Offshore Captive Model

Five Factors

 Cloning Onshore

 Remote Management

 Skill Expectation Mismatch

 Absence of Scale

 Work Discrimination

1
Cloning Offshore

Approach of trying to re-create an onshore (US or European) center, offshore

- Hire comparable people
- Transfer existing ways of working (i.e. processes)

Why it does not work

 Offshore staff is low on experience but high on energy
 The brightest and the best here are attracted to the software industry
 Results in lot more peer pressure in the software industry here
 Unlike western world where best talent is equally distributed across industries
 Above two results in
 Skills expectations mismatch
 Economic/Cultural/Demographic gap

How to make it work

 Make captive result oriented not task oriented
 Challenge the offshore staff
 Run it as profit center (like IT vendors)
– Captive operations “sells” its services within the global organization
– One global team with local management/leadership

2
Remote Management

Approach of having onshore managers manage an extended team

Why it does not work

 Geographic Gap
 Onshore sleeps when offshore works and vice versa. Effective supervision?
 Cultural Gap
 How to keep them motivated when managers can not pronounce their names
properly, or practice their religion, or understand their movies/music/language etc.
 “Hard work never killed anyone” - 40 hours week is a new concept in India.
 Economic and Social Gap
 Offshore staff live in a different economic & social environment
– Hard for global managers to make decisions on increments/promotions/incentives/benefits
– Hard for them to understand what makes offshore staff tick!

How to make it work

 Invest in “Managers” offshore
 Center Managers, Division Managers, Project Managers
 These managers “sell” offshore capabilities to their organisations
 Align these managers with onshore Organization

3
Skill Expectation Mismatch

Looking for a skill mix offshore that resembles the existing skill mix onshore
- Looking for programmers with 10 years of experience or Architects with 20 years
of experience or ready-made specialist skills

Why it does not work

 >5 years of experience makes people module lead or project manager
 Offshore programmers are, by definition, juniors
 Very few people here pursue technical growth path due to lack of opportunities – Catch 22
 Software in JP Morgan is too fragmented to realistically expect sufficient offshore experts
in all areas

How to make it work

 Offshore programmers are juniors but they are also over achievers. They are good enough
to write application software
 Have senior onshore staff mentor the captive staff
 Travel/Deputations
 Invest in training captive staff
 Lock in with retention bonus
 Let the offshore staff “figure it out” by themselves

4
Absence of Scale

Captives are minuscule in staff size in comparison to IT vendors in India

Why it does not work

 Captives are setup with a disruptive growth followed by stagnation
 We compete for staff against giant IT vendors
 Just because of their size these firms provide better growth opportunities
 Money is a necessary factory but not sufficient to retain talent

How to make it work

 If you do not plan to have a size in any specific area, go with a vendor
 Offshore is proven. No one should doubt that by now
 Get the offshore leadership in place
 People need to see a career path in the organization in order to stay with us

5
Work Discrimination

Do ONLY low-end work offshore, Onshore will move to High-end work model

Why it does not work

 Works ok for a vendor engagement but not for people on our payroll
 Bad of morale of people
 Links back to the fact that these are over achievers in Indian society
 De-motivates high performers, High attrition levels
 Any shabby offshore operation can achieve this. Is this what we really want?

How to make it work

 Balance between low-end and high-end work
 Increase offshore involvement in new transformational programs
 Nurture local leadership to achieve above two points