L&T Infotech -

The credibility of offshore outsourcing, especially for large-scale, diverse and mission-critical IT systems, having been proven over the past five years, has been elevated to a level of 'must do' for attaining operating efficiencies, writes V K Magapu, chief executive of Mumbai-based software developer, Larsen & Toubro Infotech Limited.

India's outsourcing story is essentially but erroneously considered to revolve around the low-end BPO business, largely consisting of call centres, but the story which is yet to unfold and dazzle the world is the high-end outsourcing that has quietly been happening but due to lesser volumes, has not captured the global imagination.

India has emerged as one of the hot favourites for offshoring, primarily on the strength of its reliable legal structures, a culture of contract fidelity and an abundant, ever-expanding supply of competent, hard-working software consultants with the right attitude.

While the above describes a robust start, realising the full potential of outsourcing, especially in large multi-year contracts, will be elusive unless all or most of the following are fully catered to:

• Robust implementation of transitioning and knowledge management
• Demonstrable capabilities in ramp-up of resources and quick learning of special technologies
• Constant attention from the vendor's top management and the presence of a governance frame work
• Agility and readiness of the vendor for adapting and exhibiting flexibility
• Demonstrable contract longevity with respect to contract fidelity and vendor stability
• Robust quality of service driven by knowledge management and attrition control
• Teamwork underwritten by investment in team-building exercises

Larsen & Toubro Infotech Limited, a wholly owned subsidiary of Larsen & Toubro Limited in India, delivers on all the above while providing special value on the following fronts:

• Increase in market share for manufacturing enterprises driven by business intelligence and product life cycle management overlays on integrated and widely used ERP systems
• Robust performance of systems for the BFSI enterprises driven by value adding, independent verification and validation for functionality and throughput, re-architecting for grid computing, enterprise data management and service-oriented architecture
• Reduction in time to market for telecom infrastructure enterprises driven by 'right first time' cutting-edge software for handsets, cellphones and network elements in the wireless communications arena

In addition to the above, on an overall basis, we transform while performing (for example by upgrading during the tenure of the maintenance contract). We also add special value through horizontals like ERPs, yielding continuous value delivery. The following two case studies show how we provide specific, unique solutions to meet each client's needs.

US INSURANCE COMPANY

With reported revenue of $24.4bn in 2005, the client offers a wide range of property and casualty insurance products and services to businesses, organisations and individuals, primarily in the US and in selected international markets. It is divided into the commercial, specialty and personal business segments.

Commercial and specialty products are distributed primarily through a network of approximately 6,300 independent agents and brokers; personal products are distributed primarily through approximately 7,800 independent agents.

To meet the ever-growing business needs, the client was looking for a solution that would provide a competitive edge to business through faster, better, economical solutions leveraging an agile IT organisation. The service goals included:

• Increasing bandwidth of IT while lowering the $ / person-hour spend
• Seeking and leveraging industry best practices through strategic IT partnerships
• Improving speed-to-market and lowering the company's overall operating costs

PARTNERSHIP

As a strategic enterprise-sourcing partner, L&T Infotech provides an entire array of IT services ranging from testing to project management, production support and process consultancy. The services are being offered in an onsite / offshore model and from different geographic locations.

L&T Infotech adapted the Extended Development Centre (EDC) model for this engagement as it enables seamless integration between the onsite and offshore teams, and simultaneously leverages on the learning and solutions of different technical and domain departments situated offshore. The EDC model ensures that the relationship provides the client with the necessary bandwidth in skills and most importantly the agility in meeting the ever-fluctuating business needs.

Some of the benefits to the client:

• Faster time-to-market through compressed testing lifecycle
• Enhanced operational efficiency through offshoring
• Thought leadership through dedicated domain and technology competency groups
• Knowledge management portal
• Cross-training of the resources and 'client-ready' resources to handle peaks
• A substantial 45%-65% cost saving across all modules

The relationship has been in operation for over four years and is based on the solid foundation of quality and on-time deliverables.

GLOBAL ENERGY COMPANY

The client, one of the largest integrated energy companies in the world, conducts business in 180 countries and is engaged in every aspect of the oil and natural gas industry, including exploration and production; refining, marketing and transportation; chemicals manufacturing and sales; and power generation.

Spurred by an increasingly competitive market with many new, lower-cost providers competing for production support work, the client was looking forward to outsourcing production support work to India by implementing global delivery models through geographically dispersed, offshore delivery centres. The main drivers for outsourcing were sustainable cost reduction, flexibility, risk management and quality of operations.

Further, the client was looking for a service provider with domain expertise in general and in the oil and gas industry in particular, hence able to scale up as required, with a customer focus in servicing, global rollout capability, and the ability to offer skills around multiple technologies and in consulting. The client also wanted a service provider that was keen for more business and which could bring in operational efficiency and could become the main partner.

STAGED IMPLEMENTATION

L&T Infotech used its proprietary Offshore Outsourcing Model (OOM) Framework©, which focuses on integration of multiple processes, implemented at various stages of the outsourcing engagement.

The first two stages mainly focused on planning processes for knowledge-sharing and service delivery to executing the knowledge transition plan as scheduled and ensuring that the resources certified by client took over the production support activity smoothly.

Production support and adhering to the SLA targets with minimal/no impact to the end-user was the primary focus in the third stage. A major challenge here was to manage the production support with right mix of onsite and offshore team knowledge base.

The main objectives in the fourth stage included production support, with value addition in terms of continuous process improvement, new developments, meeting SLAs and excelling in each area, reducing the number of problem tickets and improving on the support model. The client awarded L&T Infotech their 'Supplier of the Year Award' for 2005. The selection was based on six parameters among 14 IT vendors.These successes demonstrate how Indian outsourcing businesses are moving to the next level, offering high-tech, high-value service to global business. The days when India was merely the back office of the world are long over.