The current business environment driven by socioeconomic changes has impacted IT and global delivery models to the point where they must reinvent themselves. The flat-world phenomenon is witnessing a reversal of sorts as organizations that have outsourced in the past or who are planning to outsource are required to adapt to this change.
In response, many companies are posed with the challenge of adopting a recession-friendly approach to manage the service delivery framework, while leveraging knowledge and talent within their organizations. A Collaborative engagement model helps organizations achieve this objective by blending in-house knowledge with the global delivery framework to derive better results. Combining the existing talent with the global workforce provides the advantage of near-zero transition cost and timelines, and reduces the requirement for work-permit-dependent resources. In addition, customers key personnel get the opportunity to be part of the global service delivery process and practice, thus enhancing their overall capabilities.
In contrast, traditional outsourcing models take a relatively longer time to generate ROI. Engagements that require higher customer interaction and management (see highlighted section in Figure 1) are typically difficult to outsource. They have longer project lead times, legal issues associated with acquiring work permits and a protracted knowledge transfer process. CEM addresses these scenarios and enables a steeper reduction in development and maintenance cycle times.
Collaborative Engagement Model Overview
CEM is a nontraditional approach to outsourcing that streamlines the knowledge transfer process by minimizing the need for on-site vendor resources. Rather, it relies on existing customer staff to interact directly with a vendor's global delivery team. This not only reduces the ramp-up costs for both vendor and customer but also disaggregates processes with methodology and workforce, enabling more flexibility in sourcing talent globally. This accelerates the development process while providing customers with more flexibility in project selection.
Customers can choose a more aggressive approach by tackling critical development projects up front, leading to steeper cost reduction over a shorter period of time and quicker response time. Customer personnel can also get more exposure to global delivery and project management experience.
The bottom line is a recession-friendly approach that enables faster project delivery with better returns.
A traditional global delivery model anticipates the use of an on-site vendor workforce that addresses coordination, collaboration and knowledge requirements to support delivery offshore. Generally, this necessitates that the vendor workforce located in the customer's geography be about 15 to 40 percent of the overall effort, creating logistics and cost implications. This can be reduced substantially by leveraging the customer's existing full-time employees.
A vendor's CEM should assume that at least 15 to 35 percent of the customer staff be able to take up those functions the vendor's on-site resources typically perform, such as business analysis and on-site coordination. New roles assumed by customer FTEs (viz. domain and subject matter experts) require formal training to ensure that the knowledge of global delivery is retained and enhanced by the SMEs embedded in the delivery cycle. The vendor resources are primarily located globally resulting in an optimal mix of skills, driving higher cost efficiencies.
The model is supported by a joint governance structure empowered to review and maintain performance rigor. The following section briefly explains a typical implementation approach for application development.
Collaborative Development Model
The collaborative engagement model for application development highlights the areas and the extent of customer and vendor involvement for the various software development lifecycle (SDLC) and support process activities.
In CEM, customer talent is rooted in the global delivery workforce, thus increasing customer participation to as high as 15 to 35 percent of the resource pool for a project.
The following key customer SME roles must be defined as part of the engagement: business system analysts, architecture team, on-site coordinator and release manager.
The collaborative development model depicted in Figure 4 focuses on joint ownership for the results of the projects. Activities such as estimation, testing and project monitoring are done jointly; access to business priorities and planning are provided to the vendor to enable and maintain an optimal level of resources.
As part of the implementation strategy, customers should expect vendors to provide frameworks consisting of key elements that cover various aspects of service delivery such as people, processes and tools. The following elements are particularly important:
- A defined, easily repeatable set of processes and methodologies that cover the complete engineering development and support lifecycle.
- Digitization frameworks.
- Governance frameworks including RACI matrix and roles and responsibilities.
- Standard operating Procedures such as templates, checklists, guidelines and service level management frameworks.
CEM has been effective in delivering a consistent and continuous customer interface, to create a common operating system that leverages best practices of both customer and vendor and joint accountability for service delivery.
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