back-to-back recessions, being cost competitive and operating efficiently became crucial to corporate survival and more companies emerged globally to meet the need. Many companies developed a strategy of focusing on core business and critical processes and identifying areas that could be outsourced.

Often, these were functions necessary to run the business, such as accounting, human resources, data processing, etc., but were not specifically related to the company’s core competencies or how they differentiated themselves. This trend continues today as U.S. businesses look to India, China, and, increasingly, Latin America to provide the resources and infrastructure for information technology and business process outsourcing.

Over the last two decades, India has been the clear leader in offshore outsourcing services. The country offers a large, diverse, well-educated, Englishspeaking, low-cost workforce that has successfully met the back-office needs of many well-known organizations, including GE, British Airways, Hewlett-Packard, IBM, American Express, and

Citibank, to name a few. More and more, these companies and others are outsourcing highly interactive functions such as customer support, client contact centers, application development, and software engineering. However, language issues (English speakers from the U.S. often have a hard time understanding Indian-accented Queen’s English), cultural misunderstandings, proximity and time zone challenges, as well as growing concern over data theft, privacy, protectionism and quality in India, China, Russia and other Asian countries has leading companies increasingly seeking other locations, particularly Latin America, as a means to address the risks inherent in the traditional offshore outsourcing model.

As a “nearshore” location for U.S. companies, Latin America ranks third, behind India and China, for IT outsourcing, according to Capgemini’s 2010 Executive Outsourcing Survey. Of the executives responding to the survey, 56 percent of them believe that doing business in Latin America is becoming easier than doing business in other parts of the world. This is good news for companies like VSI, who provides software development and business process outsourcing from world-class nearshore facilities in Barranquilla and Bogota, Colombia.

Very often, the “soft skills” and cultural compatibility abundant in places like Colombia more than compensate for the initial hard dollar savings from Asian-based outsourcing. Citing its importance, Wendell Jones, Chief Executive of The Society for Information Management commented, “Successful offshore outsourcing starts with an understanding of the cultural context and an appreciation for the people involved in both companies. From the cultural and people perspective, outsourcing management involves blending the different cultural values and norms, people, processes and technologies into a cohesive team.”

www.globalizationtoday.com

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THE NEARSHORE ADVANTAGE NEARSHORING IN COLOMBIA: THE STRATEGIC ADVANTAGE Colombia, a tropical and lush country that boasts both beautiful beaches and scenic mountains, has historically been stereotyped as a land of good coffee and illegal drugs. Over the last decade, though, Colombia has transformed itself into one of the best locations to do business in Latin America.

Once perceived as unsafe, it now ranks solidly with the progressive, industrializing countries worldwide that have well-diversified resources and productive capacities. With a population of 45 million, Colombia is the third largest country in Latin America, behind only Brazil and Mexico.

Colombia is a top market for U.S. exports, and the home of significant technological innovations including the artificial heart valve and LASIK eye surgery. In recent years, beginning in Alvaro Uribe’s presidential term and continuing under the current president, Juan Manuel Santos, security has improved and crime rates have fallen dramatically to be in line with many industrialized countries.

At the same time, the perception of Colombia as a viable business location has risen—the country is fast becoming a major success story in both the sphere of Latin American outsourcing, and on the larger global stage.

The technology research firm, Gartner, Inc., ranks Colombia as one of the top locations for offshore services. The Colombian government wants foreign investment and, in conjunction with the private sector, is making significant strides to create an attractive environment for offshore companies. Several programs promote public-private partnerships, and government reforms and initiatives are enabling the country to go head-to-head with other countries looking to service both Spanish- and English-speaking information technology and business process outsourcing markets.

So, what distinguishes the Latin American 34

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and, more specifically, Colombian “nearshore” outsourcing model from the more standard Asian/ Indian “offshore” model? As many technology companies, including VSI, Unisys, SAP, and Telefonica have discovered, it has much more to do with the Total Cost of Ownership than just the basic labor costs. The proximity, infrastructure language compatibility, and cultural affinity of Colombia all play into creating a unique collaborative and creative business environment that is crucial to the success of ITO and high-touch BPO and that is simply not available on a similar scale in the Asian marketplace. In fact, many large Asia-Pacific ITO and BPO outsourcing providers are increasingly seeking to acquire “nearshore” capabilities in order to plug the gaps in their traditional “offshore” model.

Colombia, located near the equator, is in the middle of five time zones and an easy flight from major business centers such as Miami, New York, Los Angeles and Toronto. Business can be conducted in real-time, face-to-face, and during “regular” business hours. By contrast, New Delhi, Beijing, and Manila require 18- to 24-hour transcontinental flights from many U.S. locations and require altering the business day to accommodate U.S. time zones.

With a robust infrastructure and continuing investment around creating large, complex data centers (e.g., Terremark in Bogotá), Colombia is well positioned to offer outsourcing companies resilient, high-availability technical solutions that

THE NEARSHORE ADVANTAGE

enable service delivery. In addition, the omnipresence of companies such as Hewlett-Packard and Dell, as well as a high rate of computer and Internet users provides the resources and intellectual capital needed to outfit and staff robust ITO and BPO operations. According to Internet World Stats, at the end of 2009, nearly 50 percent of the Colombian population regularly accessed the Internet, versus 24 percent of the population across Asia. Also, the Colombian government is highly proactive about IP and data protection and has laws in place to regulate personal data protection in compliance with U.S. and European Community standards.

Colombians speak a “neutral”, easy-tounderstand Spanish, and English is the second most spoken language in the country. Working with the BPO industry, the government has created www.ispeak.com, a national registry for certified speakers of English to make it easier for companies to recruit qualified employees. Also, the city of Bogotá, in partnership with several companies, has created a program to finance Englishlanguage education for call center employees.

Given that the U.S. is home to over 45 million Hispanics, the outsourcing industry is finding that it is imperative to offer bilingual services if it is to remain competitive and attractive to its customers.

Colombia is the second largest Spanish speaking country in the world, behind only Mexico.

Language is only a small part of the cultural

affinity shared between Latin and North American people: similar histories, religious backgrounds and educational expectations help to establish a natural connection in an industry that often requires hightouch and on-the-spot resolution to technology issues that goes beyond the standard call center script. An ethos that emphasizes employment stability, customer service, and creative, innovative approaches translates into an extra level of productivity that cannot be measured by cost alone, but certainly impacts the bottom line.

While focusing only on labor arbitrage, dollarfor-dollar, outsourcing labor costs in Asia/India are less than in Latin America. But when things such as travel, employee attrition, customer retention, real-time communications, and the ability to solve problems faster are considered, the total cost of doing business is lower in Latin America.

About the Author Esteban Reyes VSI Nearshore Outsourcing Esteban is a visionary yet practical entrepreneur who knows how to grow a good idea into a multi-million dollar enterprise quickly.

He’s found his professional passion in building highperformance teams that share a common vision, and then empowering them to live up to their maximum potential with integrity and accountability. He currently serves as Managing Partner & CEO of VSI Nearshore Outsourcing, a company specialized in business process and technology improvement solutions for the mortgage industry and mid-sized companies.

www.globalizationtoday.com

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BYOD

BYOD (BRING YOUR OWN DEVICE)

By Alex Wood The pros and cons for end users and the business

W

ithout a doubt, ‘bring your own device’ (BYOD) is the industry hot topic this summer. IT professionals are wary of it, end users are embracing it and vendors are trying to market it. It’s a subject that’s dividing opinion, with the security implications alone causing IT managers to wake up in a cold sweat. Alex Wood, Marketing Manager at Point to Point, reports on this growing trend. leakage and the risk of malware are the obvious problem areas that spring to mind. Additionally, There is one very obvious and visible benefit although very few people will deliberately steal of the ‘bring your own device’ phenomenon. corporate data, there’s always the risk of leaving Productivity increases. Quite simply, user’s work a tablet, laptop, phone etc in the back of a cab! better and increase productivity while feeling more Importantly there is some great mobile device content with the freedom to use their own devices. management software around that seriously Also, with a greater degree of personal ownership mitigates the risk of data theft. and personal finance involved, employees take the One might think this issue is as simple as deciding time to maintain their beloved gadgets. From a whether to allow BYOD or not, but unfortunately corporate perspective, there’s the clear cost savings it’s not as straightforward as that. Organisations attributed to decreased hardware replacements. need to decide whether to fully embrace the BYOD However, the most positive aspect of BYOD is ethos or restrict it ever so slightly. For example, entirely intangible. Fundamentally, BYOD allows are you going to allow Android devices or just employees to interact directly with IT in a positive Apple? Some organisations suggest that Android’s sense. It reflects a proactive approach from IT open format makes it more susceptible to attacks, departments, working with the end user rather thus rendering the Google owned platform out of than against them. Employees want to use the bounds. most appropriate device to help them do their Equally, where do organisations draw the line job. You’re the marketing manager? OK, use a around the management and maintenance of Macbook. Work in sales? Make the most of your personally owned devices? Parameters need to tablet for taking notes in meetings. be clearly defined. If a device breaks, does IT When you think about the negatives surrounding fix it or is it a case of ‘taking it to PC world’?

BYOD, the issue of security is never far away. Data Similarly if people have their own devices, there 36

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BYOD To achieve this, it’s safe to say that BYOD and mobile device management software need to go hand in hand. MDM needs to be more than a desirable add on, it should be a pre-requisite. Any sane IT professional should have some serious reservations about a company even considering BYOD without any type of mobile management security tool.

When working with clients, vendors and re-sellers need to help manage expectations and formulate a realistic strategy. From the customer’s perspective, it’s crucial to understand whether BYOD is achievable, necessary and scalable. There are risks around BYOD and IT organisations need to help customers weigh up the pros and cons. BYOD is a change in mentality - not just from the user’s perspective, but also to any organisation’s IT hierarchy. seems to be an increased impetus to work outside Ultimately, IT in 2012 is about promoting traditional hours. As a result of this, employees flexibility. It’s hard to argue with the benefits of expect 24/7 support when they can’t log in on a BYOD, especially when it emphatically endorses Sunday afternoon. and encapsulates the notion of flexible working.

In addition, there is reluctance from some employees around mixing ‘business and pleasure’.

About the Author Whilst the majority of workers seem enthusiastic to embrace BYOD, it must be noted that some individuals are happy to just logon to their work Alex Wood device at 9am and log off at 5:30. In this case, it’s Point to Point crucial for organisations to consider who should Alex Wood is responsible be included in any BYOD pilot. You wouldn’t for marketing at Point to necessarily want task workers in a call centre Point and has been with working off iPad’s, but you may want your prethe company for two sales team to have that degree of flexibility. years. Over the last twelve One thing becomes increasingly clear when you months, Alex has also been ponder the implications of BYOD. Having some managing Point to Point’s type of strategy, even if it’s relatively vague, is customer events which aim essential. Otherwise you’re going to start running to offer an interactive and varied approach to into all sorts of issues. Slightly worryingly, IT seminars and workshops. He is a graduate recent research is suggesting that two thirds of from the Henley Business School at Reading organisations don’t have any BYOD strategy in University with a BA Hons in Management and place. Guidelines and expectations need to be set, Business Administration. as well as a degree of accountability. www.globalizationtoday.com

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LATIN AMERICA

Creating an Effective IT Governance Structure Ways to strengthen Chief Information Officer’s position and authority in the company.

by Dennis Conley

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nformation Technology (IT) Governance is a process that ensures that senior management takes responsibility for – and has authority over – IT and how it serves and adds value to the entire enterprise. Governance ensures that IT’s accountability, measurability, predictability and cost effectiveness are directly tied to the company’s overall business needs.

Understand the Current IT Framework To create an IT Governance structure, first understand the existing IT environment.

Some Governance aspects may already be well established, leaving other areas, such as requirements, in need of development. A brief, yet focused, assessment of the following will establish most of the requirements for such a structure: 38

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• Organization: What is the IT organization?

To whom does it report? What are the IT functions and responsibilities? What are the organization’s skill and competence levels??

How does the work of the function appear to occur? Assessing the organization takes more than just obtaining a current org chart; it requires a complete understanding of how the function operates, as well as a similar understanding of the non-IT organization.

Who are the major users? How do they interact? How do they interface with IT? • Current Practices: You need to understand current practices for a wide-range of issues, such as access and security administration, backup and recovery, e-mail and Internet access control, service levels standards and their reporting, escalating severe problems,

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change control, problem tracking, and the like. Are these practices documented?

Is there evidence they are followed? Are they measurable? Are they repeatable?

• IT Strategy: Is there a formal strategy?

What does the strategy say about linking IT’s priorities to those of the enterprise?

Is there a business plan that establishes business direction and priorities?

• Application Portfolio: What is the nature of the applications being processed? Are they packages supported by vendors – or internally developed and maintained systems? How are they interfaced? What database technology is employed? How old are the systems?

How current is the underlying technology?

• Backlog: Is the backlog measured? Are requests logged and documented? Is there a prioritization process? How is progress measured and reported?

Establish a Framework for IT Governance: After understanding the current environment, sufficient knowledge exists to develop a framework: • Senior Governing Body: The Senior Governing Body is arguably the most important, as it establishes whether or not senior management will take responsibility for the enterprise’s IT direction. A Steering Committee ensures a firm link between the business direction of the business units and the IT strategies

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to support them. The Steering Committee consists of business unit heads, and is chaired by one of the business unit heads. The Chief Information Officer serves as the Secretary of the Steering Committee. They meet monthly with a specific agenda. (Preparation materials are provided to members a full week beforehand.) The business units set the priorities; status is given directly to the revenue producers; and input on IT practices and services is aired and discussed.

• Working Group: It may be useful to establish a weekly group consisting of the business unit’s Chief Technology Officers– including Operations and Administration – chaired by the CIO, and intended to review priorities and progress in a much more detailed way. Here, the business unit’s specific Service Requests are considered, priorities within each unit 40

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and between units are developed, and common problems and issues are discussed.

• Decision Packages: The IT Governance Structure recommends a hurdle level of expenditures, below which the Working Group can approve a project without the involvement of the senior Steering Committee. Above that level of expenditure – which will be different for every enterprise – the project sponsor must obtain the approval of both groups. To provide the information necessary to make intelligent decisions, a Decision Package is completed with the pertinent data: Project Description, Sponsor, Stakeholders, Benefits, Financial Picture, Alternatives and Recommendation.

Decision Package forms should be no more than four pages and often take only three to four hours to complete;

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significant, unbudgeted projects. Later, when confidence is gained, fewer requests will be forwarded to the Working Group, and then for information only. The object is to not overload the committees. If and when that happens, senior management begins to lose interest – defeating the entire Governance Process.

but the information contained therein constitutes the business case for the project.

• Resources / Costs: One of the Governing Body’s most important considerations is the IT function resource level and its resulting costs. Some CIOs argue that their budget should be a negotiation between them and their supervisor, with only passing attention given to the business unit heads. This almost always results in unnecessary conflict in the long run. The Governance Process itself is based on the theory that there should be a business rationale for every dollar spent by the IT function. Supporting the business units is IT’s only reason for existence. Active participation by the business unit heads in determining resource levels and costs of the IT function is appropriate and necessary.

• Segmentation: The Decision Package element allows for the segmentation of necessary projects into at least two key categories: • Authorization Levels: Finally, the initial Service Request and Decision Package should those that can be approved by the Working pass through several levels of authorization – Group and those requiring further approval not to impede the process, but to ensure the of the Steering Committee. Some companies buy-in of the business side of the enterprise. distinguish between “budgeted” and “unbudgeted,” with different breakpoints for Develop the Service Request and Reporting each. For example, if the project is “budgeted,” Process: anything under $50,000 can be handled at the Working Group level. However, if it • IT Governance Steering Committee and Working Group: Charters should be is “unbudgeted,” the breakpoint might be developed for each of these groups – outlining $25,000. Thresholds for approval will vary by membership, responsibilities, meeting company and phase. In the early days of an IT schedules, reports and materials required for functional turnaround, every project might consideration, and the degree of segmentation warrant discussion by the Working Group of requests that will require approval. at least, and the Steering Committee for www.globalizationtoday.com

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• Service Request Process: Fundamental to the Governance process is that all requests for changes in IT services – times, applications, projects, service levels, etc. – are documented in an IT Service Request, even those internal to the IT function. The request clearly shows the originator, stakeholders, specific request described in some detail, approvals, date / time required, account code for charging, etc. Requests are logged in by the IT function when received; logged out to the appropriate IT managers for estimating; logged back in and back to the originator for approval. Every member of the Working Group should receive a current list of Service Requests several days before the meeting date, so they can review and update priorities, place some requests on hold or drop them altogether. The team can then work with a current list of requests.

time equivalents (FTEs) can be scheduled for Service Request Project. “Firefighting,” maintenance, training, etc., might reduce that to 4 FTEs. Careful time reporting can also identify areas of time “leakage”; e.g., is too much time being spent in “firefighting”?

(Perhaps an internal Service Request should be developed to fix one or more of the problems that cause significant “firefighting.”)

• Tracking: All aspects of the Service Request and Reporting Process require a reliable infrastructure of tracking and reporting.

Service Levels should be carefully logged in at every step of their process. Performance reporting against service level standards should be systematically tracked and reported to allow the Steering Committee and Working Group to measure how effectively and efficiently the IT function is providing its services. A narrative discussion of trends, deviations from standard and planned actions steps should accompany the reporting.

• Performance Reporting: The IT function is very much like a producing plant – it has the same objectives of cost, customer service and productivity, and should report on its progress in achieving previously established objectives. Budget Develop the Implementation Strategy: adherence is always important, but uptime, reliability, recovery, response time and • Education: The first and most important schedule adherence all also key IT metrics. step in IT Governance implementation is to get the business unit head’s full backing and • Time Reporting: At the same time, IT personnel participation. It is not uncommon for them should be reporting their time against such to want to delegate their oversight to their categories as specific projects, fire-fighting, Chief Technology Officers, hoping to avoid maintenance, vacation, administrative tasks “another meeting.” Effective Governance and training. The value of time reporting is requires their active participation. Realistically, to inform the Working Group and Steering IT is becoming more and more important to Committee of the “real” time available for companies. Taking responsibility for IT, and projects. Eight professionals in Network how it addresses the needs of the business unit, Operations does not mean that eight fullmust be the business head’s job. Business units 42

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CTOs can provide significant technical insight and direction, but should not take responsibility for oversight from a business perspective.

• Roles and Responsibilities: Governance groups’ charters should be specific in their roles and responsibilities, and should mesh with the CIO and the business unit CTOs functional responsibilities.

Charters should be followed by policies and procedures that institutionalize the Service Requests, Decision Packages, Segmentation categories, Service Levels Standards, Performance Tracking and Reporting.

• Training: As the charters and policies and procedures are developed, training should be conducted to ensure a full degree of understanding and compliance. Roles and responsibilities of the Steering Committee and the Working Group – if there is one –should be well understood, not only by the members, but the user community at large. Training on procedural issues, as how and when to complete a Systems Request and a Decision Package (if needed), will enable a smooth flow of requests and packages that contain sufficient data to enable informed decisions.

• Backlog Evaluation: As reporting is implemented, the amount of time available to work on Service Requests becomes apparent.

As known requirements are documented in Service Request format, estimated and prioritized, a clear understanding of the real backlog of work is developed. The enterprise can then deal effectively with its options – add to staff, reduce non-productive time, stretch out the delivery of the backlog, etc.

About the Author Dennis Conley Transition Partners Dennis Conley is a managing partner with Transition Partners, a management consultancy headquartered in Reston, Virginia. He is a senior business and information technology executive and transformation leader with over 20 years of broad corporate and consulting experience. His extensive background and experience covers such areas as mergers and acquisitions, outsourcing, business development, technology management, organization development, business and strategic planning, and leadership training. Recently, he has been providing strategic advice for multiple merger and acquisition activities. He has directed over 20 business process and information technology sourcing transactions valued at over $5 billion. www.globalizationtoday.com

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The New Reality for Managing Supplier Risk: It’s Harder Than You Think

by Ajay Bolina 1. What does Supplier Risk Management mean for organizations?

Supplier Risk Management (SRM) is a discipline of risk management that attempts to proactively identify, mitigate and manage risks and disruptions in the supply chain. While SRM is an evolving discipline in multiple industries, it is predominately adopted by the financial services industry where firms are heavily dependent on third-party providers to manage business operations. Outsourcing, globalization, and lean supply chain initiatives among other factors have contributed to a highly fragmented operating model limiting the level of control that firms have on their supply chain. Regulatory bodies such as 44

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the OCC (Office of the Comptroller of the Currency) and FFIEC (Federal Financial Institutions Examination Council) have increased SRM audit rigor and have heightened compliance requirements to determine that firms effectively track, measure, manage and report supplier risks which they are exposed to (see Figure 3) and implement appropriate risk mitigations strategies. This article provides insights into the growing need for broad SRM strategies and approaches, specific dimensions of SRM, leading industry practices that may be leveraged and actionable recommendations on enhancing organization’s SRM capabilities.

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2. Why should organizations pay attention to Supplier Risk Management?

Recent events in the financial markets have indicated the increasing significance and importance for organizations to establish rigorous SRM controls. In the last few years, we have seen:

a range of external providers, and in several instances multi-sourcing for a single product

• ­ An increase in the level of outsourcing and offshoring, a trend that shows no signs of tapering

• ­ An increase in the adoption of virtual service delivery models enabled by telecom technologies, leading to the growth in new service delivery locations, e.g. China, Brazil, and Egypt amongst others, each with their own social, economic, demographic and political risks

• ­ An increasingly complex global sourcing landscape, with organizations reliant on a mix of internal captive or shared service centers and

• ­Growth in number of new suppliers, some playing in niche technology areas, with a limited track record of performance www.globalizationtoday.com

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These events have further enforced the demand for organizations to adopt a broad SRM program, with effective governance controls, supplier metrics, mitigation strategies, risk management processes and reporting.

for services. Historically, many organizations have used spend as the single dimension to tier suppliers; however, more recently, in addition to spend, organizations have adopted a multidimensional approach to tiering suppliers, including evaluating risk profile characteristics, e.g., is the supplier handling confidential data that is exported outside country borders, is the supplier providing an outsourcing or offshoring service?

Figure 1: SRM Interactions with internal and external functions Global and Regional Regulatory Agencies

3. Why have some organizations been more effective than others?

Realize importance of SRM across the sourcing lifecycle and the need for risk-based supplier classification: In many organizations we have also seen SRM as a critical component of the sourcing management life cycle where a key function is to execute appropriate risk based due diligence prior to executing contracts 46

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Business Continuity & Disaster Recovery Fraud Protection

Supplier Governance and Risk Management

Operations Risk Management

Strategic Sourcing Risk Management

Compliance

SRM should not be considered a stand-alone, isolated function within the organization, but as an integral part of the organization’s operations tasked with managing complex relationships with multiple internal and external stakeholders (see Figure 1). Global and regional regulatory bodies impose stringent compliance requirements at financial services institutions with the primary aim to safeguard end users and their information.

The role and responsibilities of SRM are further defined and influenced by the requirements instigated by internal functions such as fraud protection, business continuity and disaster recovery, internal audit, information security, and data privacy management. To adhere to and manage the requirements of internal and external groups, the SRM function in leading organizations typically works hand in hand with multiple stakeholders.

Technology Risk Management

Internal Audit

Data Privacy Management

Legal

• ­ Early adopters of global delivery model monetizing or divesting assets such as internal or captive service centers and moving to an operating model where critical services are now provided by a third party

Manage data security and privacy better: At major financial services institutions, operations and technology risk management are often the cornerstone functions that own, direct, and coordinate SRM activities. Functional SRM roles are thus closely linked to requirements set forth by data privacy and information security groups aimed at preventing unauthorized access or storage or distribution of personally identifiable information “PII” and other confidential information. To address these requirements, the SRM function is often called upon to actively participate in contract negotiations to incorporate appropriate data privacy and confidentiality-related terms in the contract.

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Strategy

Governance Policies, Standards and Procedures Risk Management Processes

Tools and Technology Metrics and Reporting Communication, Training and Awareness

Figure 2: SRM Framework

Active internal audit function: More recently some internal audit groups have also started playing an increasingly critical role with respect to SRM by assessing compliance, and identifying matters requiring actions related to supplier risks. In some instances this may include performing security audits of clients or engaging an external party to do so. In many organizations, where SRM practices are not proactively executed, internal audit, often by default, executes elements of SRM processes as does the Chief Information Security Office.

Focus on continuous improvement: In our experience, successful and effective SRM functions are those that continually review and refine their working relationships and processes with specific internal and external stakeholder groups and act and operate as an integrated seamless function of the organization.

A successful case in point, which provides useful insights to firms in the financial services industry, is the SRM scenario at a global bank that provides banking, credit cards, and other associated financial services to retail and institutional clients. The supplier risk exposure of this organization exponentially increased in the last three to four years due to a number of factors and, in 2011, in excess of 20,000 suppliers provided several billion dollars of services globally to this organization. While this organization has had some success in implementing and operating SRM functions, it also realized that continuous refinement and recalibration of these functions and key relationships with stakeholders was necessary.

This institution built and executed SRM programs using a multifaceted framework (see Figure 2) and continuously assessed performance against industry practices and www.globalizationtoday.com

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MANAGING SUPPLIER RISK benchmarks. The organization fared better than industry standards by leveraging a centralized SRM team, holistic SRM strategy, well-defined risk-based supplier classification model, mature risk management processes, strong internal audit function, frequent risk updates and governance meetings with senior executive involvement, regular risk awareness building activities, high level of coordination among stakeholder groups, and above all, an aggressive vision to continuously outperform regulatory expectations and known industry standards.

A specific decision undertaken by the Supplier Risk Management function was to classify the 20,000+ suppliers based on their inherent and residual risk profile. This multi-tiered supplier risk classification approach drove the applicability, frequency, and degree of depth for executing SRM processes. For instance, the organization’s most critical suppliers were subject to quarterly financial checks covering a number of data points while such checks were performed on less critical suppliers twice a year with a shorter list of evaluation parameters. This differentiated approach determined that the appropriate level of due diligence was expended on suppliers in applicable tiers.

Tools, technology and SRM reporting: The organization made continuous investments in tools and technology that provided easier access to risk information, visibility to progress of SRM activities and made the overall program more adaptable to changing supplier risk exposure. To further enhance efficiencies, initiatives are underway at this organization to develop a SRM toolset, including enhancement of tool integration and operability between systems. The effectiveness of the SRM function is continuously tracked and reported leveraging in excess of 40 Key Risk Indicators (KRIs) touching multiple dimensions of supplier 48

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Figure 3: SRM governance and risk areas

risk, including KRIs measuring the level of dependence on critical suppliers at a strategic level to service level management measurements at a functional level.

Effective SRM governance model: What we have seen work well, both at this organization and across leading players in the financial services industry is an increasing adoption of either a centralized organization for SRM or a welldefined set of SRM roles and responsibilities distributed across multiple stakeholders with a level of centralized governance oversight.

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an ongoing program that should be flexible and nimble to adapt to the changes in the supplier landscape and corresponding changes in supplier risk profiles.

Narrow approach: A common mistake we see is that SRM groups have tended to take a narrow approach to managing risks without considering a holistic, enterprise-wide view of risk exposure and without considering risks across the different stages of the sourcing life cycle. Furthermore, organizations have typically ignored customizing the applicability, timing and degree of depth of executing specific risk management processes based on supplier class and the stage of the sourcing lifecycle. For example, at what points during the sourcing lifecycle can you execute IS security audits or financial stability analysis on a supplier?

4. What are the common challenges that organizations should address when implementing SRM? Our interactions with CXOs, risk management groups, and regulatory bodies in the financial services industry lead us to believe that organizations have begun to adopt proactive, pragmatic, and long-term approaches to managing supplier risks. Unlike compliance programs that are executed to satisfy a specific regulatory requirement at a given point in time, firms now appreciate the need to view SRM as

Deficiencies in skill sets and tools: Limited availability of skilled internal resources with an understanding of inherent and residual risks is a critical deficiency we find in organizations.

The lack of technology-enabled tools that offer a broad range of SRM capability and the ability to drill down to identify root causes and trends also limits the effectiveness of SRM functions.

Lack of accountability, unclear roles and limited collaboration: Limited ability of firms to define boundaries and roles of SRM functions resulting in lack of accountability and ownership, limited enforcement of a collaboration model between the business units and risk teams from operations, a lack of coordination between multiple SRM groups, and the existence of shadow SRM functions are other pain points that we have witnessed. www.globalizationtoday.com

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Inadequate knowledge of expectations: Through multiple engagements, we have witnessed several organizations unable to understand regulatory requirements due to their complexity, range of potential interpretations, and difficulty in accessing regulations beyond the United States.

As a result we have seen organizations: enhance their SRM functions by recruiting individuals with appropriate skill sets for specific roles in the SRM group, provide a clear operating model between the SRM, compliance and legal groups and increasing the level of coordination and communication with regulatory agencies.

5. What are the critical success factors for Supplier Risk Management in an organization?

Organizations are increasingly realizing that their SRM frameworks are insufficient to meet current regulatory requirements. As a result, they are actively seeking information about how to establish flexible and scalable SRM programs that can leverage industry leading-practices. Based on our experience, critical success factors for SRM implementation in an organization include: A clear definition of supplier risk tiers is necessary to understand the types of risks, such as information security and business plan continuity, which companies should assess prior to executing sourcing transactions.

Understanding supplier risk at the enterprise level can enable effective management of suppliers across the organization as a whole, not just on a supplier-by-supplier basis. Managing at the enterprise level can therefore allow organizations to understand where risks can overlap and become concentrated, clarifying 50

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how individual suppliers can affect beyond their respective lines of business. In addition, regulators are also focusing on the types of data — not just the volume of data — in the hands of third parties that execute transactions on behalf of a client.

Additional areas of risk (see Figure 3) are typically managed using a multi-level governance framework with a focus on risk at the enterprise level, line-of-business level, and individual supplier level that a holistic view of supplier risks. This can also provide lower levels of the organization with the information and resources to help make effective decisions on matters, such as reputational risk and concentration risk, which may expose the enterprise as a whole.

Reporting requirements should also be a specific focus area. Organizations should focus not only on the quality and accuracy of data, but also on reporting useful, actionable data and metrics to senior stakeholders at frequent intervals based on the tiering of the supplier and the level of risk exposure.

Perhaps most importantly, we are witnessing many organizations adopt a more flexible and adaptable approach to accommodating changes in the regulatory environment. As new risk scenarios arise, organizations are increasingly becoming vigilant in identifying challenges and enhancing their regulatory risk definitions in order to improve their SRM practices. For example, risk management processes should be flexible and scalable to report metrics at a level of detail in which metric measurements can differentiate between supplier A and supplier B, especially as there are often several different types of critical suppliers.

Many organizations continue to be focused

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About the Author Ajay Bolina Principal | Deloitte Consulting LLP on meeting regulatory requirements, manage operational risks and elevate internal SRM standards by adopting a strategic and holistic view of risk within a portfolio of providers spread across various functions, services, and geographies; utilizing metrics and reports to assess supplier risks at various levels of the organization; and making applicable management information available to support effective governance, controls, and decision making.

Conclusion: Deloitte’s experience indicates that implementing an effective SRM model with appropriate processes, systems and tools, and supplemented by individuals with the requisite skill sets, organizations can achieve the aforementioned and effectively identify, track, manage, and help mitigate supplier risks at the enterprise level.

For more than 15 years Ajay has held a number of global leadership roles in both service provider and client organizations leading IT sourcing, Service Delivery Transformation, and Operating Model design programs. As a client he managed in excess of $10BN of IT outsourcing spend, today he helps clients execute large, complex transformation and end-to-end outsourcing transactions for IT, Application and Business Process related services, while ensuring implementation of effective supplier risk management and governance strategies. At Deloitte Ajay led the design and build of our Vendor Management, Governance and Supplier Risk Management capabilities serving clients in Australia, Canada, Europe, Singapore, and the USA.

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