Quelle: CIO, Asia
An automotive manufacturer that prides itself on a brand name, that is synonymous with excellence, has hardly a choice but to invest in the best of resources and processes, to stay at, or close to, the top in its industry. "Our focus is to provide our customers with a high-quality product and the service that comes with it," says Klaus Felser, the vice-president of IT management for Asia-Pacific and Africa at DaimlerChrysler SEA Pte. Ltd. DaimlerChrysler is the manufacturer of the Mercedes-Benz marque of cars, among other brand names. The company has implemented processes--in its factories, wholesale centres, retail outlets and soon--that have been fined-tuned to the point where it can deliver vehicles to each and every customer, to their exact specifications, anywhere in the world, on time, says Felser. All this, however, has transformed the supply chain between the DaimlerChrysler factories and its customers into a complex one. What adds to the complexity is the fact that DaimlerChrysler has several factories at different locations around the world, all serving global markets.
DaimlerChrysler, as a result, has had to invest heavily in IT. One of its key investments has been in ERP. It started to roll out an SAP R/3Wholesale Template in January 2001, to track the movement of vehicles within its distribution network in Asia-Pacific and South Africa. "This solution, [among other functions], connects our dealers throughout this region with our regional wholesale operations in Singapore, which, in turn, is connected with our production sites," says Felser. "So, we know where each and every vehicle is and its status in the production and distribution lines, [in real time]; we're also able to track the movement of components we use in our workshops."
However, managing this system has been a complex job. "This is why we invited [Indian software vendor] Infosys to help us," says Felser. Infosys Technologies Ltd. is India's largest listed IT-service company. "At the time we initiated this SAP solution, DaimlerChrysler had taken on the role of project leader: formulating strategies, planning, hiring and deploying resources, coordinating and administrating the whole project with the assistance of several consultants from several companies." But it soon hit upon DaimlerChrysler that managing the package rollout, its development and support, and upgrade, was not its core competency. "In June 2001, we decided to restructure the initiative and to engage the most appropriate professional service partner to take over some of the responsibilities we were doing ourselves." He adds: "Infosys was selected to rollout and implement the SAP R/3 Wholesale Template in eight countries, take over development and maintenance, provide second-level support as well as upgrade an application called the Vehicle Management System (VMS), that was plugged into the package, to version 3.0, from 2.0." DaimlerChrysler retained the role of driving the strategy and planning, so as to keep mission critical know-how in-hous.
Strutting the stage
DaimlerChrysler made its first contact with Infosys at the time it had invited vendors to bid for this project. "Our target was a dependable partner who would be able to deliver business solutions with strong technical excellence and cultural compatibility in all aspects of the template," says Felser. This partner had to satisfy the following qualifications: necessary regional coverage, depth of practical SAP experience, leadership and programme management capability and, to top it up, it had to deliver these three objectives at a considerable lower total cost of ownership. "Since the wholesale template is a complex project, we chose to evaluate the bidders on the basis of a weighted criteria system. Rather than automatically accept the lowest price, the tender assessment process applied weighting for skills, quality, experience and previous performance, in a manner to ensure value for money."
A comprehensive tender document comprising 82 assessment criteria was sent out to major IT-service providers, "which included the big consulting houses, major systems integrators and smaller niche SAP specialists," explains Felser. "To cover the full scope of the work, some of the companies had formed their own consortiums. Infosys, however, bid for the project as a single total solutions service provider."
DaimlerChrysler short-listed three companies, of which Infosys, of course, was one. It used the following criteria to evaluate the three finalists: partner clarification presentations, customer references, partner site visits, and interviews and assessments with the prospective partners' key executives. "All the three finalists had impressive credentials," says Felser. But what won the day for Infosys was its attitude. "We were impressed by the educational standards and experience of the Infosys people we spoke with," says Felser. "I'd like to add that the Indians [I have dealt with in the IT sector], especially the Infosys people, are very highly motivated and dedicated...they have a vision and mission; it's not just about clinching a contract and making money. They have a different set of values, which is something we haven't seen elsewhere."
Can't run away from risk
DaimlerChrysler's meticulous evaluation process reads like a roadmap for any Asian corporation looking to work with an offshore IT outsourcing partner. "We spoke with Infosys's customers--global companies that had complex IT infrastructures. We had an in-depth look at how Infosys conducted itself with these companies. We also checked on costs [these companies had incurred in working with Infosys] and asked them a lot of questions about Infosys's ability to adapt to sudden changes in the business environment." The ability to respond quickly to changes was an especially important character that DaimlerChrysler was looking for in its prospective partner. Cost, though important, was not the highest priority. "But, it was nevertheless an important factor in our decision-making process."
One of the key factors that impressed DaimlerChrysler was the processes that Infosys had in place: say, several Infosys employees working on a project were to leave; its processes, however, are so well defined, the disruption to ongoing work, if any, would be minimal. "I think Infosys's approach during the transition phase [of any project] is not to move too fast, so as to not destabilise the running of the operation, yet, [at the same time], not to be too slow in implementing [its plans]." The first step Infosys took on entering into the project was to work out a transition plan with DaimlerChrysler, bringing with itself the processes and methodologies it had acquired through its own experiences with clients all over the world. "Infosys undertook an audit and due diligence of our existing processes and working model and came up with recommendations and suggestions on the way forward. They were able to do all this despite the challenges of tight deadlines, very limited knowledge [at that time] of DaimlerChrysler's processes, the difficulties of working with diverse cultures across Asia-Pacific as well as with having to coordinate with geographically dispersed teams."
Adds Felser: "They had implemented checkpoints and milestones set for all the important steps, giving us always the confidence that a comfortable level had been achieved before continuing with the next step. The communication between Infosys's onsite team (in Singapore, where DaimlerChrysler's server covering 15 countries in Asia-Pacific and Africa, is located) and offshore team (in India) has been structured to ensure that the knowledge is shared and exchanged efficiently." Application development is carried out in Bangalore, India's IT capital.
The DaimlerChrysler-Infosys partnership has been moving to newer heights, says Felser. "The Infosys team members are like my extended IT organisation. They have been a value add [to us] by continuously suggesting improvements in the area of IT management and bringing in best practices in software development. Being a total end-to-end service provider, they have also been able to extend other services to us, such as middleware expertise and other non-SAP technical skills. This has provided us with flexibility and access to capabilities without having to worry about fixed overhead cost [heating up] and [loss in] time-to-market." He adds: "We have enjoyed cost reductions as a result of partnering with Infosys. In the areas of development, second-level support and local rollout support, we have reduced costs by 30 to 40 percent."
Today Asia, tomorrow the world
Felser, later this year, will be taking charge of DaimlerChrysler's global Centre of Competence in Germany, which is responsible for developing IT solutions for the company's sales and marketing operations. "One of the first things I plan to do when I am back in Europe is to [geographically] widen our partnership with Infosys." DaimlerChrysler is not the only enterprise to have raved about its partnership with an Indian vendor. The Singapore Exchange too has selected an Indian partner, which, in this instance, is India's largest IT-services company.
It's a cruel world
International financial centres, on the hunt for opportunities to channel flows of global capital, have to do what it takes to look savvy and sophisticated. The Singapore Exchange Ltd., or SGX, epitomises this effort. "We're continuously on the search for technologies that will help us deliver quality services to our customers and participants," says Cher Hung Mong, a senior vice president and head of the SGX's IT application development department. A project that Cher and his colleagues is currently working on, that typifies their efforts to upgrade the SGX's capabilities, is in the reengineering of its central depository management applications. "We're currently Web-enabling these applications," says Cher. "This will enhance the Central Depository's market reach and enhance the user interface for our participants."
To achieve this target of web-enabling these applications, the SGX has partnered with India's largest IT-services company, Tata Consultancy Services, or TCS. "We started this project with TCS in October 2002,"says Cher. "It will take about one year to complete." TCS was one of three software companies that were short-listed from a list of initial bidders. Cher did not want to reveal who the other two finalists were, but he did share the reasons why the SGX selected TCS.
It's not cost alone
SGX had listed four key requirements in its selection process that the winning vendor had to satisfy: expertise in implementing solutions in the financial sector, expertise in implementing Java, willingness to transfer skills and share know-how, and, of course, it had to do all this at a reasonable price. "The first thing that attracted us to TCS was its experience in the financial industry: they have implemented solutions at several Indian and European stock exchanges," explains Cher. The second factor that drove the SGX to embrace TCS was the latter's expertise in implementing Java-based solutions. SGX hardly had, at the point of time they selected TCS, any Java expertise, whereas the latter had a large pool of professionals that have developed and implemented Java-based solutions. The third factor was intellectual property ownership. "SGX will own all the intellectual property and all the solutions that TCS will develop and implement for us," says Cher. "Given that we are new to Java, this transfer of skills and know-how is extremely important to us. TCS will also train a team of Java architects for the SGX." The final factor was cost. "TCS's quotation was very competitive and it was among the lowest-priced bidders." Of course, the SGX did the necessary homework to verify TCS's credentials and strengths before signing the latter on to the project. "One of the attractive features in TCS, that we discovered during our research, and which did give us a lot of comfort, was that it has a huge pool of skilled manpower to draw on for any of its projects," explains Cher. TCS has more than 16,000 software professionals on its payroll.
Crawl first, then walk
The first step that TCS took, upon starting work in the project, was to understand the Central Depository's existing processes. "The next step was to start on the development of the Web-based solution, without tinkering with the functions that came with the legacy system," says Cher. All this means that TCS does not have to develop any new business processes for the SGX. "TCS simply has to Web-enable the applications, using Java technology."
TCS has split its workload between India and Singapore. It has several people working onsite at the SGX. "TCS is still at the stage (as of January this year) of drawing a list of requirements that need to worked on, before they put up a plan," explains Cher. "Most of the application development will be done in India. So, [immediately after]they have completed the collection of data and are sure that this indeed is what they need for the job, they will start on the application development. The applications will be initially tested in the southern Indian city of Chennai." Once the two sides are satisfied with the results, the applications will be transferred to Singapore for the final tests.
Challenges
Cher says the key challenge that the SGX is likely to face is in the use of Java. TCS has so far shared their insights into best practices in design patterns, the use of Java frameworks and so on. "They have been very active in proposing alternative views and new ideas to our suggestions and proposals." The SGX, however, is not alone to have acquired a new set of skills from an Indian vendor. An American project management company says that its relationship with its Indian partner has become indispensable to the success of its global business.
Two companies, one spirit
We have all heard of executives toiling into the twilight hours, hurriedly putting the finishing touches to business strategies and plans. The sad part is, many such ideas are not even given second thought after the presentation. What is worse, however, for the ideas that do win acceptance, is that many are not acted on, or even if they are, it is done half-heartedly or incorrectly, with the result that, the company's objectives in implementing strategy are not achieved. This is why companies often call upon the expertise of implementation experts--also known as project management specialists. "What we do for companies is to ensure that their strategies are translated into focused and effective action," says Michael Mobley, CEO, IPS Global Partners, Inc. Its client list covers a slew of blue-chip names such as Citibank, Dell, Sun Microsystems and Singapore Airlines. "Our job is to ensure that the processes are not only implemented, but are fine-tuned and made scalable," says Howard Vaughan, managing partner, IPS Associates Asia Pte. Ltd. Mobley uses the analogy of a speeding bicycle to illustrate the challenges IPS's clients face in implementing projects. "Think of our [typical] client as being on a bicycle riding downhill at full speed on a bumpy road." The speed symbolises a dynamic business. The bumpy road symbolises a tough and often unpredictable business environment, and, thus, the cyclist (management) has to have a good grip on the handle and needs to be alert for unexpected danger. "We prepare both the cyclist and the bicycle for the challenges ahead; we do it while the bicycle is still in motion."
Stuntmen@work
However, it is not just IPS that jumps on to the bicycle, with the cyclist frantically pedalling. The processes and solutions it implements, without exception, are IT intensive. IPS has partnered with Satyam Computer Services Ltd., one of India's largest software development companies, to develop the applications, or tools, to fit into the processes that are being developed for a project. "Project management incorporates three dimensions: processes, people skills and tools," explains Mobley. "The tools assess the data of the projects being implemented or, if it is a set of related projects, it analyses the interfaces or connections between the projects. We're good at creating and implementing customised processes and training the people to work on these processes." However, identifying or creating appropriate enterprise-wide tools is trickier. There are tools available off-the-shelf, "but these may be far from suitable for the projects that our clients are implementing." In fact, each project and client is unique and, it follows, it is likely that the tools need to be custom-developed. "Therefore, we needed an IT partner who was swift in execution and passionate about the value that project management brings to a company." IPS saw all these qualities in Satyam. "Satyam, like IPS, has significant global experience, has worked with a diversity of clients and has the experience of working with proven profit-generating processes at some of the best companies in the world." All this, in short, has given Satyam the capability to acquire an in-depth understanding of IPS's objectives and service-delivery model. "This is a truly valuable insight for us. In addition, Satyam has far more exposure to operational processes and supporting software than we do. So, what we have done by partnering with Satyam is to have brought in their competency, which is managing operational processes to complement our competency, which is implementing strategic initiatives and projects. We needed a partner who could design ways to make specific crucial project information available and integrate it with ongoing operations." Satyam develops its applications in the cities of Hyderabad, which is India's second largest sofware development centre, and Chennai.
To hell with cost!
There is a perception that one of the factors driving the success of Indian IT-service providers is their low cost. However, low cost was certainly not a factor that influenced IPS's decision to partner Satyam. "In fact, Satyam was the most expensive partner that we had selected from a list of bidders. The key criteria was quality and effectiveness," says Mobley. "This is because our reputation is on the line when we implement projects." IPS's clients invest anywhere between 40 and 80 percent of their annual budgets on project-related work, says Mobley. In other words, even a single mistake can put IPS's reputation on the chopping block. So how did the two meet? "IPS has worked with a gamut of application developers for a wide range of clients," says Mobley. "But we had this particular client that was very IT savvy...they were not easy to please. So, we needed a partner who could keep up with the demands of this client...we teamed up with Satyam for this project." This experience showed IPS that Satyam had the savvies for working in tough situations. "It was obvious that we shared common values and our relationship started to evolve from that point."