www.the-outsourcing.

com
RM12, S$8, US$8
KDN NO: PP14967/02/2010 (023611) MICA (P) 140/07/2009

PREMIER MAGAZINE ON BUSINESS AND TECHNOLOGY SERVICES INDUSTRY

I S S N 1 9 8 5 - 1 0 0 6
ISSUE #16, 2010

Bob Chua:
The man
behind
pulsating
Pulse
Matrade-outAD.indd 20 5/27/09 11:01:05 PM
MDEC-ad(out15).indd 1 11/17/09 2:28:29 PM
 43

24

23

12

34

28
 CONTENTS
6 Malaysia shines at
APICTA Awards

20
8
India will remain on top of
outsourcing world, says survey

12 KPO is all about innovation

Bob Chua: The man behind

16
pulsating Pulse

20 Creating an engaged workforce

23 A new year ray of hope

24
Adopting lifecycle approach
to globalisation journey

28 Rules of thumb for leading change

30 ‘Socialising’ with research

32 Challenging times for data centres

Generating innovation in
34
offshoring relationships

38 Mentoring in the workplace

43 64 companies honoured at MSC

Malaysia Achievement Event

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 Editor’s note sri@wordlabs.com.my

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Bob Chman
The ind
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pulsatuinlse
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“It’s tough trying to keep your feet on the ground, your

head above the clouds, your nose to the grindstone, your
shoulder to the wheel, your finger on the pulse, your eye
theteam
the on the ball and your ear to the ground.”
– African Proverb

It seems, Bob Chua, founder and CEO of Pulse Group

Managing Editor/Publisher: PLC, is managing just that and more.
Sritharan Vellasamy In our Cover Story, we train the spotlight on this shining
star of the Malaysian outsourcing industry.
Consultant: From a standing start mere five years ago, his outfit has
Sundra Surian developed from a small start-up into a publicly quoted
company on London’s PLUS markets – providing online
research services to an international line-up of market
research and media clients globally.
Here, the 36-year-old visionary shares with us his
editorial: editorial@wordlabs.com.my ambition to put a “Pulse” in all sorts of research, anywhere
and everywhere around the world.
Sub Editor: Simon Vella Pulse is indeed one of the very few Malaysian
Art Director:Steven Choo outsourcing providers that have a proven global pedigree
Graphic artist:Shafie Osman and outlook.
Contributors: Tamyne Menon, Besides, it is a fine business example for other local
Dorothy Llew, Mohd Arshad providers to emulate in order to move up the value chain
Coordinator:James Wee instead of being stuck in the “low-value and high-volume”
arena – an obvious disadvantageous domain due to its
commoditised nature and the country’s inability to scale
up as efficiently as compared to other locations with
bigger talent pools.
sales: sales@wordlabs.com.my Chua tells us: “The push towards a more lucrative KPO
value chain is a good direction to head in, moving the
Vikraman Visno nation out of the lower-level commoditised outsourcing
Resh Nathen tier where competition amongst India, China and the
Philippines is relatively fierce.”
Be also sure to check out our feature: “Generating
innovation in offshoring relationships” – where Danny
Ertel and Joseph Bubman explain the current burden on
contact: admin@wordlabs.com.my providers for continuous improvements in their operations
and offerings.
Meeting such customer’s demands is easier said than
done, they agree.
Based on a study undertook by them recently – the
duo explore how cultural challenges impact innovation
efforts and offer best practice solutions for overcoming
them. – Sritharan Vellasamy

WORDlabs MEDIA (001645509-W)

27-1, Metro Centre, Jalan 3/146,
Bandar Tasik Selatan,
57000 Kuala Lumpur;
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Outsourcing | news bitS

Malaysia shines Put brakes on

rising costs of

at APICTA Awards
Malaysia showed its prowess at the Inter- Berhad for Financial Industry Application.


outsourcing car
components
The International Trade
and Industry Ministry (Miti)
national Asia Pacific ICT Alliance (APICTA) The Sultan Alam Shah Secondary School has been directed to look
Awards 2009 by walking away with six team and the Multimedia University (Cy- into the reasons behind the
awards.

 berjaya) picked up the merit wins under the higher cost of outsourcing
Malaysia won the main awards in the Com- secondary student and the tertiary student car components, which is
munication, Creation and Management to New projects respectively.

 nearly 10% higher than that
Media and Entertainment, e-Government and The results of the competition was an- of Thailand.
Financial Industry Application categories.

 nounced at a gala dinner ceremony at the Malaysian Deputy Prime
The merit wins were in the Secondary Crown Tower Hotel in Melbourne on Dec 17.

 Minister Tan Sri Muhyiddin
Student Project and Tertiary Student Project MAMPU’s Deputy Director of Infrastructure Yassin said although the
categories.

 Development, eKL, Norhalina Abdul said they country could be a hub and
Tranglo Sdn Bhd was chosen as the winner were excited as it was one of the first projects compete with other countries
in the Communication category, SHOCK3D! conceptualised by a Malaysian government in manufacturing cars for
for Creation and Management to New Media agency to have won an International ICT export, cost remained an
and Entertainment, Malaysian Administrative award. ”We hope more government agencies issue that was putting the
Modernisation and Management Planning will follow suit in taking part in such competi- brakes on the automotive
Unit (MAMPU) for e-Government and eBworx tions in the future,” Norhalina said. industry players from
entering the country.

MDeC to host next event “There are thousands

of components in a vehicle
Malaysia, the inaugural host it’s going to be held on Oct Branding and Marketing and these are produced
of the APICTA Awards10 years 10, 2010. So it’s 10, 10, 10 Division. by vendors in our country,”
ago, will host the awards again and since it will be APICTA’s “For good measure I shall he told the Malaysian
coming October.

 10th anniversary, it will be 10, recommend that we open press recently after a
“It’s going to be an 10, 10 and 10,” said Niran the event at 10 o’clock in the round-table meeting with
auspicious event because Noor, MDeC’s Vice-President, morning. How good is that!”

 24 captains of industry
and witnessing the signing
of two memorandums of
Redza is new Northern understanding.
“When they compare it
Corridor chief executive with vendors in Thailand,
the increase is almost 10%
The Northern Corridor received by NCIA and is effective more. So, they consider this
Implementation Authority (NCIA) Dec 31, 2009, the statement said. unattractive. We need to look
announced the appointment of Redza, who was the managing into the details carefully.”
Datuk Redza Rafiq Abdul Razak as director of Cyberview Sdn Bhd, He said it was decided
its new chief executive effective from had also been Cyberview’s chief during discussions on
Jan 1, 2010. operating officer before being Monday that Miti and
In a statement, NCIA said the appointed its chief executive officer the Malaysian Industrial
appointment follows the resignation in July 2004 to restructure and revive Development Authority
of its current chief executive Datuk Cyberjaya. He has been involved in (Mida) would look into
Seri Mohd Annuar Zaini, who had the development of Cyberjaya since the reasons, including
written to Prime Minister Datuk 1997. whether local manufacturing
Seri Najib Tun Razak on Nov 25, Redza was previously with companies were charging a
expressing his intention to resign the Multimedia Development higher price because of raw
from the position. Corporation (MDEC) prior to his material, higher management
His resignation has been duly secondment to Cyberview. costs or higher salaries.

6 | Outsourcing | January-February 2010

Out-BasisBayAD.indd 20 9/24/09 10:28:15 AM
Outsourcing | news bitS
e-Services 2010
to highlight
outsourcing trends
Knowledge process outsourcing (KPO)
and cloud computing are among ICT/BPO
trends that reflect the unique opportunities
arising from the post-recession era, reported
the Center for International Trade Expositions
and Missions (CITEM), an attached agency
of the Philippine Department of Trade and
Industry.
These trends are among those expected to be
unveiled at the 10th e-Services Global Sourcing
Conference and Exhibition scheduled on Feb
8-9, 2010 at the SMX Convention Centre in
Pasay City, Philippines. A premier ICT/BPO
event in Southeast Asia, e-Services is an annual
trade show and conference led by CITEM that
gathers together the best and the brightest
industry movers and thought-leaders under
one high-class venue.
The growth of KPO functions, which
demand greater business complexity such
as pharmaceutical and research outsourc-
ing, is indicative of the shift towards higher
value-added services from the back office
operations that reigned during the turn of
the century.
“High value BPO providers will be more
sought after since companies will lack the
talent, domain expertise and scale to oper-
ate their support functions,” said Charles
Villaseñor, CEO of Transprocure, a company
engaged in global BPO procurement solutions
and recipient of the e-Services Awards 2009 for
MSC Malaysia continues to
entice international companies
Four new international companies have
joined the MSC Malaysia Shared Services
and Outsourcing (SSO) community which
is well on its way to gearing up towards a
higher value economic transformation,
aligned with the nation’s direction to
transform Malaysia into a higher income
society.
They include Seagate Technology’s IT
Shared Resource Centre, BHP Billiton’s
Shared Services Centre, GlaxoSmithKline’s
second global IT centre and Snout Corpora-
tion of Japan’s offshoring set-up.
Speaking at the MSC Malaysia Shared
Services & Outsourcing CEO Dialogue
recently, CEO of Multimedia Development
Corporation (MDeC) Datuk Badlisham
Ghazali said the SSO community could
be a catalyst to build global management
8 | Outsourcing | January-February 2010
Business Development in BPO.
Cloud computing, on the other hand, has
emerged as a tool towards providing developing
economies with affordable access to world-class
ICT infrastructure, by allowing on-demand
utilisation via the Internet of a shared, infinite
amount of computing resources.
“Cost savings, reduced time to market, and
rapid return on invested capital” are the three
factors Winston Damarillo attributes to cloud
computing. CEO for Global Gateway Innova-
tion Exchange (G2iX), which pioneered Open
Source technologies in Philippines, Damarillo
is also a recipient of the e-Services Awards
2009 for Business Development in Software
Development.
“After a decade of e-Services, we want more
than ever for IT companies to be where they
need to be in order to maximise their business
advantage, in light of the current market con-
dition,” said Ma. Lourdes D. Mediran, Deputy
Executive Director and Officer-in-Charge of
CITEM, stating that the 10th year celebration
could not have come at a more opportune
time. “This year’s conference aptly addresses
the importance of collaboration in coming up
with smarter business solutions.”
For more information on e-Services 2010, log on
to www.e-servicesphils.com or e-mail itservices@
citem.com.ph
capabilities.
“The focus of MSC Malaysia is now on
high-value work that will elicit creativity
and innovation. We want this vision to
cut across all industries, and the Shared
Services & Outsourcing can play a vital
role in achieving this.”
To date, the MSC Malaysia Shared
Services and Outsourcing sector – with 170
companies ­– is the largest contributor to the
total job creation in MSC Malaysia. Out of
the over 92,000 jobs created, 40% are jobs
created by the SSO companies.
According to the 2008 MSC Malaysia
Industry Report, the sector is also the
largest contributor for export, at 62.09%,
which is equivalent to RM3.84 billion
and generating a total of RM6.14 billion
in revenue.
Hi-tech sector top
priority: Minister
Malaysia accords top priority
to develop the high technology
sector as part of the strategies
to sustain economic growth
momentum and to tide over with
stiffer global challenges, says
International Trade and Industry
Deputy Minister Datuk Mukhriz
Mahathir.


It is also to boost competitive
edge and economic resilience,
he said.

”Therefore, Malaysia
no longer promotes itself as
an investment destination for
assembly-type operations and
labour-intensive projects.


“As an open economy,
Malaysia was affected by the
global economic crisis in the first
two quarters. This had caused
a 6.2% contraction in the first
quarter and 3.9% in the second
quarter. The third quarter saw the
contraction reduced to 1.2%,”
he told news national agency
Bernama in an interview.


Mukhriz said Malaysia, like
many other countries in the region,
was facing a daunting task to woo
FDIs and domestic investments
to the manufacturing and service
sectors owing to the corporate
world’s inability to invest.


“The corporate world’s ability
to invest has been reduced due
to tighter credit conditions, fall in
company profits and sharp decline
in global demand,” he said.


Maintain edge,
Philippines told
The Philippines has been urged
to build on English language skills
to keep its competitive edge in
the global outsourcing industry.
The country’s Socio Economic
Planning Secretary Augusto
Santos warned that China is
improving its English-speaking
skills and could dislodge
the Philippines as one of the
top destinations for offshore
outsourcing. “If we don’t watch
out, we may be overtaken,”
Santos said.
Santos cited a recent
international study showing
China catching up with traditional
BPO powerhouses like India
and the Philippines. “China is
really gearing up and teaching
its people to learn how to speak
English,” he told reporters. “As of
now, we still have the edge, but
indications are pointing to China’s
catching up.”
Out-p37MalaysiaKiniAD.indd 20 9/24/09 1:39:41 PM
Outsourcing | news bitS
Logica eyes
expansion
Logica, an IT and business
services company, aims to
expand further in Malaysia
in sectors such as banking,
utilities and energy.
“We have world class
expertise in the banking,
utilities and energy sector
in Australia and Europe and
we plan to bring Logica’s
industry and business
expertise to Malaysia,” CEO
Andy Green said.
“With the focus of the
global economy moving
eastward towards the Asia-
Pacific economy, we have
seen the success our major
clients have had in bringing
work to Kuala Lumpur and
we intend to build and drive
on that,” he added.
Green said the company
was also targeting oil and
gas (O&G) companies in the
region and planned to do
more work for its European
and global accounts from
its Centre of Excellence in
Malaysia.
Logica Southeast Asia
chief executive officer Fermin
Fautsch said the company
had achieved significant
savings in moving parts of
the work it did for European
clients to the East.
Airline plans to
cut costs through
outsourcing
Air India, India’s national
airline, has announced plans
to outsource some of its IT
functions in the near future.
The Airline confirmed the
move was a bid to cut costs
at the carrier.
The move is reportedly
part of a wider plan to hive
off Air India’s various different
business units.
From the beginning of the
airline’s new financial year
it will create profit centres
around its cargo handling,
maintenance, repair and
overhaul divisions.
Air India currently has
around 30,500 employees
and salary payment is its
second largest cost after its
fuel bills.
10 | Outsourcing | January-February 2010
‘India will
remain on top’
India will remain a dominant
force in IT and business process
outsourcing for two decades, while
China will struggle to match its
success, says an authoritative study
on the fast-growing industry by
the Warwick Business School in
the UK.
IT outsourcing companies such
as Infosys, Wipro, Genpact and
Tata Consultancy Services helped
power the Indian economy to 9%
India is economic growth before the global
not a financial crisis struck last year.
powerhouse Some of their top executives fear
because growing competition from China
and are making investments in
it is cheap outsourcing capabilities there.
but Recently, Wipro opened a global
because delivery centre in Chengdu, in
it is smart. addition to a facility in Shanghai.
That’s The centre will offer services for
not the manufacturing, banking, financial
services and insurance industries.
same with It will have expertise in English,
China.” Chinese and Japanese.
– Oshri Genpact operates business pro-
Mongolia to
set up ITO hub
Mongolia is all set to open its
first major IT outsourcing centre
with India’s help.
While the two countries are
working together in a number of
Mongolian fields, IT is one in which they have
students close collaborations, the country’s
have long envoy said.
been Mongolian Ambassador
coming Voroshilov Enkhbold said in an
to India interview to IANS: “We do have
BPOs, but with India’s help we
to pursue are going to set up a major IT
higher outsourcing centre very soon. This
studies. is one of the many collaborations
This year that Mongolia and India has in
more the IT sector.”
than 500 One of those collaborations, En-
khbold said, was the setting up of
students an India-Mongolia IT school there
came here a few years back. “About four to
for that five years back an India-Mongolia
purpose.” IT school was established in Mon-
cess service centres in the Chinese
cities of Changchun, Dalian and
Shanghai.
But a report by WBS, commis-
sioned by Cognizant, the global
consulting and technology group,
predicted that the rise of China’s
less mature industry was far from
assured. “China will emerge as an
alternative, though it will struggle to
achieve scale in western European
and North American markets,” the
report said.
Ilan Oshri, one of the report’s
authors and associate fellow at
WBS and the London School of
Economics Outsourcing Unit, said
India would maintain its lead for
at least 15 years as its top com-
panies had established a global
footprint.
“India is not a powerhouse
because it is cheap but because it
is smart. That’s not the same with
China,” Oshri said. “We don’t see
Chinese vendors emerging to be
powerhouses.”
golia with the Indian government’s
help. Initially the staff there was
trained by Indian experts, but now
we are on our own,” he said.
In order to build their own skills
so that they can further develop
the IT sector in their country, a
growing number of Mongolian
youngsters are making way to
India – especially to Bangalore – to
pursue higher studies in the field.
With close to 400 IT companies,
Bangalore is often called the IT
capital of India, harbouring a very
cosmopolitan population.
“Mongolian students have long
been coming to India to pursue
higher studies. This year more
than 500 students came here for
that purpose. While some went to
Pune and Delhi, many have gone
to Bangalore to study information
technology,” Enkhbold told IANS.
 news bitS | Outsourcing

NHS under fire for outsourcing spend
UK’s National Health Services
(NHS) has been slammed for
spending around £1 million
(US$1.6m) on outsourcing to
consultants, according to the
Express.
Health chiefs at NHS
Manchester came under fire
from patients and MPs for the
spend, which went towards
experts advising them on how to
save cash, as the organisation is
facing an £18 million (US$29.3m)
debt. NHS Manchester recently
entered into a 10-month contract
with KPMG.
Laura Roberts, NHS
Manchester chief executive, told
the Express: “It’s important that
every opportunity to improve
quality and reduce inefficiency is
taken.”
Avaya completes
acquisition of Nortel
Enterprise Solutions
Avaya, a business communications
systems, company announced the
successful completion of its acquisition
of Nortel Enterprise Solutions (NES).
The addition of NES further enhances
Avaya’s strategic position in providing
business communications solutions and
services for enterprise customers. The
acquisition gives the company added
scale, resources and expertise to deliver
a portfolio of solutions and services
around the globe.
“The
completion of
this acquisition

Further growth
represents
another
major step in
Avaya’s evolution and growth in the
communications industry,” said Kevin

for IT outsourcing
A new poll has predicted that
more companies will start to use IT
outsourcing in the coming years.
Research carried out by services
company PricewaterhouseCoopers
(PwC) asked 514 outsourcing
providers in 50 countries about
how they expect the industry to
perform in the future.
The firms expect demand for IT
outsourcing is likely to grown in the
next 18 to 36 months, especially in
areas such as contact centres and
business process management,
with many already increasing
staff numbers and investing in
new services.
In addition, the study sug-
gested there is evidence that the
popularity of near-sourcing, or
using providers which are based
close to them, is likely to grow in
the future.
Dr Charles Aird, managing
director of PwC, said: “Growing
competition has transformed the
outsourcing industry into a global
race for market share.”
Last year’s Advisor and Busi-
ness/IT Service Provider Pulse
Survey, published by EquaTerra,
revealed that three-quarters of IT
outsourcing providers have seen
their new deal pipelines grow.
Growing competition
has transformed the
outsourcing industry
into a global race for
market share.”
J. Kennedy, president and CEO,
Avaya. “Avaya and Nortel Enterprise
Solutions share a common vision for
the future of business communications.
By combining our complementary
technology portfolios, deep industry
specific domain expertise, sales
channels and customer bases, the
new Avaya will redefine business
communications and help customers to
reduce costs, simplify operations and
increase their business agility.”
As a result of the acquisition, Avaya
will benefit from an expanded partner
ecosystem, a broader portfolio, an
enhanced customer base, and a
greater ability to compete globally. The
company also will extend relationships
with system integrators and service
providers who serve the enterprise
market.
Approximately 6,000 NES employees
have joined Avaya, including 25 top
managers. Joel Hackney, previously
president, Nortel Enterprise Solutions,
joins the Avaya Executive Committee
as senior vice president and president,
Avaya Government Solutions and Data.

Sony looks to Big Blue

Sony Corporation will outsource a part
of the human resources and accounting
operation services of Sony and certain of
its subsidiaries in Japan (collectively, Sony
Group in Japan) to IBM Japan.
In connection with this, Sony, IBM Japan
and Manpower Japan Co., Ltd are going to
set up a joint venture called Human Capital
Associates Co., Ltd.
The joint venture will be formed by
splitting a part of the human resources
service operations from Sony Human
Capital Corporation, which currently
undertakes human resources service,
business travel and insurance operations
mainly for Sony Group in Japan.
IBM Japan will hold a 60% stake in
the joint venture, with
Manpower Japan and
Sony each controlling a
20% stake.
Sony says it is undertaking steps
on a global scale to execute structural
transformation to achieve profitability
improvement and optimise business
processes. Sony made the decision to
outsource a part of its business processes
as a part of these initiatives. And through
this partnership with IBM Japan, Sony
intends to further improve the efficiency
of its operations and
accelerate its transformation
initiatives.
IBM Japan will provide its
human resources and accounting operation
services to Sony Group in Japan using the
new joint venture as its base in Japan and
IBM Global Delivery Centre in Dalian, China
as its base outside Japan.

January-February 2010 | Outsourcing | 11

Outsourcing | Insights

KPO is all about innovation

The first time I came across Knowl-
edge Process Outsourcing (KPO) was
soon after the Y2K. Initially offered
as a solution for improving client
processes it quickly grew to become
an arena for innovative thinking
support.
Initially I was a bit stunned to
think that an organisation who had
just set eyes on a client’s application
offering could possibly offer mean-
ingful suggestions. Furthermore, how
could outsourcers who had struggled
with rudimentary implementations
now be capable to be an innovation
outlet?
Reluctantly I released my hesita-
tion and carefully considered that
possibly a fresh impartial examina-
tion might possible help to bring new
life into old ways of doing business.
Lingering however was the deplor-
able and often ragged level of quality
delivered up the advent of 01/01/00.
This less than stellar performance
raised questions whether innovative
thinking and process optimisation
could successfully be offered and
promoted.
What we have come to realise,
from those early formative years, is
that successful KPO engagements
relied on mature knowledge develop-
ment (on the part of supplier and
buyer) and a formed bond in the en-
gagement relationship. Companies
that have attempted KPO without
these fundamental aspects have
experienced severe and damaging
disappointment.
KPO, heralded as the 3rd genera-
tion in outsource evolution, has now
seen a resurgence of interest. While
fueled by the strengthening of buyer/
supplier relations it has also been
the result of a reduced research and
innovation outlets. These strong
relationships and galvanised mu-
tual commitments have served as a
foundation for effective KPO.
Unlike service based outsourcing
activities like ITO or BPO, KPO com-
mands a decisive trust relationship.
Without trust and dedicated commit-
ment KPO remains ineffective and
extremely risky for global sourcing
buyers. In those early KPO years
suppliers were often reluctant to
offer improvement suggestions since
it would result in a reduction in
Suppliers have operating revenues.
often refrained from Today making right suggestions
offering innovation not only further crystallises the re-
since it has been lationship between buyer/suppliers
viewed that it is but it has become commonplace
something outside for benefit sharing elements to be
of the scope of the contained in operating contracts. For
contracted services. similar reasons suppliers have often

12 | Outsourcing | January-February 2010

 Insights | Outsourcing

refrained from offering innovation “KPO is not By Jerry E.

since it has been viewed that it is about size, Durant
something outside of the scope of it is about
the contracted services. Buyers would knowledge,
consistently refuse to accept innova- experience and
tion attempts as it appeared as a trust. This is
supplier driven encroachment on the great news for
operating contracts. Innovation and nations that
process improvement is important don’t have size
to buyers in order to reduce costs in numbers
and provide backend efficiency.
but are well
When benefit sharing is employed
educated,
experienced
it compensates outsourcers for their and known for
good work will insulating them their intellectual
from resulting revenues due to work abilities.”
reductions. Everyone appears to win
when solutions are provided and
mutual consideration is appropriate
applied.
There is however risk associated
with KPO. Decisions made about
reductions in effort may reflect well
operationally but at the same time
this may reduce constructive think-
ing and introduce a compromise
in controls that left unchecked can
endanger the client’s operation. In
order to reduce this real hazard com-
manding governance by the client/
buyer is essential. The qualification
of this oversight must be at the high-
est level possible both in terms of
authority and experience. Like the
KPO provider who utilises the best-
of-the-best from their operations,
the client must utilise the best of
staff resources to mitigate risk and to
insure sound KPO delivery. Addition-
ally, all KPO results require in depth
examination during interim delivery
and when presented in final form.
Because the depth of content can be
significant ongoing interaction is
viewed as essential.
KPO is more than just process
development, improvements and
innovation –  it can also involve
a variety of unbounded pursuits
ranging from general industrial
research to survey and analytic
projects. The erosion of institutional
research establishments has caused
companies to realise that they are
in need of these vital supporting
services. Research and related cra-
nial sciences are necessary in order
to reinvent business for promotion of KPO is not KPO services. Their inabilities may ket regions like India. However the
long-term organic growth. However without reflect weak/weakened viability, size of country and company will
the abandonment of these pillars of challenges inadequate delivery capabilities or have little effect those who offer
study are not without cost and at a as it relates both. Only companies who have KPO related services. KPO is not
time when the economy continues to to becoming had long standing track records, about size, it is about knowledge,
flounder, the KPO option has become established substantial stability and intellectual experience and trust. This is great
increasing attractive. and firmly depth within their ranks would be news for nations that don’t have size
Are all providers ready to take on creating a considered strong enough to take in numbers but are well educated,
the challenges and the opportunities service with on the challenges of KPO. experienced and known for their
presented by KPO? The answer is continued This means that KPO will be intellectual abilities.
undoubtedly NO. Most outsourcers growth offered by outsourcers with a long Whether these countries may be
aren’t ready to take on the delivery of potential. track record and from mature mar- located in Eastern Europe (such as

January-February 2010 | Outsourcing | 13

Outsourcing | Insights
Latest
estimates
suggest that
the global
KPO market is
about US$17
billion (2010),
with the Indian
share reflecting
a significant
portion at US$12
billion.
Russia or the Czech Republic) or are
companies located near universities
in Canada or Australia, the possibil-
ity of becoming a global KPO player
is there. Some have predicted that
academic research communities
in the UK, South Africa, Singapore,
Ireland and Israel may now emerge
to become the next India in the KPO
arena. Despite the buyers focus on
strong labour arbitrage KPO, with its
higher pricing, remains of interest.
The exhibit (right) shows where KPO
sits in the outsource food chain.
These economics not only reflect
the costs associated with skill level
of KPO professionals but also that
fees are driven in large part by
lower demand volume and higher
profit margin potential. This provide
addition support of earlier observa-
tions relative to the claim that KPO
continues to provides a source for
offsetting revenue reductions as a
direct result of process efficiency
improvements.
BUYERS BEWARE
However, one must always evaluate
the strength of the relationship
against the motivation of the service
provider. Suppliers who prize money
over relationship may insincerely
offer KPO services. Often these are
merely an extension of present
14 | Outsourcing | January-February 2010
Knowledge Based
High
Decision Support
Industry Specific Services
Margins
Transaction Based
TACTICAL
Multi-channel Contact Centre
Voice Based (Outbound)
Voice Based (Inbound)
Low
Low Volume
offerings, but when labeled as KPO
it allows the supplier to command
a higher price. Pricing and service
differentiation must remain under
ongoing scrutiny.
How can one control costs while
encouraging innovation that has
the potential to produce a saleable
outcome or business opportunity?
The short answer is that unlike BPO
or ITO, KPO will never become a
commodity buy. However, as a buyer
(or suppliers) we must place frame-
works around any research work to
control funding and outcomes.
Research and innovation is done
with business interests in mind. This
means that many of the traditional
project control mechanisms will be
utilised. These may include time
boxing, progress chronicles and
dynamic work plans would be gener-
STRATEGIC
ate real-time information that can be
acted upon responsively.
This allows both the buyer and
supplier to understand the research
dynamics that are taking place and
the threshold on progress. At the
same time we will able to measure
the value to cost commitment re-
lationship made thus far. Using
this information buyers can make
immediate informed decisions about
Low
capitalised and sunk costs relative to
the potential value produced by the
KPO engagement.
What kinds of things can KPO
offer beyond process improvements
and industrial research? Some of the
interesting and emerging types of
KPO engagement involve:
• Process Analysis/Improvement
• Investment Research
• Business Research
• Technical Research
• Animation & Design
• Creative Engineering (extension
of prescriptive ITO)
 Insights | Outsourcing

• Pharmaceuticals and Biotechnol- Enterprises Midmarket Organisations

ogy (US$3b or more revenue) (US$750m to US$3b revenue)
• Medical Services
• Writing and Content Develop-
ment Application outsourcing 9% 41% 10% 39% 8% 41% 18% 33%
• Market Research
• Data & Financial analytics IT infrastructure outsourcing 7% 37% 7% 49% 3% 41% 18% 38%
• Intellectual Property (IP) Re-
search
• Legal Process Services Finance and accounting outsourcing 17% 36% 5% 42% 9% 23% 14% 55%
• Network Management
• Knowledge Technologies Human resources outsourcing 12% 22% 5% 61% 9% 9% 23% 59%
• Training & Consultancy
Procurement outsourcing 5% 20% 5% 71% 2% 18% 18% 61%
Both buyers and suppliers often
have a difficult time trying to un-
derstand what constitutes a KPO Industry-specific outsourcing 5% 20% 7% 68% 3% 18% 18% 61%
engagement. The lack of a formed
definition provides the potential of Call centre outsourcing 5% 22% 7% 66% 3% 23% 18% 56%
producing inflated rates for services
sold as KPO when in fact they may
be the lower cost ITO or BPO related KPO/analytics 10% 15% 7% 68% 5% 18% 23% 55%
services. If we attempt to define KPO
100% 100%
as non-commodity innovation,
practiced by skilled and experience
professionals, and done in a green/
Will start outsourcing Likely to increase Likely to decrease No change
fresh fashion this may help to control
oversell.
Using this simple definition we
can separate innovation services
from extensions to existing offer-
ings. Expected Growth in Global BPO and KPO Markets (2003-2010)
Below ... Unlike
So where does KPO go from here service-based
and how strong is the resurgence? outsourcing
60
We are seeing intense interest in activities like
operational KPO surrounding busi- 50
ITO or BPO,
ness intelligence (BI) and enterprise 40 KPO commands
resource planning (ERP) activities. CAGR (KPO) = 45 % a decisive trust
These two sectors involve criti- Size (US$ billion) 30
relationship.
cal decision-making, operational 20
culturalisation and policy setting. It CAGR (BPO) = 26%
is more than following preconditions 10
in this areas, it involves a intimated 0
understanding of organisational FY 2003 FY 2010
behaviour and broad trends across
industrial disciplines. BPO KPO
However, interest isn’t business
and can only be viewed as the first Source: Evalueserve Analysis
step towards the potential sustained
emergence of a market offering. KPO
is not without challenges as it relates Often projections arise from revenue will remain a niche or become a
to becoming established and firmly estimations and this can be skewed sustained service. One must expect
creating a service with continued by the lack of precise qualification that there will be interest, whether
growth potential. of what represents a KPO revenue motivated by business desires
While almost all outsource service stream. or as a replacement for in-
types have had significant sustained Latest estimates suggest that the novation lost.
growth, KPO has been reserved and global KPO market is about US$17 bil- KPO is evolving
somewhat regressive during the pres- lion (2010) with India share reflecting and as additional
ent economic period. As illustrated a significant portion at US$12 billion. companies make use
KPOs growth is considerably slower What we know is this KPO, during of these services expect
than in other outsourcing service the last 6 years, has grown. Whether that more change will
areas. While ever present interest caused by a reclassification of services occur.
exists the adoption rate continues (to stimulate market interest) or the
to reflect a degree of hesitation. A result of true innovation based work
slight amount of KPO erosion has interest remains strong. What is less Jerry Durant serves as Chair-
occurred for mega KPO deals while certain is whether the demand can man Emeritus (founder) for
smaller commitments have shown be sustained and what might be next The International Institute
significant reductions in KPO due in the string of events that surround for Outsource Management,
in large part to current economic KPO offerings. a trade organisation dedicated
conditions. The question is will it Will there be a continued domi- to the assessment, development,
rebound? nance of Indian providers in KPO or and guidance of outsource service
It is always a guess when it comes will a new India emerge elsewhere? providers in the ITO, BPO, Call
to how big a market will become. Only time will tell whether KPO Centre and KPO domain areas.

January-February 2010 | Outsourcing | 15

Outsourcing | Cover Story

16 | Outsourcing | January-February 2010


Bob Chua:The man
behind pulsating Pulse
By Sritharan Vellasamy
In the business world, ideas are
at a dime a dozen. It doesn’t mean
much to have an idea unless you
have the guts and know-how to turn
that bright spark into realistic goals.
Just ask Bob Chua, the founder and
CEO of trailblazing Pulse Group Plc,
and he will tell you that a successful
entrepreneur must have fire in the
belly and vision in the mind.
With what started as a simple
business plan scribbled on a napkin
over a few drinks, Pulse Group has
grown leaps and bounds in mere
five years from a small start-up to a
leading Research Process Outsourcing
(RPO) company today, servicing the
market research industry globally.
Besides its operations hub in
Kuala Lumpur – Pulse, a publicly
quoted company on London’s PLUS
markets, currently operates regional
offices in New York, London, Sydney,
New Delhi and Singapore.
The brand
Pulse is indeed a catchy name for a
research outfit we’ve got to admit.
Chua explains: “The name ‘Pulse’
is a real simple description towards
what we do, what we stand for, and
what we hope to achieve – basically
it’s our DNA. As we deal within the
market research sphere, the ‘pulse’
of one’s community, target audience
or brand is really what brand own-
ers are seeking to understand and
capitalise on.
“Our brand name and brand
promise is a crucial asset to our
growth and success, and hence it
is key that we continue to ensure
that it epitomises everything about
bringing smart and efficient research
solutions to our clients. Our grand
scheme is to put a ‘Pulse’ in all sorts of
research, anywhere and everywhere
around the world.”
Before the set up of Pulse Group
in 2005 as a small start-up – Chua
cut his teeth working with the likes
of Nielsen and TNS around the globe,
innovating and accelerating their
efforts of leveraging technology to
deliver smarter, faster and more cost
efficient research to its clients.
Having graduated from business
school equipped with both a technol-
ogy and business major, he was a
prime target to such research giants
who were attempting to make sense
of the internet and leverage new
technologies.
Our brand After several years of working
around the world with the best and
name and brightest of the industry, he noticed
brand a great opportunity that presented
promise is itself based on Asia’s fascination,
adoption and consumption of the
a crucial internet.
asset to our He added: “Besides, the shift to-
wards new data collection means was
growth and moving away from the conventional
success.” ‘face to face’ or ‘telephone’ methods.
January-February 2010 | Outsourcing |
Cover Story | Outsourcing
Also, I saw a big opportunity for my
ideas as clients were driving agencies
to experiment with more progressive
means of engaging with the fast
evolving consumer.”
Potential & growth
Chua formed Pulse in May of 2005
as a start-up, and brought it public
on London’s PLUS market 33 months
later.
Obviously, when you grow at
this rapid pace, one of the biggest
challenges is “managing growth”.
He said: “We were always conscious
of how fast we were moving, and
how much we could push it to the
edge without parts of our business
starting to vibrate, and potentially
dropping off. Fortunately, we were
as aggressive as we were prudent,
and managed to step on the brakes
whenever something was on the
brink of imploding.
“It has been an exhilarating
journey so far, and I suspect will
continue to be, moving into the next
phase of our growth.”
What makes Pulse tick? “Well,
I think it’s a variety of factors that
have made us different,” responds
Chua, who was honoured with the
prestigious Ernst & Young Emerg-
ing Entrepreneur of the Year Award
in 2008. “One of it is first mover
advantage – the ability to identify
and move into the fastest growing
region, when others were focused
17
Outsourcing | Cover Story
on primarily the US and European
markets.
“Secondly, we are able to leverage
on technology, a strong brand, and
hyper growth model, allowing us
to scale very quickly. Thirdly, is the
people factor – we ensure attracting
and hiring A-players, who have all
contributed to our significant growth
of our organisation globally.
“Last but not least, our conscious
push for entrepreneurial culture in
the workplace is one of our strengths.
A culture of innovation, quality,
urgency, opportunity, and integrity
reverberates throughout our organi-
sation.”
The global market research seg-
ment is worth a staggering US$32
billion (2008), with 14% of the pie
represented by Asia Pacific alone.
If revenue from other forms of out-
sourcing such as KPO and offshoring
is considered, we may be looking at a
value of US$10 billion in this region.
Indeed, a huge market for companies
like Pulse to capitalise on.
In terms of geography, the out-
fit’s current clients are equally split
amongst the US, EU and Asia-Pacific
regions. From a vertical standpoint,
Pulse Group services other research
process outsourcing providers, media
agencies, as well as global market
research agencies. The firm also
powers research engagements for
a large proportion of Fortune 500
companies globally.
Closer to home
Chua is very proud of the fact that
Pulse Group is one of the select few
Malaysian companies who are mak-
ing waves at the global level.
He said: “We’re proud to have
built the first Malaysian research
services company, which is now
truly an international brand. We
studied various options when we
started the business, and Malaysia
with our MSC Malaysia benefits, as
well as the talent pool and business
structure that we could leverage on
represented a strong business case
for investing and headquartering
our business here.
“On a more selfish and patriotic
note, our founders are all Malaysian,
and we felt that it was extremely im-
portant to invest in our own country,
develop its talent, contribute back
in as many ways possible, and to
eventually build a global Malaysian
brand. I’m ecstatic that we managed
to achieve all of the above and once
again put Malaysia on the map.”
While the nation has some
problems with scalability to nab
low-value-high-volume jobs, KPO
business, such as the Pulse Group,
seems to be the ideal business model
to emulate. Strangely, there seems
to be dearth of quality local KPO
companies.
18 | Outsourcing | January-February 2010
Chua agrees to this point, saying:
“I believe this is somewhat true.
Malaysia’s initial objective within
MSC Malaysia SSO (shared services
outsourcing) for example was to
attract FDI by attracting the large
MNCs to the country, to invest in
global offshoring hubs and hence
creating jobs and knowledge transfer
and others.
“While this has been somewhat
successful, it has not necessarily
boosted local innovation, or DDI
(domestic direct investment) as much
as we’d liked. The push towards a
more lucrative KPO value-chain is a
good direction to head in, moving us
out of the lower-level commoditised
outsourcing tier where competition
amongst India, China and the Philip-
pines is relatively fierce.
“The move towards more special-
ised KPO expertise, however, will put
a further strain on talent, mainly in
specialty skills as opposed to volume.
This is indeed a main challenge, and
one that may take a while to address
should we not choose a few specific
areas where we think we can perform
well, and corner this niche quickly.”
It is obvious that quality of talent
comes from quality of the education
system. Chua strongly believes that
to start being competitive on a global
playing field, the country needs
to have an English medium first
of all, coupled with a strong push
towards technical fields of science
and maths.
He said an entrepreneurial ecosys-
tem that nurtures talent also helps
to develop a culture of innovation
and creativity, both very healthy
ingredients towards developing a
skilled workforce, as well students
that potentially develop leading edge
technology, patents, and potentially
the next wave of Googles and Face-
books. Chua added: “Countries like
China, India, Singapore and others
all have very solid education systems
producing not just the quality, but
quantity of knowledge workers that
are making them the technology
powerhouses of tomorrow.”
Nonetheless, the unassuming Sa-
bahan still believes that the country
has a very strong value proposition to
the world, both in terms of geographic
location, cost and technology advan-
tages. He said: “The MSC Malaysia
initiative and government push has
also continued to spearhead a higher
level of success, although there is still
a lot to be done.
“Malaysian SSO companies are
still relatively small, unspecialised,
and unknown. If we can successfully
move up the value-chain towards
KPO, grow solid brands, scalable
companies, capable CEOs, and a
steady flow of highly skilled talent
pool, I don’t see any reason why we
won’t be able to succeed.”
 Cover Story | Outsourcing

Taking notes:
CEO Speaks
Outsourcing magazine: How has the current economy
impacted the Pulse business?
Bob Chua: 2009 was indeed a very tough year for both the
advertising and research industries alike (both highly co-related).
The larger players suffered the most, consolidating and
restructuring under the heavy weight of their high cost structure,
and inability to maneuver through the rough patches as quickly
as the smaller guys.
Since most of our clients, and their end-clients were facing a
rough time, it was no surprise that our business was eventually
affected. The automotive and financial sector verticals were
hit badly, while our European and US business had a slight
impact. On the bright side however, Asia grew significantly, and
our aggressive client acquisition initiatives paid off in a big way.
Clients realise the strong value of online research, and the many
cost and time efficiencies that go with it.
We recently announced our financial results that coincided
with the worst of the recessions, and were happy to announce
healthy growth.

Any heroes in business you look up to?

I admire all of our local entrepreneurs who have successfully
built global Malaysian brands and great companies, such as
Tony Fernandes, Robert Kuok, Jimmy Choo, Francis Yeoh and
others.
“Having said that, I have always been inspired by my own
grandfather … a very successful entrepreneur in his day, and
someone that has been instrumental to my own success. A real
hero in my books!

Due to the nature of your global business, we reckon that

you spend lots of time traveling. How do you balance
your family life with the corporate one?
There’s no doubt that running a global business is indeed
challenging, and now that we’re a public company in the UK,
makes it all the more interesting. I have always however been
very balanced, grounded, and pragmatic about keeping a
healthy and balanced lifestyle. I prioritise time very carefully,
allowing me to ‘hyperfocus’ on my business, as well as my
family, friends, and personal interests. It’s extremely important to
do all of them well, and I always strive to do the best as a CEO,
entrepreneur, husband and father.

We understand that you are an avid tennis player – what

lessons have you learned on the court that can be
applied to business?
I play quite a lot of sports in fact – tennis, golf, sailing and
others. And I also love more strategic games such as chess – all
of which contribute towards my characteristics in business.
Similar to tennis, I think succeeding in business is all about
control and mental strength – knowing when to push hard,
focusing on your opponent’s weaknesses, and having strong
determination and stamina to end up a winner.
Golf is more a perfectionist and focused game, aiming for a
very challenging end-result, with tremendous obstacles along
the way. Picking the best clubs and managing the course is not
dissimilar to leveraging the best minds in your organisation, and
understanding your business landscape well, without taking
unnecessary risks.
The sailing elements are about pushing myself to extremes,
and driving oneself to both mental and physical limits. It is
important to be fearless at times, and to have a strong belief in
yourself and your abilities.
Lastly, chess is more of a strategic game, calculating all of
the probabilities and possibilities of your opponents next moves,
while simulating winning outcomes. All in all, it is important to be
gentlemanly, competitive, have good sportsmanship, and play
the game well.

January-February 2010 | Outsourcing | 19

Outsourcing | Analysis

Creating
an engaged
workforce
By Aditya Bhalla
Review the statements by the lead-
ership teams at two comparable
large MNC organisations. If your
staff had to decide which organisa-
tion to work for where would they
invest the next few years of their
career?
Leadership views
at Company A:
“A big company such as ours is based
on certain established systems, policies
and procedures. If we train all our staff
on process improvement concepts and
they start questioning the way work is
done then we will have chaos reigning
everywhere. Employees will tear down
the fabric of our organisation and we
will cease to exist.”
Leadership views
at Company B:
“The job of our employees is to im-
prove the process of providing quality
Bad for the boat products and services to our customers.
… Disengaged Team supervisors have to spend 90%
staff are like the of their time reviewing the processes
hidden part of and improving it on an ongoing basis
an iceberg that and only 10% of their time performing
will eventually the job and vice versa for the team
sink the members.
organisation “We get concerned when the staff
like the Titanic. stops reporting problems in their work
area. It can only mean two things.
One is, either our process has reached
a higher level of process maturity and

20 | Outsourcing | January-February 2010

 Analysis | Outsourcing

Creating an
engaged
workforce
will require a
sustained and
integrated
effort in multiple
dimensions.

it is time to raise the performance
benchmarks, or the other is people are
hiding problems from management.”
Experienced managers would
have encountered the above state-
ments in one form or the other in
their professional lifetime and would
not be surprised to discover which of
the two organisations will have more
engaged staff consumed by the all
serving passion to deliver superior
customer service.
The recent economic slowdown
(surprisingly not all Country manag-
ers agree with the use of recession
to describe their economy) has
provided organisations with yet
another opportunity to review and
update many existing practices to
emerge stronger once the resurgence
happens.
One of the practices relates to
keeping employees emotionally
engaged with the organisation and
their work. Disengaged staff are like
the hidden part of an iceberg that
will eventually sink the organisation
like the Titanic. It is not a question of
“whether” but by “when”.
Mindset before THE SIGNS
Toolset … Staff It is not too difficult to spot the signs
must develop and symptoms of a disengaged
stronger workforce.
skills to
systematically 1. Management by objectives
think through a. Management reviews perfor-
the problems mance by numbers reported on
rather than dashboards.
mechanically b. As a culture, it is not considered
applying tools important to review the means used
of higher order to achieve the numbers as long as
complexity. the numbers are met.
c. It is also not uncommon to find
senior management lacking the
hands-on perspective of how work
gets done at the staff level.
2. Extreme phobia of failure
a. Disengaged staff are under ex-
treme pressure to meet performance
norms
b. People cringe at the mention of
the word “problem” to describe any
situation
c. Given the management’s lack of
insight into the operational aspect,
balanced scorecard targets are set to
ensure that no one fails or failures
are attributed to factors beyond
reasonable control.
d. Senior management is frustrated
to find all dashboard numbers meet-
ing or exceeding targets and yet
business not growing at the desired
pace or customers still unhappy
with the company.
3. Disconnected silos and turf
wars
a. The creative energies of staff are
spent fighting for a bigger share of
the existing pie (budgets) rather
than expanding the size of the pie
(revenue).
4. Creating waste to fight waste
a. Since management lacks the
insights on the operational aspects
they end up under-leveraging their
resources.
b. One common scenario is the
creation of specialised teams/
departments or even outsourced
companies engaged in work that
should not exist in the first place.
c. For example financial special-
ists performing manual reconcilia-
tion of financial transaction errors
as a regular activity rather than

January-February 2010 | Outsourcing | 21

Outsourcing | AnAlysis
studying the upstream process
to fix the source of origination of
those errors.
EnGAGED WorkforCE
To THE forE
Creating an engaged workforce will
require a sustained and integrated
effort in multiple dimensions (refer
image, right).
1. Strategic Growth Framework
a. This part of the triad is where
most of the energies are currently
spent by management.
b. what needs focus is aligning the
other two dimensions to the strategic
growth objectives.
2. Operational Excellence Frame-
work
a. This part of the triad also has
reasonable focus from manage-
ment.
b. Some glitches that need to be
ironed out are
i. Mindset before Toolset: Staff
to develop stronger skills to system-
atically think through the problems
rather than mechanically applying
tools of higher order complexity.
22 | Outsourcing | January-February 2010
ii. Means More important Than
the Results: Reviewing the process
of arriving at the improved perfor-
mance to ensure sustainability of
results.
3. HR Maturity Framework
a. Currently this seems to be the
weakest part of the triad and not
fully integrated with the other two
dimensions.
b. Defining the framework or bor-
rowing practices from established
frameworks like PCMM (People
Capability Maturity Model) will
help create the strong foundation
for people development. Many
organisations have taken steps in
this direction.
c. The bigger gap however remains in
creating synergies with the other two
legs of the triad – strategic growth
and operational excellence.
ConClusion
Those who fail to learn from history
are condemned to repeat it. while
economists are trying to discover the
missed lessons from the past cyclical
economic slowdowns it is also an
opportunity for senior management
The recent to review and update the current
economic practices.
slowdown Tapping into the underlying
has provided potential of human resources is one
organisations exciting journey waiting to happen.
with yet another The question is will we get it right
opportunity this time?
to review
and update
many existing Aditya Bhalla is Practice Manager with
practices QAI Innovation Practice consulting
to emerge clients on product and process design.
stronger once He is also the President of TRIZ As-
the resurgence sociation of Asia and member of ASQ,
happens. Altshuller Institute USA. He can be
contacted at adityabhalla@yahoo.com
 UP
PERISCOPE

|

Outsourcing


A
new
year
ray

of
hope By
Dr
Alan


G.
Downe

ECONOMIC recovery. The phrase to demand shorter term contracts,

sounds pretty darn nice, doesn’t currency exchange protection and
it? And after the horrible year that the flexibility to dissolve relation-
just ended, there’s probably not an ships quickly.
outsourcing person around who Watch for lots of merger activ-
hasn’t included it as an item on their ity as Outsource Service Providers
New Year’s wish-list. (OSPs) try to ramp up for larger scale
Well, folks, there is a ray of hope projects and a move up the value
on the horizon. Some early signals chain. Belt-tightening pressures over
are flickering to suggest that the the last two years have undoubtedly
current downturn – the longest damaged relationships between
economic crisis in the United States OSPs and even their best clients,
since the Great Depression and a so current-year re-negotiations will
two-year monkey on the backs of have to be done tenderly, with an
global markets – may finally be increased focus on rebuilding priori-
drawing to a fragile close. ties for collaboration and value.
At this point, we seem to have Crapps
…
‘It
will
be
 recovery at best, and non-existent This last trend, according to
avoided the feared collapse of global important
in
2010
 in many global and market sec- Crapps, is not necessarily a bad
financial systems and, in the last to
find
partners
that
 tors. The news from the US of 10% thing. More than ever before, he
quarter of 2009, most major econo- provide
extra
value
 employment simply does not reflect predicts, companies will be on the
mies moved from contraction to and
innovative
 the reality of the situation, where in look-out for “partners that can pro-
expansion for the first time in over a services.’ fact more than 20% of the workforce vide extra value, innovative services
year. December job growth statistics are without work, or are working for that are outside the traditional, and
from the US have been encourag- subsistence-level compensation and companies with visionary leader-
ing. There have been optimistic simply not recovering.” ship”.
statements, in advance of London’s And even if, or when, the effects He added: “2010 and beyond
upcoming IBDG European IT Direc- of an improved economic forecast will force all of us to re-think the
tors Annual Strategy Meeting, that begin to impact on outsourcing leadership of companies, and break
infotech sectors are limping back to business, players will find a lot has out of the traditional thinking that
normalcy. And the International changed. Continuing economic un- led to our current situation. I believe
Association of Outsourcing Profes- certainty will motivate client firms that companies must link with BPO
sionals (IAOP) just predicted that a
flurry of delayed outsourcing deals continued
on
pg27
is expected to get the green light and
start moving quickly through sourc-
ing and RFP stages early in 2010.
A high dose of caution is still in
order, though. As promisingly as we
all want to interpret these indica-
tors, the economy remains shaky.
According to Dr. Heidi Shierholz
of the Economic Policy Institute in
Washington DC there is “finally
some healing in the labour market,
as indicated by both the increase
in hours and mostly steady payroll
employment”.
He said: “Unemployment, how-
ever, is expected to continue on an
upward trend until we start adding
jobs, in a healthy way, which will
likely not happen until next spring
or summer.”
Burton Crapps is Managing Di-
rector of the Atlanta-based Purlieu
Solutions Group and has spent his
last 20 years working in just about
every global software services and
BPO niche there is. He agrees with Dr.
Shierholz: “From a global viewpoint,
indeed, Q4/2009 has been fragile in

23
January‐February
2010

|

Outsourcing


|



pg23n27-#16.indd 23 1/28/10 2:27:42 PM

Outsourcing | Feature

By Atul
Vashistha

Which way? … Services globalisation is a jour-

How organisations
manage risk can
determine the
success or failure of
their engagements.
ney and not just a destination; it
requires management of the entire
lifecycle – from the knowledge phase
(understanding the true services
globalisation opportunity) to the
planning phase (developing a ser-
vices globalisation roadmap) and
on to the sourcing and management
phases.
The third secret of successful glob-
alisers is: Adopt a lifecycle approach.
Successful globalisers understand
that this requires management of
the entire lifecycle and due diligence
from the first step of understand-
ing where services globalisation fits
within the business to managing
offshore supplier relationships.
Many services globalisation initia-
tives fail due to lack of understanding
of services globalisation, picking
wrong processes and the drop-off of
oversight once a supplier is selected
and the process is transferred off-
shore. In reality, the sourcing step is
only the third in a crucial four-step
process that involves knowledge,
planning, sourcing and managing.

In order to successfully engage the

lifecycle process, an organisation
must:
1. Share a belief that planning and
lifecycle management is important
to long-term success.
2. Believe that a rigorous process,
models, and data should drive
decision-making.

Adopting
3. Develop a long-term roadmap
and governance procedures to ensure
adherence to the plan.

The first phase of the services

lifecycle approach
globalisation lifecycle is knowledge.
An organisation must understand
why it is globalising services; under-
stand the different supply markets;
understand the different services

to globalisation
globalisation models (third-party,
captive centre, BOT, joint venture);
and understand the risks associated
with services globalisation. It’s been
said before that ignorance is not a

journey
This is the third in a series
of excerpts from the newly
published book by Atul Vashistha
– ‘Globalisation Wisdom: The Seven
Secrets of Great Globalisers.’
justifiable excuse and that knowledge
is power. In services globalisation,
those adages are law.
The kind of knowledge an or-
ganisation may gain in this phase
of the services globalisation lifecycle
concerns supplier locations gen-
erally: What are the competitive
advantages of each location? What

24 | Outsourcing | January-February 2010


are the centres of excel-
lence? What are the
risks? Sourcing to India
is no longer the across-
the-board best decision.
The Philippines, for
example, may be the
optimal location for call
centre operations, while
Russia may be optimal
for high-level actuarial
analysis.
An effective understand-
ing of supplier locations will
involve knowledge of exog-
enous factors, catalyst factors
and business environments. How
organisations manage risk can
determine the success or failure of
their engagements.
For example, Steve Bandrowczak,
former Lenovo CIO, says that the
lifecycle approach is particularly
important in that company because
of the importance of reducing risk.
“We’ve adopted the lifecycle ap-
proach because we’re trying to
radically reduce our risk. We focus a
lot on strategy, on being in the right
markets for us, and then making
sure that there’s good governance
to minimise risk.”
But an organisation does not
have to embark on the knowledge-
gaining process alone (indeed, if an
organisation tried it would spend
years trying to get to the manage
phase of the lifecycle). Instead,
successful globalisers enlist estab-
lished, experienced, knowledgeable
third-party advisors to help educate
them about supply locations and
suppliers, offshore models and the
risks associated with poorly planned
globalisation initiatives.
The second phase of the services
globalisation lifecycle is planning
– developing a services globalisation
roadmap. An organisation must
determine if it is ready for services
globalisation then determine if the
process it plans to globalise is ready
for globalisation. The organisation
must also determine when each pro-
cess will go global and understand,
articulate and account for the total
cost of offshoring.
The goal of the planning phase
is to answer the questions: Why will
the organisation globalise? Should
it globalise? What will it globalise?
When will it globalise? In answering
those questions, an organisation
Feature | Outsourcing
Take
a pick …
an effective
understanding
of supplier
locations
will involve
knowledge
of exogenous creates a blueprint for its services maturity of the organisation and
factors, globalisation strategy. The key tasks sponsorship in the organisation.”
catalyst factors involved in accomplishing those Sometimes even when an
and business goals are: organisation is ready for services
environments. • Assessing the global readiness globalisation, its processes are not.
of current processes within the The third step in the planning phase
portfolio – a portfolio assessment and analysis
• Conducting a base-case cost – involves determining the readiness
analysis of the processes an organisation
• Defining outsourcing and glo- wants to offshore.
balisation objectives When deciding if a particular
• Conducting a strategic evalua- process is suitable for globalisation,
tion of offshoring options an organisation must consider four
• Identifying candidate suppliers factors: scale, domain knowledge,
and locations maturity and complexity.
• Defining a timeframe Rolling out globalisation initia-
tives in waves is critical, according
First, the company must analyse to Ron Kifer, Group VP and CIO of
It’s been its services globalisation maturity. Applied Materials. “The various
said Ron Kifer at Applied Materials ex- components that have the potential
before that plains: “The lifecycle is on various for globalisation are at varying
ignorance axes. One axis is based on the idea levels of maturity and they take
is not a of globalising the simple functions varying levels of time in order to
justifiable first, the more complex ones next, put into place. In some areas it takes
excuse
and that etc. Another axis is doing things more time, for example, to convince
knowledge that we know how to do – in this the larger organisation to globalise,”
is power. particular case, IT, first. BPO might he explains.
In services be easier to do, but we don’t know Bandrowczak, adds that it’s not
globalisation, how to do that as an organisation, a one-shot deal. “It’s not just one
those so we are getting there next. What wave. Or one wave of waves. As
adages are comes first, what comes next is soon as you’re done with the first
law.” based on maturity of the processes, wave, you start all over again.”
January-February 2010 | Outsourcing | 25
Outsourcing | Feature
The third phase of the services
globalisation lifecycle is sourcing.
An organisation must decide the
services globalisation model that
will work best given its services
globalisation maturity, the matu-
rity of its prospective suppliers and
the maturity of the process it is
globalising. The organisation must
consider the implications of sourcing
to third-party service providers as
well as the implications of building
a captive centre.
The goals of the sourcing phase
are also to select a vendor and nego-
tiate a contract that specifies rules of
engagement. The key tasks involved
in accomplishing the source phase
goals are:
• Creating requirements docu-
ments
• Conducting a solutioning process
with prospective suppliers
• Enabling suppliers to better
understand the clients business
• Reviewing and evaluating each
supplier’s solution and proposal
• Conducting due diligence and
supporting reverse due dili-
gence
• Negotiating a contract with the
right terms and conditions
For successful globalisers, the
sourcing phase is not just about
selecting a supplier. “For FedEx, it’s
about flexible global resourcing
26 | Outsourcing | January-February 2010
– how you integrate flexible capacity
from the supply-side or the offshore
operations into your organisation,”
says FedEx’s CIO, Rob Carter.
The fourth phase of the services
globalisation lifecycle is manage-
ment. This is a phase that is ap-
plicable to not just post-contract but
plays a role in strategy and sourcing
too. While each lifecycle stage is
critical, most services globalisation
engagements fail not because they
were improperly sourced or planned
but because they were improperly
managed.
The goals of the management
phase include:
1) providing ongoing contract
governance;
2) providing ongoing programme
management;
3) ensuring that performance is in
line with quality expectations;
and
4) realising the strategy and pro-
jected benefits. The key tasks
involved in accomplishing those
goals are:
a) Determining the performance
impact of the transition
b) Defining and implementing
processes for issue and risk man-
agement
c) Effecting transition
d) Managing performance, rela-
tionships, contracts, resources
and finances
Decide wisely 3) Conducting a health check
… Sometimes
even when an Successful globalisers also realise
organisation that the knowledge, plan, manage
is ready for and source phases of the lifecycle
services are not discrete, one-off projects.
globalisation, As Kifer explains: “One important
its processes aspect of the lifecycle approach to
are not. globalisation is the idea that the
core competency of today is the
contextual activity of tomorrow.
“So we’re constantly evaluating
our internal organisation and decid-
ing over time what is still core, what is
still value-added, what still provides
a competitive differentiation and re-
focus our resources on that and move
those things that have evolved and
matured into contextual activities
to our managed services partners.
And we know that’s a continual,
evolving process, and you have to
have a model that recognises that
and accommodates for it.”
Atul Vashistha is Chairman of Neo
Advisory (formerly neoIT), a leading
An management consultancy since 1999,
organisation
must focused on independent, objective and
understand actionable advice to enterprises that
the risks seek to transform their organisations
associated by capitalising on services globalisation.
with His latest venture is BestOutsourcing-
services Jobs.com, an online job portal focused
globalisation on outsourcing careers. He can be
too.” reached at atul@vashistha.com.

from pg23
partners that are able to see and
sustain beyond the ordinary and
lead into new market areas.”
And, in fact, there’s a crop of BPO
firms that’s positioning itself to do
exactly that. Brazilian-based CPM
Braxis is one of them. The result of
a 2007 merger between CPM and
Braxis, two of Brazil’s largest IT
services companies, it has averaged
a 25% annual growth rate since the
merger, and has leapfrogged into
33rd place on the FinTech 100 rank-
ing of technology service leaders in
the financial vertical and 28th place
on IAOP’s Global Outsourcing 100.
Not bad performance for reces-
sionary times. Its Q4/2009 take-over
of Dimensi, a big mover and shaker
in the Brazilian enterprise perfor-
mance innovation and business
intelligence spheres, is only bound to
strengthen CPM Braxis’s capacity to
offer full-service one-stop shopping
for BPO and ITO services.
Softtek and Qualfon are two
Mexican companies that bear
watching, the former in application-
related services, IT infrastructure and
software products, and the latter in
contact centre outsourcing.
Both have flown mostly under the
radar through the dismal economic
times, quietly building a presence
primarily in South and Central
America. They’re now poised to
expand an international client base
that has already included heavy-
weights like Citibank, HSBC, HP,
BMW and GM.
Another hot corporate prospect
Joining hands … for the early-recovery period is An-
Watch for lots of nex Global Services. Headquartered
merger activity as in Celebration, Florida – just outside
Outsource Service Orlando – with a growing footprint
Providers try to in Southeast Asia, the Middle East
ramp up for larger and both North and South America.
scale projects and a This new-comer is intriguing not
move up the value only because of its wide range of tra-
chain. ditional outsource service offerings
but also because of its innovative
approach to content management
as a well-rounded provision for each
individual client. They have recently
landed some huge global companies
out of the gate, and are expected to
make a major splash in the market
throughout Q1-Q2/2010.
Notice anything about these
OSPs? All four are aggressively
marketing their placement in new
nearshore locations in the southerly
Americas, maximising geographic
advantages in places like Monterrey
(Mexico), Buenos Aires (Argentina),
Heredia (Costa Rica), São Paulo and
Rio de Janeiro (Brazil) … even in
Celebration, Florida.
This, in fact, signals a geographic
shift about which many observ-
ers were already wound up even
before the economy went for a slide.
Destinations-of-choice during the
post-recession recovery are con-
tinuing to shift away from 1990s
hotspots in India. It only makes
sense. During a period of fragile
uncertainty, companies are more
likely to want to keep outsourced
operations a little closer to home.
Indian giants Tata Consultancy
Services (TCS), Infosys and Wipro
January-February 2010 | Outsourcing |
Up Periscope | Outsourcing
realised this awhile ago and have
not only established themselves in
emerging outsourcing locations in
Latin America and Eastern Europe,
but have emphasised hiring locals
to polish their image in economies
reeling from job losses.
“I do in fact believe that many US
firms are looking to South America
for outsourcing as opposed to India,”
said Burton Crapps. “Regrettably,
we all realise that the quality of
the India BPO services market has
declined in recent years, and the
economic downturn has alerted
many US companies to look for al-
ternatives. New players like Qualfon
and Annex may find that a much
friendlier USA market is ready to
embrace a nearshoring model.”
He added: “I believe that even
these companies however, must
focus on providing additional and
innovative BPO services to be able to
gain the larger market-share as the
pull-back on outsourcing of the past
six to nine months has had more to
do with value than location.”
More flexible business models,
a greater focus on innovation, up-
and-coming trendsetters and fresh
outsourcing destinations – even in
an environment of fragile recovery,
2010 could be a pretty exciting
ride.
Dr Alan G. Downe is a Senior Lecturer
at Malaysia’s Universiti Teknologi PET-
RONAS. He specialises in BPO and call
centre strategy and operations.
27
Outsourcing | Insights

By Dr Wendell Jones
Global competition the past
two decades has stimulated many
companies worldwide to redesign
and reengineer internal processes,
outsource back-office functions, and
create alliances and other coopera-
tive relationships.
When internal tasks are slow and
unresponsive, firms usually turn to
reengineering; when the challenge
is to reduce costs, outsourcing is
the typical response, and when
world-class skills and innovation
are required, companies form al-
liances and other collaborative
relationships.
All three strategies are intended
to complement existing capabilities,
compensate for shortages of skills
and capabilities, and increase com-
petiveness in the global marketplace.
But success is difficult, as alliances,
outsourcing and reengineering
efforts require transformational
leaders who can navigate the shark-
filled waters of internal politics and
motivate people to embrace and
implement change.
This article briefly discusses three
rules of thumb to guide the decisions
and actions of leaders responsible for
managing organisational change.
The first is to put efforts to under-

Rules of thumb
stand the organisation and people
involved. This seems so obvious that
it should be common sense, yet it is
often violated. Successful change

for leading change

begins with diagnosing the real
problems and not just the symptoms.
But in reality most organisations do
not like to be diagnosed.
Not only does a major change
programme have high visibility and
other characteristics of a good target
to shoot at, various stakeholder Cultural differences are mag- wings to strike when the change
groups tend to avoid being associ- nified by those not mentally or leader is least expecting it.
ated with a new change initiative. emotionally committed to the new Therefore, the second rule is to
It is therefore important for ways of doing business. Yet, even stay alive. Staying alive does not
management to continuously light poorly conceived experiments can mean that managers avoid taking a
fires with internal stakeholders, for succeed when people at all levels stand or assuming some risks or that
as soon as the change effort turns take ownership and different stake- the change leaders remain aloof and
its back, other forces will push the holder groups are brought together indifferent to the legitimate concerns
organisation back toward the status to support one another. Opponents of people. However, it does caution
quo. of change are often waiting in the that risks should be taken as part

28 | Outsourcing | January-February 2010

 Insights | Outsourcing

Effective change leaders often

find opportunities in dilemmas,
and they usually greet absurdity
with laughter, not ridicule.

Be wary … ful strategy and set of organisational
opponents of goals that are appropriately timed,
change are targeted and understood. Risks taken
often waiting in informed circumstances usually
in the wings keep everyone alive.
to strike when Besides, the managers must stay
the change in touch with the reasons why the
leader is least changes are necessary. Effective
expecting it. change leaders often find opportuni-
ties in dilemmas, and they usually
greet absurdity with laughter, not
ridicule. They help everyone see
through a lens that shows clearly
why change is in the organisation’s
best interests.
The third rule is to avoid fighting
uphill battles. In its broadest sense,
this rule calls for approaches that
are participative rather than auto-
cratic and open rather than closed,
and it emphasizes solutions that
build upon traditional strengths and
values. This rule presents a number
of corollary implications that could
affect the choices management
makes. These corollaries include:
(1) building resources and nurturing
allies;
(2) avoiding any action alone that
could be accomplished more
certainly and easily by a team;
(3) never arguing what can’t be
fairly won;
(4) making the critical value deci-
sions before opponents make
them;
(5) keeping an eye on potential
destructive forces; and
(6) remaining especially alert for the
constructive forces of potential
allies.
Finally, because people have an
innate capacity for resentment and
resistance, as well as for joy and
support, management must help
everyone maintain a sense of direc-
tion and optimism about the future.
To give joy, one must feel joy.
Dr Wendell Jones is a Professor of Man-
agement and a former senior executive
at Compaq, NASDAQ, and McDonnell
Douglas. He is recognised as a leading
outsourcing practitioner, advisor and
thought leader. He is the co-author of
“Outsourcing Information Technology
Systems & Services” – recognised as
one of the best outsourcing references.
The book was recently released in a
Chinese edition.

of a purposeful set of goals that are Tread carefully

appropriately timed, targeted and … A change
supported by key stakeholders. leader must
Staying alive is also more than avoid being
mere survival. It also means that trapped in
managers avoid being trapped in the hidden
the hidden agendas of other people. agendas of
It means going with the flow, and other people.
when necessary, swimming against Cultural
the tide. It means knowing the differences
expectations and needs of the em- are magnified
ployees, customers and others and by those not
attempting to see the present and mentally or
future through the lenses of these emotionally
various stakeholder groups. committed
This rule also counsels the cham- to the new
pions of change against self-sacrifice ways of doing
on behalf of a cause that could business.
become their last. Therefore, risks
should be taken as part of a purpose-

January-February 2010 | Outsourcing | 29

Outsourcing | Feature
‘Socialising’ with research
By Suheil Patel
Benjamin Franklin said, “Be civil
to all; sociable to many; familiar
with few; friend to one; enemy to
none.” Maybe Benjamin Franklin
did foresee how social media would
operate in the 21st century. The rate
at which social media has evolved
and spread its reach has left ev-
eryone, right from multinational
companies, educational institutes to
media celebrities and the common
man, looking to leverage the most
out of it.
Traffic to Facebook and Twitter
in the last one year has jumped by
200% and 1500% respectively. Time
spent on social networking websites
has also increased over the past one
year by 67%. Social media is an
interface where data in a raw (or
crude) form is exchanged amongst
consumers. This is like a direct (and
30 | Outsourcing | January-February 2010
frank) feedback about a product,
service, individual, company, des-
tination, etc.
Impact on businesses
Why has social media become a
big frenzy and how does it help
consumers as well as companies?
As consumers, we have a tendency
to ask our friends and family for
opinions and preferences before
purchasing a product/service. With
the advent of social media, consum-
ers now have a platform with a huge
audience base to receive feedback
and opinions. Social media not only
offers a platform for consumers to
receive and give feedback but it also
allows companies to interact with
their consumers.
From FMCG companies and
telecom operators to retailers and
automobile companies – everyone
wants to know “What do consumers
Points to want?” According to a research by
ponder … Nielsen, time spent on social net-
Why has working websites out of the total time
social media spent on the internet has increased
become a big from 6% in August 2008 to 17% in
frenzy and how August 2009. ( see graphic)
does it help Companies around the world
consumers are increasing their spend on online
as well as advertising in order to reach out to
companies? a wider audience in a short span
of time.
leveraging on social
media
Market research industry has also
realised the potential of social media.
Research through social media helps
market research companies define
their research methodology based on
the geography that they are tracking.
For example, research through social
networking websites will receive huge
impetus for geographies in Latin
America like Brazil, Argentina, and
 feature | Outsourcing

Exhibit: Online advertising spend

812%

percent change
364%

184% 178%
143% 139% 128% 98% 93% 89% 75%
40% 56% 55%
8% 30% 13%
-11% -8% -26% -29% -10% -1% 8% -47% -12%
t

el

ia
B

e
ive

es

es

ns

cs

es
en

od
ar
alt
B2

ed
av

ni
vic

vic

vic
tio
ot

ftw
m

Go
He

tro
Tr

er

er

er
ica
m
in

So
eb

ec
lS

ds
er
to
rta

un
ic

um

El
Au

cia
W

an
bl
te

&
Pu
an
En

s
om

ds
n

re
Fin

Co

oo
wa
lec

il g
rd
Te

ta
Ha

Re
INDUSTRY

Y-o-Y percent growth on social networking site Y-o-Y percent growth on all sites
Source: Nielsen
research

Chile where number of online users

(social networking website users)
are more.
Further, market research industry
has evolved from the traditional (sur-
veys, interviews, panel discussions)
to out-of-the-box (social media,
consumer tracking tools) research
techniques. The US$32.5 billion
industry has seen a temporary blip
in terms of revenues; however the
industry is looking at innovative
research techniques and operational
models to counter recessionary pres-
sures. Global market research giants
including AC Nielsen, TNS, Synovate
are looking to adopt innovation in
their research techniques and online
media technology and tools.
Research companies have intro- Research past one year. Research agencies sharing of innovative ideas.
duced tools and technology that are through now have dedicated employees For a market research company,
constantly tracking, evaluating and social media managing and tracking social me- tracking social networking websites
monitoring comments from social helps market dia websites. New job profiles like has become an integral part of the
network websites. These tools (e.g. research Community Manager, Director of research plan. It gives a research
Nielsen’s BUZZMETRICS) not only companies Online Media, Interactive Account company a colossal audience to
monitor websites but also come define their Director, Emerging Media Manager track and constantly receive feed-
with customisable dashboard and research have been introduced. back and insights about products
research tools that facilitate in collec- methodology and services.
tion of data and streamline the data based on the Next stage Says Sunil Mirani, “Traditional
for analysis and decision-making. geography The utility of social media in busi- research techniques entail asking
According to Sunil Mirani, CEO, that they are ness is not limited to a manual or questions to a target audience.
Ugam Solutions, “With the rise in tracking. a set of guidelines. Companies are Whereas research through social
the number of users on social media using social media as part of their media is about drawing inferences/
websites, small companies tracking networking and marketing plan. insights from various consumer
feedbacks and consumer preferences conversations/interactions taking
have mushroomed over the past two • Zappos used Twitter as its cus- place in the digital world at large.”
years. Large MR agencies were slow tomer service platform in addition Going forward, social media
to react, but addressed the scenario “Companies to phone line communication is set to become a conventional
by acquiring these small tracking around the and email. means of research. While it would
companies.” world are • Walmart constantly implements not be a substitute to traditional
Market research companies using
increasing platforms for its product reviews research techniques, it may outgrow
technology are filtering raw data
their spend • “My Starbucks Idea” programme or eclipse some of the traditional
floating over the web and delivering
on online introduced by Starbucks encour- research techniques. At the end of
advertising
actionable insights that are helping in order to ages its customers to submit the day, you need to be where your
clients to get random, real-time reach out their ideas for new products and customers are!
updates and consumer responses to a wider services.
about their product/services. audience • Best Buy uses a private social
Smaller companies (with 10-15 in a short media network for internal com- Suheil Patel is an analyst at ValueNotes,
employees) tracking social media span of munications with its employees to a leading research provider focused on
websites have also grown over the time.” track employee satisfaction and the outsourcing industry.

January-February 2010 | Outsourcing | 31

Outsourcing | study
Challenging times
for data centres
Symantec Corp recently released
the findings of its 2008 State of the
Data Centre report. The second
annual study found that data centre
managers are caught between two
conflicting goals – more demanding
user expectations and higher levels
of performance, yet reducing costs
remain the primary objective for the
data centre.
The report also found that data
centre staffing remains problematic,
servers and storage continue to be
underutilised and disaster recovery
plans are out of date. Finally, the
respondents indicated that while
they are pursuing green data centre
initiatives, they are doing so primar-
ily based on cost benefits.
“This research confirms what
we are seeing in the field,” said Rob
Soderbery, senior vice president of
Symantec’s Storage and Availability
Management Group. “Attention
has turned to initiatives that will
drive immediate cost reduction,
rather than longer term ROI driven
programmes. Storage has been
a primary focus of these initia-
tives as the demand for capacity
continues to rise, despite economic
challenges.”
Of those surveyed, 75% reported
user expectations are rising gradu-
ally or rapidly. Furthermore, 60%
of the respondents saw meeting
the service levels demanded by the
organization to be more difficult or
much more difficult to meet. Only
10% saw service levels to be easier
to meet.
Nonetheless, when asked to
identify their key objectives for the
IT outsourcing satisfaction reaches record levels in UK
Equaterra has published its annual
ITO Service Provider Performance and
Satisfaction Study’, revealing a list of the
best (and worst) performing outsourcing
service providers over the past 12 months
as voted for by some of the top UK
organisations.
The study also revealed the ongoing
difficult economic climate is driving growth
in outsourcing, as companies look to
do more with less. It’s a trend Equaterra
expects to continue into 2010, as UK
organisations look to build on the traction
32 | Outsourcing | January-February 2010
year, reducing costs was by far the
most frequently mentioned goal. In
fact, reducing costs was mentioned
by more companies than the next
two objectives combined (improv-
ing service levels and improving
responsiveness).
The key initiatives data centres
are pursuing to “do more with less”
include automation of routine tasks
(mentioned by 42% of respondents),
cross-training staff (40%) and reduc-
ing data centre complexity (35%).
According to the study, staffing
remains a crucial issue with 36%
reporting that they are understaffed
while only 4% reported being
overstaffed. Furthermore, 43% say
finding qualified applicants is a big
or huge problem.
ts
Responddetnhat
indicateey are
while th green
pursuingtre
data cens, they are
initiative primarily
doing son cost
based o .
benefits
of economic recovery. Sitting at the top of
the list for 2009 according to the customer
satisfaction survey are Capgemini (79%),
Cognizant (79%) and Computacenter (78%).
According to the results, all three shared two
particular traits: “A strong desire to deliver
a very focused portfolio of services and,
in particular, successfully developing an
internal culture which empowers their staff
to proactively engage with clients to develop
innovative solutions”.
Bottom of the table was reserved for HP/
EDS (59%), Verizon Business (58%) and
To address the staffing issue com-
panies are leaning on outsourcing
and training. Nearly half (45%)
outsource primarily to give data
centre staff more time to focus on
other tasks. The top three leading
IT functions that businesses are out-
sourcing include business continuity
(46%), backups (43%) and storage
management (39%). Training is seen
as strategic by 68% of the respon-
dents, with 78% expecting training
budgets to rise or stay constant over
the next two years.
Companies in 2008 reported
that their data centre servers were
operating at just 53% of capacity.
Data centre storage utilisation was
even lower at 50%. Not surprisingly
Symantec found a flurry of activity
aimed at increasing utilisation in
both areas.
The major server-related initia-
tives include server consolidation
(80%) and server virtualisation
(77%). For storage the leading ini-
tiatives were storage virtualisation
(76%), continuous data protection
(71%) and storage resource manage-
ment (71%).
Data centre management contin-
ues to report room for improvement
in the area of disaster recovery. In
fact, just 35% report their disaster
recovery plan is above average,
while 27% say it needs work and
9% report their plan is informal or
undocumented. Companies still find
that human error is the biggest cause
of unplanned downtime, being the
culprit 25% of the time. Hardware/
software failure and power outages
follow closely behind.
Continuing the trend first spotted
in 2007, the data centre’s focus on
“being green” was driven by cost
issues in 2008 with social responsi-
bility on the rise. The study asked
companies why creating a Green
Data Centre was important to their
workplace. Reducing electricity con-
sumption was mentioned by 54%,
followed by reducing cooling costs
(51%) and a sense of responsibility
to the community (42%).
CSC (51%), though Equaterra added client
satisfaction rose across the board for all
performance indicators.
The study also revealed that European IT
outsourcing service providers improved their
satisfaction scores at greater levels than
most Indian-based service providers.
Twelve months ago, the top five rated
service providers for customer satisfaction
included four Indian and only one European
provider. In this year’s survey, four of the top
five rated providers are European, while just
one is Indian.

outsourcing trends for this year
Companies will return to using
outsourcing to recapture innova-
tion and provide flexibility in 2010,
versus simply saving money, but
global economic uncertainty will
continue to impact the industry,
according to year-end predictions
by the International Association of
Outsourcing Professionals (IAOP).
“Coming off a year of tremendous
pressure, the outsourcing industry is
expected to enter the next decade
with positive signs of rebounding,”
said IAOP chairman Michael Corbett.
“As companies recover from these
tough economic times, outsourcing
will enable them to emerge as leaders
in the new global economy.”
Here are the top 10 trends to watch
for in 2010 according to IAOP:
1. Delayed deals get the green
light
The economic downturn over the
past 12 to 18 months put many
outsourcing deals on hold. Com-
panies are now forging ahead with
renewed confidence in the stability
and growth of economic markets.
2.  Desperately seeking value
The tremendous pricing pressure on
outsourcing deals renegotiated in
2008-09 will lead some companies
to realise that deep pricing cuts
have damaged relationships and
the business value that outsourcing
brings. Providers and customers
will re-negotiate contracts more
collaboratively to regain innovation
and flexibility, and enhance total
value.
3. Flexibility to get out of con-
tracts
With uncertainly still surrounding
the economy, companies will hesitate
to make long-term commitments
with outsourcing service providers
because of the fear of the unknown.
study | Outsourcing
6. New outsourcing destinations
emerge
Rising geographies in Central and
South America will take market share
away from traditional outsourcing
locations, such as China.
7. New destinations differenti-
ate themselves
As new destinations emerge, the
competition among outsourcing
providers will intensify, leading parts
of the world – particularly the BRIC
(Brazil, Russia, India and China)
nations – to differentiate themselves
through professional certification
and training and education pro-
grammes.
8. Tooling up with technology
Companies will increasingly make
use of advanced management prac-
tices, tools and technologies – such as
outsourcing relationship manage-
ment and cloud computing – to pro-
“The looming economic uncertainty vide improved value and operational
will lead customers to seek shorter flexibility and performance.
term contracts, inflation indexing,
currency exchange protection and 9. Social responsibility
volume band relief,” said Jagdish Outsourcing practices will continue
Dalal, IAOP’s managing director of to be impacted by increased envi-
thought leadership. ronmental awareness and social
responsibility. The industry will be
4. Uncertainty leads to consoli- called on to step up its role as a leader
dation in corporate social responsibility
Global economic uncertainty, cur- globally.
rency fluctuations and other market “Companies will need to develop
forces will encourage increasing new innovative technologies to de-
As levels of mergers and acquisitions on liver the sustainable products that
companies a global basis, particularly among consumers want and also look more
recover service providers. broadly at the impact of their out-
from these “This consolidation of outsourcing sourcing actions on a global basis,”
tough providers will drive higher value
services and continue to put pressure
said Julia Santos, chair of IAOP’s
global human capital chapter.
economic on other players to be more strategic
times, in their offerings,” said Dalal.   10. Political shifts
outsourcing Increased government regulations
will enable 5. Outsourcing hiring return and the resulting need for compli-
them to Expect to see growth in new gradu- ance will affect outsourcing in the
emerge as ate hiring in emerging outsourcing
locations as well as wage increases
coming year.
“Global businesses will become
leaders in of eight to 10% in India and many increasingly aware of the new
the new other Asia Pacific locations, while regulations and seek to establish
global North America and Western Europe better relationships with key opinion
economy.” will see much smaller raises. leaders,” Santos said.
Outsourcing not a good fit for garment industry
The common practice in the garment industry goods to shoppers when they are in demand,
of outsourcing production and distribution and not producing leftover unneeded inventory
through, “slow boat” channels may create that will be dumped onto a sale rack, retailers
“gross inefficiencies” that cause firms to miss are more likely to get customers to buy early
out on significant profits, according to new at full retail price. The profit margin increase
research. under this combined scenario is exponential.
Stanford Graduate School of Business “Using the more traditional outsourcing
suggests that while this approach seems models requires long production lead times
to make economic sense it may actually be – generally six to nine months – handicapping
damaging for companies. success because producers may miss trends
The researchers say fashion firms are best or changes in consumer tastes. By timing
off when they combine highly fashionable, production to take place a few weeks before
trendy product designs with short production the selling season rather than half a year or
and distribution lead times – in many cases more, a firm can capitalise on more accurate
producing goods closer to home. By getting estimates of demand,” the report states.
January-February 2010 | Outsourcing | 33
Outsourcing | study
Generating innovation
in offshoring relationships
By Danny Ertel and
Joseph Bubman
In addition to whatever else
may drive a company’s decision
to outsource, management nearly
always expects, demands, and ob-
tains some near-term cost savings.
In many cases, those savings are
made available immediately to
the customer via an invoice from
the provider for less than what the
company used to pay to deliver the
services internally.
But as the relationship goes
through its transition phase and
stabilises, customers begin to ask
their providers, “What have you
done for me lately?” and “Where
is my innovation and continu-
ous improvement?” Even when
outsourcing isn’t “supposed” to be
about innovation, most customers
expect it — and are dissatisfied
when they don’t get it.
Meeting the customer’s demands
for continuous improvement is not
easy. The provider, on the hook
for the initial savings, has to
deliver the same service for
less, cover its own sales
and marketing costs,
and still earn a mar-
gin. Even with better
technology and lower
labour costs, this can
be a daunting chal-
lenge.
It should be no
surprise then that
ongoing improve-
ments in quality and
service often fail
to materialise,
and result in
frustrated and
dissatisfied
customers.
In offshore
relationships,
clients and
providers
34 | Outsourcing | January-February 2010
must grapple not only with these
familiar challenges that get in the
way of generating innovation, but
also with the obstacle that hundreds
of participants in Vantage Partners’
new study, “Managing Offshoring
Relationships: Governance in Global
Deals”, identified as the most signifi-
cant challenge of working with an
overseas partner: cultural differences.
83% of survey respondents said
customer-provider differences in
offshore deals have at least some
impact on missed innovation.
Specifically, cultural challenges
related to directness of communica-
tion, ambiguity, commitments, and
dealing with conflict are believed by
survey respondents to have the most
significant impact on generating
innovation. This article explores how
cultural chal-
lenges impact
innovation ef-
forts and offers
best practice
solutions for
overcoming
them.
DirectNESS
Of the respon-
dents who said
cultural differences
impact innovation,
more than half (57%)
also noted that direct-
ness of communication
poses a challenge in
their relationship.
In general, cus-
tomers believe
Figure 1
% of customers who described a preference for direct communication
80%
� Customers describing their
own organization
� Customers describing their
60% provider in India
40%
20%
0%
*Note: This chart represents only customers who offshore to India and n=41
who said cultural differences impact generating innovation
Meeting the they tend to communicate directly,
customer’s but that their provider communicates
demands for indirectly, perhaps avoiding explicit
continuous discussion of innovation expectations
improvement for fear of being held accountable for
is not easy. The yet another activity.
provider, on the For example, of customers whose
hook for the providers deliver services from India,
initial savings, 63% describe their own organisations
has to deliver as communicating directly, while only
the same service 29% describe their provider that way
for less, cover (see Figure 1). Indirect communication
its own sales can serve as a significant barrier if it
and marketing means, for instance, that providers
costs, and still are reluctant to propose new ideas,
earn a margin. resulting in missed opportunities.
Even with better One reason providers may be
technology and reluctant to share ideas is that they
lower labour perceive their client as not open to
costs, this can hearing them. A “not-invented-here”
be a daunting skepticism to ideas from the overseas
challenge. partner and reluctance to change
certainly reduces the provider’s incen-
tive to brainstorm new ideas.
Kurt Kohorst, VP of Business
Process Management at Liberty
Mutual Insurance, says that this type
of organisational attitude adversely
impacted a data processing and
back-office services deal earlier in
his career. “When our provider in
India had ideas that required us to
change internally, the organisational
tendency was to reject them without
serious consideration,” he said. “After
a few ideas were shot down without
solid communication back to front-
line resources as to why, there was
little incentive for the provider to
 study | Outsourcing

Figure 2
% of respondents who described a tendency
to agree even when not sure they can deliver

100%
� Customers describing their
provider in India

80% � Providers in India describing

their own organization

60%

40%

20%

0%
*Note: This chart represents only respondents in India offshore deals who n=41
said cultural differences impact generating innovation

come up with more ideas.” Right ...

One reason
Ambiguity providers may
Of the respondents who said cul- be reluctant
tural differences impact innovation, to share ideas
nearly half (47%) also noted that is that they
ambiguity poses a challenge in their perceive their
relationship. An ambiguous defini- customer as
tion of innovation typically leads to not open to
misalignment over what innovation hearing them.
means. Does innovation refer only to
large, break-through ideas that have
never been done before? Or does it in-
clude the adoption of best practices?
Does innovation include the many
small, incremental improvements
a provider might introduce, or are
those just a part of what it means to
provide a managed service? When our
Without a shared, clear view
of what counts as innovation, the provider in
customer and provider are likely to India had ideas
disagree about whether and how
much of it is occurring. Misalign- that required
ment around innovation expecta- us to change
tions might explain in part why
80% of customers that offshore to internally, the
India believe their provider agrees organisational
even when not sure it can deliver,
but only 25% of providers in India tendency was
describe themselves that way (see to reject them
Figure 2).
That is, an ambiguous definition
without serious
of innovation may simultaneously consideration.
result in the provider believing it
is delivering continuous improve-
Figure 3
ment and the customer feeling its % annual contract value impacted by cultural challenges: % annual contract value impacted by cultural challenges:
innovation expectations are not Impact of cultural differences on generating innovation is Impact of cultural differences on generating innovation is
insignificant or fairly insignificant (1 or 2 on 5-point scale) at least fairly significant (4 or 5 on 5-point scale)
being met.

Innovation challenges
Opportunities to innovate in offshor-
ing relationships are lost when the % impact on annual 23%
contract value
parties do not effectively manage
the challenges described above. � 10% or less
51%
And that lack of innovation has 49% � More than 10%

real consequences for the customers’

business cases and the providers’ 77%
margins. When respondents com-
plained of a lack of innovation, they
also reported they experienced the
following consequences:

January-February 2010 | Outsourcing | 35

Outsourcing | study

•  Opportunities to add greater

value are lost
•  Time is wasted on conflict and
revisiting decisions
•  End users complain about lack
of improvements in service qual-
ity
•  Costs increase; savings targets
are not met
•  Critical deadlines are missed
•  Staff morale wanes

The extent to which culture

impacts innovation also affects
the parties’ ability to achieve the
value set out in the contract. When
innovation is a relatively insignifi-
cant challenge, 51% of respondents
report that the percentage impact
on annual contract value is more
than 10% (see Figure 3). But when
culture makes innovation relatively
difficult, 77% of respondents say
the percentage of annual contract
value at stake is greater than 10%,
and 44% say that the value at stake
is greater than 20%.

Best practices
Cultural challenges are formidable
barriers to innovation, but customers
and providers can overcome them
by adopting some best practices.
A relationship launch is a perfect
opportunity for both sides to discuss
what “innovation” means and what
will be required of each party to
achieve it.
The parties should first align
around a definition of innovation
for the relationship, distinguish-
ing continuous improvement from
breakthrough innovation that
extends beyond contractual terms.
They should then determine
how continuous improvement will
be tracked and what process they
will use to pursue breakthrough
innovation. The agreed plan for
generating innovation should be
communicated to all stakeholders in
the relationship so that they know
what is required of them.
Value discovery
Customers and providers should
recognise that innovation requires
collaboration. There are only so
many things that a provider can do,
by itself and in a sustainable way,
to deliver savings to a customer,
and those things are probably just
not enough. Many customers and
providers are therefore collaborat-
ing in value discovery sessions to
achieve breakthrough innovation
in their relationships.
Before trying to figure out how
to transform service delivery or
create new offerings, the parties
think broadly together about the
sources of value available and
brainstorm together to identify
specific opportunities. Such sessions
Customers and
providers should
recognise that
innovation
requires
collaboration.
Table 1
Bottom-Line Savings Top-Line Value Operating Efficiencies
Elimination of redundant assets and
 Faster development cycles; faster time 
 Improved value-chain forecasting and
processes through centralisation or to market response
shared-service approaches
Access to new insights about customers 
 Improved quality and speed of deci-
Joint (re-)design of processes for more
 and marketplace sion-making
efficient service delivery
Increased market share and margin
 Reduced time and effort in scope man-

Reduction in headcount through more
 through quality improvement agement
efficient processes and/or moves to
New product/service development
 Enhanced service quality, responsive-

self-service or greater reliance on
ness, and flexibility
technology Joint marketing

Reduction in errors and conflicts

Reduction in capital expenditures by 
 Access to, or penetration of, new
shifting them to, or sharing them with, markets Streamlined management of order ful-

filment, rebates, etc.
providers Balance of trade arrangements with

providers as customers and /or channels 
Reduced time spent on provider selec-
tion and contract negotiation

36 | Outsourcing | January-February 2010

 study | Outsourcing

Figure 4
Interconnect: align
resource/forecast and structure Leverage from
are most effective when they include way of working together installed base to
develop new services
individuals who understand the High Provide VIP-level network Worth further
Highest return quality for areas with exploration
customer’s and provider’s business important customers
Schedule innovation
objectives and strategy, can describe forums and meetings Automate &
the current state of delivery, and can standardize KPI
reporting
Expand partnership
to competition
help think outside the box about a Provide bonuses
Value

for idea Build solid

future state that better meets busi- generation Create
transparency on Reduce battery tooling
back-up on Consolidate
ness priorities. business drivers
low-revenue sites WLAs
The parties should consider op- Promote open mind
to new ideas
portunities in categories depicted Depends on
Low Not worth doing
in Table 1 and focus not only on other priorities
significant medium- or long-term
opportunities, but also quick wins
that can be realised rapidly to build
momentum and buy-in from key
Effort
stakeholders. Low High
“We’re doing value engineering
workshops where we take time out
to sit for a week every three months,”

Without a shared, clear

says a US customer that offshores
construction projects (design,
permitting, procurement & project
management). “To get savings, you
really need to get people together
and incent them to do it; savings in a
suggestion box simply doesn’t work.
The value engineering has fixed a
lot of things.”
A systematic approach to evalu-
ating ideas is important to prevent
not-invented-here syndrome, which
may discourage the customer from
supporting solutions or approaches
viewed as coming from outside its
organisation. Separating brain-
storming from evaluation helps
mitigate this risk because the parties
are able to assess the brainstormed
ideas without endorsing or criticising
the organisation or individual who
proposed them.
To ensure decisions are made
on the merits, the parties should
consider mapping their initial set
of innovation opportunities to a
simple value/effort matrix (see Figure
Cultural
challenges are
formidable
barriers to view of what counts as
innovation, but
customers and innovation, the customer
providers can
overcome them and provider are likely to
by adopting
some best disagree about whether and
practices.
how much of it is occurring.
4) before deciding which ones to were approved.”
pursue.
“We formalised a mechanism for
approving and rejecting ideas, as Danny Ertel is a founding partner
well as a process for communicating of Vantage Partners, while Joseph
those decisions to the front line,” Bubman is a consultant at the global
Kohorst said. management consulting firm. A spin-
“This approach not only en- off of the Harvard Negotiation Project,
couraged our provider to submit Vantage Partners helps customers and
ideas but also enabled them to providers enter into, manage, and
develop better ideas over time as (when necessary) remediate working
they discovered why certain ideas relationships.

January-February 2010 | Outsourcing | 37

Outsourcing | management
By
Dr ArLyne
Diamond
Mentoring in
the workplace
Mentoring in the workplace is
currently a commonplace relation-
ship between a senior executive and
a younger professional. How are
these relationships developed? What
are the rules? The game plan? The
possible conflicts of interest? How
open and honest can the younger
professional be when he/she knows
that the executive is a friend of the
boss? How is mentoring different
from couching or counseling? I’ll
try to answer all these and more,
but first …
Madeline Scherer was my first
mentor. She came into my life when
38 | Outsourcing | January-February 2010
I was a pre-teen. Madeline was a
contemporary of my mother’s but
a “career woman” – which trans-
lated in those days to an unmarried
woman who had to work for a living.
Madeline was a beautiful, articulate
How open
and vibrant redhead (I too am a
and honest travel as a woman with-
redhead) and lived her life fully,
can the out a man to take care
younger
even though she was unmarried. professional of her. She encouraged
She took me under her wing and be when me to eat in better res-
taught me how to dress so that my he/she taurants in an era when
sexuality was subtle and I looked knows a woman alone would
conservative and professional at that the only eat in neighbourhood
all times. She taught me some of executive is coffee shops. Madeline took
the tricks my mother wouldn’t dare a friend of me to Washington D.C. for a long
tell me. Madeline taught me how to the boss?” weekend and among the other things

I learned was how to order room
service for breakfast in bed.
She was wonderful. The only
way possible to re-pay her for all
the positive attention she paid me
as a mentor was for me to mentor
young women in turn. I’ve spent a
significant portion of my adult life
doing just that.
But, what’s a mentor? In my mind
the most important elements for
being a good mentor include that
there is no relationship between
the mentee and the mentor that
would make the mentor have a
vested interest in the outcome of the
suggestions made (except of course,
caring!) Thus, a mentor cannot be a
close family member, nor, I believe
should it be someone with whom
you work – even if they are in a very
different part of the company. It’s too
small a small world. (But, I know it
happens and I will address how to
handle it later in this article.)
As I write this, I am reminded
of an on-going argument I had
years ago with the mental health
staff of one of California’s Hospitals
for the Criminally Mentally Dis-
turbed – including child-molesters.
In those days convict or patients
were supposed to be in therapy to be
rehabilitated. However, the therapist
with whom they worked was also
the person who evaluated them for
parole. Consequently, the convict/
patient wasn’t inclined to be too
honest about disturbing thoughts
with the therapist/evaluator and
the overall result was that therapy
didn’t work. I begged them to create
a confidential relationship between
convict/patient and therapist and to
assign a separate psychologist to do
independent evaluations.
Trust is a key component of
someone’s willingness to open up
and share their thoughts.
I think the same thing applies
when assigning a mentor-mentee
relationship in the workplace. How
much can the mentee really tell
or ask the mentor? Can he share
his concern that he isn’t working
as effectively as he could? That he
really thinks he is a bad fit for the
job he’s in? Wouldn’t he be afraid
that somehow this would get shared
with the executive up his chain of
command?
Let me share with you a little
about two mentoring relationships
I’ve had with clients. For purposes
of confidentiality I’ve changed
their names and disguised their
companies.
Diane came to me as a manager
in a large company. She was bright,
ambitious, but not sure how to
develop her professional image,
meeting participation, and decision-
making in a way that would lead to
management | Outsourcing
promotions. We worked together for new business cards.” His President
two hours at a time every other week chuckled and signed the form.
Trust is for over two years. During that time Later, Sam decided to do some
a key Diane would brainstorm strategies extensive community service work
component and tactics with me and together and debated whether to leave his job
of we’d create a plan that she would and devote himself to the research
someone’s later implement. We talked about he wanted to do, or to stay and do
willingness managing her boss, managing those both. We spent several sessions
to open who reported to her, and dealing looking at the pros and cons and
up and with some jealousy and animosity he eventually decided to keep the
share their from co-workers. community service as a side-line,
thoughts.” She was promoted from Manager while continuing to work full time
to Director and from Director to Vice- in his present company. I spoke
President during our time together. with him the other day and he’s still
Her company was sold to a happily doing both.
large international conglomerate. These examples are both of
We spent many sessions talking workplace related needs. I also men-
about her concerns about a very tor some young women who are
different style of management. This striving to grow professionally – but
conglomerate, unlike the American are still in college. More about them
style, didn’t allow their American perhaps in another article.
managers to have visibility or So what do I think the rules
decision-making authority. Diane, should be? What is the game plan
along with some of her peers became in a really solid mentoring relation-
disgruntled and eventually left the ship?
newly-merged company. She went • First and foremost, the mentor
on to found her own company and and mentee should feel comfort-
is now a very successful CEO. She still able with each other.
consults with me occasionally. • Second, trust becomes critical.
Sam was a Director of his com- The mentee should feel that he
pany when he first came to see me. or she can share anything and
Although very bright, he was a quiet everything with the mentor
and somewhat self-effacing man without fear of reprisal.
who faded into the background. He
wanted my help with two primary
areas when we first met. The first
was his concern that he didn’t have
the respect he thought he should
have from his direct-reports. The
second was that he thought he had
been passed over for promotion to
Vice-President on more than one
occasion.
Sam loved his company and
the actual work he was doing and
Right ... The wanted to solve these problems
mentor is a rather than look for work elsewhere.
resource of We worked together, again for two
information hours every other week, on his
and presentation style and professional
suggestions – image. I even made suggestions
not someone to him about the clothes he wore
demanding to work. He came out of his shell
success. It’s the and became more assertive, more
experience, attractive, and more visible.
knowledge, Indeed, at one point he went into
and savvy of his President and said, “I think it’s
the mentor time I became a Vice-President. Will
that the you approve this form so I can order
mentee seeks.
January-February 2010 | Outsourcing | 39
Outsourcing | management
Respect for the knowledge, maturity,
experience and savvy of the mentor
by the mentee is crucial.
• This often means that the mentor
should not be a member of the
same organisation.
• However, I know it’s being done
in lot’s of big firms, so here are
my guidelines:
• A written contract provided by
Human Resources (HR) that
binds the mentor to complete
confidentiality.
• A clear distance between mentor
and mentee’s departments. The
mentor should never be in any
position to have a workplace
need for the services of the men-
tee – not even as an internal
customer of each other.
• The mentee should not share who
her mentor is with others in the
organisation.
• All conversations between the
mentor and mentee should be
offsite.
• Respect for the knowledge, matu-
rity, experience and savvy of the
40 | Outsourcing | January-February 2010
mentor by the mentee is crucial Above ... In and savvy of the mentor that the
as well. sports the mentee seeks.
coach sets The game plan changes from
Now, let me talk about rules of the goals and time to time depending on the needs
the road. Here I’d like to create a encourages of the mentee and the mentor should
clear comparison between the role the person be flexible enough to change with
of coach and that of mentor. In a being coached the changing needs, while at the
coaching relationship, the coach to achieve same time keeping the thread of their
has clear goals that he or she wishes those goals. main issues in the forefront.
the person being coached to achieve. That should In my professional opinion, men-
Our model of workplace coaching not be the tors need to be properly trained.
comes from sports. In sports the relationship They are not to be teachers, trainers,
coach sets the goals and encourages between coaches, or parent-substitutes. They
the person being coached to achieve mentor and are to be resources and the conversa-
those goals. That should not be the mentee. In tion should be primarily guided by
relationship between mentor and the mentoring the mentee. This switch in control is
mentee. relationship, it often exceedingly difficult for execu-
In the mentoring relationship, is the mentee tives to make.
it is the mentee who sets the goals. who sets the
He or she has a concern or question goals.
and wants some help figuring out Dr ArLyne Diamond is an Organi-
strategy, tactics, etc. The mentor is a sational Development and Human
resource of information and sugges- Resource Consultant with over 30 years
tions – not someone demanding suc- experience. She can be contacted at
cess. It’s the experience, knowledge, arlyne@diamondassociates.net
Outsourcing | Special Feature: BaSiS Bay

Virtualisation ...
a step to Cloud Computing
Virtualisation, in it terminology, is a technique of resource sharing Cloud Computing Architecture & Virtualisation
that is based on the principles of dividing physical resources (HW) or
operating systems (sW) for cost control measures and – A Sample
more efficient utilisation of the resources.
significantly, companies appreciate the business
case for optimising the flexibility, agility and speed of
the Virtualised server, storage and network to maximise
efficiency by harnessing the power of automation across
their evolving it infrastructure. in turn, companies can
reduce the total cost of ownership beyond acquisition
and operational costs.
a leading it research firm indicates 18% of server
workloads in 2009 ran on Virtualised servers; that share
is expected to grow to 28% this year and reach almost
half by 2012.
as a consequence of widespread adoption of
Virtualisation concepts and technology, Virtualisation
solutions are getting more sophisticated and forming
a key ingredient for Cloud Computing.
some of the key Virtualisation technological concepts
are:

Full-Virtualisation technique:
technique a technique used to
provide a certain kind of virtual machine environment,
namely, one that is a complete simulation of the
underlying hardware. in such an environment, any
software capable of execution on the raw hardware can
be run in the virtual machine*. since this is a complete
simulation of underlying hardware, it does not require
any assistance from the hardware or the operating ud-a
te Clo
Priva
system to Virtualise certain privileged instructions.
Para-Virtualisation technique:
technique a technique that Cloud Computing
presents a software interface to virtual machines that is (Public)

B
d-
similar but not identical to that of the underlying hard-

ou
Cl
ware. ParaVirtualisation requires the guest operating
te
iva
Pr

system to be explicitly ported for the Para-application

Program interface (aPi)*.
Hardware-assisted technique:
technique this is a platform
Virtualisation approach that enables efficient full
Virtualisation using help from hardware capabilities,
primarily from the host processors. Hardware-assisted Virtualisation was amount of resources consumed (and
recently (2006) added to x86 processors (intel Vt or aMD-V)*. therefore the cost) will typically reflect
the level of activity.
Cloud Computing software-as-a-service: saas is a
Cloud computing is a paradigm of computing in which dynamically model of software deployment whereby
scalable and often Virtualised resources are provided as a service over the a provider licenses an application to
internet* i.e., computing resources, including saas, offered from remote customers for use as a service on
highly consolidated Data Centres, as depicted in the above-mentioned demand. saas software vendors may
diagram, generally owned and operated by a third-party provider. host the application on their own web
Gartner Group defines cloud computing as an infrastructure utility servers or download the application to
that is open, flexible, predesigned and standardised, Virtualised, and the consumer device, disabling it after
highly automated, as well as secure and reliable. use or after the on-demand contract
the words “often Virtualised resources” would need to be com- expires;
prehended as a thought process. availability of high-speed internet,
significant innovations in Virtualisation have helped push cloud Technological prospects
computing to great heights. the advent of Cloud computing has
some cloud-computing offerings employ the utility computing model further enhanced the prospects of Vir-
(such as water, electricity etc.,) whereas others bill on a subscription- tualisation technologies. t
to offer Cloud
based model. such a concept would need to consider occasional or Computing services, implementation of
frequent increase in demand and “Virtualised resources” are expected Virtualisation technologies are just one
to have the flexibility to accommodate such requests. part of the equation – the other is the
thus, the concept Virtualisation is the significant technological infrastructure aspect namely, a resilient
concept for all cloud architectures. some examples of Cloud Computing and robust Data Centre such as Basis
include Google, amazon, Facebook, salesforce.com and others. Bay’s flagship “Green Data Centre”,
Cloud Computing includes iaas (infrastructure-as-a-service), Paas solid network connectivity, security
(Platform-as-a-service), saas (software-as-a-service) and (Waas (Web-as- infrastructure, besides the ability to
a-service). among these, let us define the two key significant items: offer Cloud for various spectrum such
as, Private and Public cloud, are all of
infrastructure-as-a-service: iaas deals with the delivery of computer significant importance.
infrastructure (generally a Virtualised server environment) as a service.
rather than purchasing servers, software, Data Centre space or network *Source: wikipedia
equipment, clients instead buy those resources as a fully outsourced
service. the service is typically billed on a utility computing basis and

January-February 2010 | Outsourcing | 41

Outsourcing | happenings
IBM’s latest
Cloud offerings
IBM Malaysia Sdn Bhd has intro-
duced it’s latest business driven and
workload centric “cloud computing”
offerings in Malaysia.

 some big organisations for major
Cloud computing is a general
term for anything that involves
delivering hosted services in the IT
sector through the internet.

 products into private and public,
“These new products are designed
to improve agility, reduce costs and
enhance the user experience,” the
general manager of IBM Malaysia
for Global Technology Services,
Robert Lye W.T said.

 cost reduction,” Lye added.
 said: “Our dealings with the Zapper
He added the products, the
Cloud Project Based and Managed
Services, Cloud Delivered Services
and Cloud Platform Components,
are widely accepted in other
countries such as China and Aus-
tralia.

 agility, reduce costs
According to Lye, the main driver
of the cloud utilisation is the tele-
communications and infrastructure
Fujitsu launches
DaaS services
Fujitsu announced the launch in
Japan of its Workplace LCM Service,
which leverages a cloud-based plat-
form to provide total outsourcing
support over the lifecycle of customer
ICT equipment, including personal
computers, printers, multifunction
copiers and on-site departmental
servers.
Workplace LCM Service is de-
signed to keep pace with the diverse
work styles and multivendor ICT
environment at customer offices.
The outsourcing service is available
for a monthly fee and covers all
tasks involved in the ICT equipment
lifecycle, ranging from planning
and acquisition to deployment,
day-to-day operations, equipment
retirement, and disposal.
Previously only available for
PC management, the new service
extends outsourcing to printers,
42 | Outsourcing | January-February 2010
storage segments.

 Singapore based Zapper has over
He said in Malaysia, the com-
pany was still negotiating with
deals in this business.

 The Group provides outsourced
”We are also diversifying the
direction of the cloud computing
in Malaysia.
“These clouds have proven
benefits, such as a reduction in IT
labour cost by 50%, 75% capital
utilisation improvement and license
These new products
are designed to improve
and enhance the user
experience.”
multifunction copiers, servers, and
other ICT equipment, while also
adding a wide range of new sought-
after offerings, including security
measures and mobile access.
In addition, the previous out-
sourcing service for PCs has been
expanded into Desktop-as-a-Service
(DaaS) to deliver a host of business
applications to PCs at customer sites
via the Internet.
It said the new suite of services
will help customers reduce operating
costs and administrative workloads
while providing end users with a
flexible working environment.
In November, Fujitsu and storage
and data management company
NetApp announced plans to expand
their partnership to provide more
tightly integrated and automated
storage and data management
solutions.
Talent2 completes
Zapper takeover
Talent2, Asia Pacific’s largest HR
Outsourcing company has recently
completed the acquisition of Zapper
Services, a leading Asian Payroll
services business.
The acquisition was funded
through a combination of debt, 60%,
and equity 40%.
20 years of experience with almost
1000 clients, from SMEs to MNCs,
across the region.
payroll and HR administration
services to 14 countries, including
China, Hong Kong, Japan, Malaysia,
Philippines, Singapore, Thailand
and Vietnam. The firm employs over
100 staff, with processing centres in
Philippines, Singapore and Malaysia.
John Rawlinson, CEO, Talent2,
team during the completion and due
diligence process, has reaffirmed
our belief that Zapper is a quality
business, and an excellent fit with
Talent2’s strategy. The acquisition
consolidates our position as the
leading provider of Human Resource
Outsourcing Solutions across all of
Asia Pacific.”
ASOCIO to focus
on green ICT
The Asian-Oceanian Computing
Industry Organisation (ASOCIO) is
starting the new decade with green
in mind. Fresh from its 27th General
Assembly held in Melbourne,
Australia recently, the regional
IT grouping has incorporated
environmental preservation as one of
its top priorities.
Themed Preserving Earth in the IT
World, ASOCIO’s Green IT agenda
will define initiatives geared towards
promoting environment-friendly
practices among its members which
represents 21 countries across the
region.
“We are starting a new decade.
In every new beginning, we analyse
the past and present to identify
issues that need to be solved in
order to realise a better future,” says
newly-appointed ASOCIO president
Looi Kien Leong.
He adds that broad-based
world’s sentiments towards
environmental issues have
been highlighted at the recent
Copenhagen Summit and ASOCIO
would also like to play its part by
advocating Green IT in the Asia-
Oceania region.

64 companies honoured
at MSC Malaysia
Achievement Event
MSC Malaysia CDP’s ‘Innovate My Process’
initiative helps a record setting number of MSC
Malaysia Status companies achieving global
standards certification in 2009.
Multimedia Development Corpo-
ration (MDeC), the driver of MSC
Malaysia’s National ICT Initiative,
honoured the achievements of 64
MSC Malaysia Status companies that
attained global standards certifica-
tions in 2009 at the MSC Malaysia
Achievement Event (AE09) gala
ceremony and dinner in December
2009.
Guest of honour, Deputy Minister
of Science, Technology and Innova-
tion YB Tuan Haji Fadillah Haji Yusof
and MDeC CEO Datuk Badlisham
Ghazali presented the 64 companies
with letters of recognition.
Among the achievements of the
64 companies are certifications in
the CMMI (Capability Maturity
Model Integration), the ISO 20000 (IT
Service Management), the ISO 27001
(Information Security Management
System), Software Testing, Six Sigma
and Professional Development.
The certifications were
earned through participation
in the MSC Malaysia Capabil-
ity Development Programme
(CDP). Others among the
companies that were
also honoured at
the AE09 had
sent their
staff
for
From left … on-going skills and knowledge edu-
Badlisham, MDeC cation under the MSC Malaysia CDP
COO Ng Wan Peng Professional Development.
and Ng at the press “2009 has been a tough year
conference. for business. Despite intense pres-
sure to control costs, MSC Malaysia
Status companies have continued
to invest in raising their competi-
tiveness through adopting global
best practices. Today, at the MSC
Malaysia Achievement Event
2009 we are honouring a record
setting 64 companies for achieving
global standards certification,” said
Badlisham.
250 MSC Malaysia Status compa-
Fadillah delivering nies participated in 20 programmes
a speech during the conducted by the MSC Malaysia
event. CDP as part of “Innovate My Pro-
cess” initiative. These programmes
addressed the key areas of customer
service, systematic innovation, cost
optimisation, process improvement,
product performance enhancement,
and brand management among
others.
The MSC Malaysia CDP was
established to raise the level of
competitiveness of MSC Malaysia
Status companies by increasing
January-February 2010 | Outsourcing |
happenings | Outsourcing
From left … Paradigm
Systems Executive
Director Goh Keng Yew,
Pentasoft Malaysia
CEO K. Kuppusamy,
MDeC Head of
Capability Development
Department Dr. Karl
Ng, Macrokiosk CEO
Kenny Goh and ISM
Insurance Services
Malaysia CEO Carl
Rajendram participating
in a ‘Client Sharing
Session’ during
cocktails session.
the adoption of international best
practices and policies through
global standards certifications, and
to furnish assistance and provide
initiatives to MSC Malaysia Status
companies to enhance their capabil-
ity and global competitiveness.
This is achieved through 13
organisational development pro-
grammes and the MSC Malaysia
CDP Professional Development
that together addressed the four
focus areas, namely process, people,
product and management.
The MSC Malaysia CDP also orga-
nises and hosts monthly dialogues,
seminars, clinics and workshops
that help increase awareness among
the management of Malaysian
ICT companies of the need to and
benefits of raising their internal
capabilities so as to deliver superior
products and services to and increas-
ingly demanding, competitive and
sophisticated global market.
The benefits of participation in
MSC Malaysia CDP has led com-
panies that have completed the
programmes to return in pursuit
of further certification. One such
company is Pentasoft Malaysia
Sdn. Bhd., who in 2009 success-
fully won eight out of 20 of the
international contracts it pursued
against competition from US, UK
and Indian companies. These con-
tracts generated revenues of more
than RM14 million. Pentasoft was
honoured at AE09 for achieving
the ISO 20000 this year. In previ-
ous years, Pentasoft has worked
with MSC Malaysia CDP to achieve
certification in Software Testing
and is one of only a few Malaysian
companies to have achieved the
CMMI Maturity Level 5.
43
Outsourcing | Light takes

Many Brits
think Apple
CEO is
footballer
The giants of technology are strug-
gling to get through to Brits, a survey
by Lewis PR has suggested.
The casual survey took opinions
from 1000 Britons from across the
country, and the results were pretty
shocking. Of the 1000 surveyed, 20%
did not know who Apple CEO Steve
Jobs was, with 10% thinking he was
a Trade Union worker and 20% even
believing he was a footballer.
Although more people knew who
Bill Gates was, 5% of people believed
he was either a comedian, or even
one of the Great Train robbers of
the 60’s. According to 5%, internet
founder Sir Tim Berners-Lee was the
first astronaut in space.
The survey also looked at general
terms used, such as phishing and
wireless dongle. Most users of the
internet understand what phishing
is, but some must have taken it too
literally, as 4% believed it was an
“angling method used by Eskimos”.
What’s worse, a surprising 10%
thought a dongle was a sex toy,
and 6% assumed a VHD (virtual
hard disk) was a type of sexually
transmitted disease.
Social networking only stumped
11% of those polled, with 72% using
Facebook regularly. However, only
12% recognised Twitter. 12% could
not name a single site.
Eb Adeyeri, digital PR director at
Lewis PR, added: “Technology and
the Internet is playing an increas-
ingly dominant role in our lives, but
it is still striking how little is known
about some of its key figures, gadgets
and aspects. Although many people
knew the correct answers, a substan-
tial minority had absolutely no idea.
There is a digital divide in Britain
between those who understand
the importance of technology and
those who are either not interested
or frightened by it.
“This demonstrates a need for
everyone involved in the industry
to speak about technology and
the benefits it brings clearly and
succinctly, and avoid the jargon and
‘geek speak’ that deters so many Tiger Woods ads
from developing an interest.”
to be removed from
Shanghai airport
Technology and the
Internet is playing an increasingly Accenture’s billboards and
dominant role in our lives, but it airport advertisements featuring
Tiger Woods at the Shanghai
is still striking how little is known Hongqiao Airport will be
about some of its key figures, removed, the Beijing Star Daily
gadgets and aspects.” has reported.
The global consulting and
outsourcing firm decided to
end its sponsorship deal with

Outsourcing of customes
Woods in December 2009,
saying the golfer is “no longer
the right representative” for the

– Berlusconi in hot soup outsourcing giants.

Workers at Italian Prime Minister
Silvio Berlusconi’s media company
Mediaset staged a protest recently
against outsourcing of the costumes
and make-up department.
Employees gathered outside the
main television production centre
in Rome chanting slogans against
Berlusconi, who has often boasted of
the harmonious industrial relations
in his media empire.
“It’s like living a nightmare,”
Mediaset hairdresser Paolo Bambusi
said. “After 20 years of work it is an
impossible situation.”
Mediaset has said jobs and salary
levels were not at risk.
Berlusconi founded Milan-based
Mediaset in the 1970s and controls
it today with a 38.6% stake held by
his family holding company. The
group competes primarily against
public broadcaster RAI and News
Corporation’s Sky Italia.
Meanwhile, the New York
Daily News reported that in the
latest advertising campaign,
Accenture features an elephant
surfing with the tagline” “Who
says you can’t be big and
nimble?”
The previous ad with the
It’s like golfer showed Woods leaning
over to look at a golf ball nestled
living a between some rocks, reported.
nightmare,” The copy read: “It’s what you
– Paolo do next that counts.”
Bambusi

44 | Outsourcing | January-February 2010

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mdec.indd 22 1/30/08 9:23:06 PM

Ad SSO 307x220 FA.indd 1 7/18/07 4:34:02 PM
 MSC Malay
MalayS
Sia Capability DevelopM
DevelopMent progra
rograMM
MMe
e

ContentS

Turbo
• Know Us

• List of

charge
Programmes

• Succeeding
in Economic

your competitive
Downturn

• Snap Shots

advantage with • Quick Facts

the right qualifications

KNOW US

MSC Malaysia Capability

Development Programme
I
n an increasingly demanding, competitive and world-class services.
sophisticated global market, MSC Malaysia Capabil- CDP not only assists companies and individuals
ity Development Programme (CDP) is designed in achieving these certifications more cost-effectively
to help local ICT organisations to maximise their (nearly 50% cost reduction) but it also enables ad-
potentials by adopting global good practices and ditional benefits from monthly dialogues, seminars,
process improvements. clinics and workshops developed to gear the MSC
CDP introduces a systematic approach in the deliv- Malaysia status companies to achieve certifications
ery of products and services and prepares companies that would ensure competitive advantage.
into the next phase of growth.
The programmes are aimed at enabling companies
to focus on their core competency and hone their
competitive edge.
This is in line with high
offers
the MSC Malay- T h u b that loping and
bal IC s by deve
sia initiatives the glo e
ala ysia as s and servic ies.”
in catalysing N M S C M o d u c t
om p an
Miss
iO ion e pr us C
wealth cre- d posit competitiv laysia Stat
and an lly a bilities
ation for “To br y and globa lass MSC M s capa
qua lit or ld c o m panie
the nation. ring w tatus
c
nurtu ysia S
Today, there
e M S C Mala
h
are 13 or- GOal elop t titiveness” Globa
l
d Dev e sia as g the
ganisational N u rture an bal comp M alay
“ ure glo MSC y increasin
development to ens ess of b
p e titiven nd services tions.
programmes c T iv e s
a n d c o m
u c ts a rt if ic a anies
Obje dards prod and ce Comp
offered together
is e th e stan vide quality practices y s ia Status
• Ra b that pro dards, bes t la
C Ma titiveness .
with a new ini- to MS s
ICT hu ion of stan iatives lobal comp
e panie -
tiative for profes- it s Com
ado p t
ta nc e & in
y an d g
y s ia Statu pment Pro
sional capability sis it Mala y Develo
ish as apabil MSC
development called • Furn ance their c for all ia Capabil
it
n h n ity eet
CDP Professional to e
p p o rtu
M a la y s es to m
P r
o
ovide te in MSC e p ro gramm
Development. • rticip
a ovativ s.
to pa es. fer inn d
This initiative fo- ra m m elo p and of panies nee
g v
cuses on improving the tin u ally de Status Com
skills of ICT professionals • Con C Malaysia
all MS
in Malaysia in delivering

The liNe-up
Domain Specialist Contact
CDP CMMI Ahmad Syahrir syahrir@mdec.com.my
CDP Project Management Aiza Zeyati Zamani aiza@mdec.com.my
CDP Software Testing Azdilizan Abdullah azdilizan@mdec.com.my
ediTOrial cOMMiTTee
CDP Six Sigma Ahamad Syahrir syahri@mdec.com.my Dr. Karl Ng Kah Hou, Muhundhan
CDP ISMS Muhundhan Kamarapullai kmuhu@mdec.com.my Kamarapullai, Edi Hezri Hairi &
Jezamin Abdul Razak
CDP ITSM Jezamin Abdul Razak jezamin@mdec.com.my
CDP QMS Nur Aida Mohd Ghouse nuraida@mdec.com.my
CDP Showcase Marzuki Ahmad marz@mdec.com.my Multimedia Development Corporation
MSC Malaysia Headquarters, Persiaran APEC,
CDP Leadership Nurasmunira Mat Ariffin nurasmunira@mdec.com.my
mdec.com.my 63000 Cyberjaya, Selangor Darul Ehsan
CDP Strategy & Management Ahmad Syahrir syahrir@mdec.com.my email: clic@mdec.com.my
Tel: 1-800-88-8338 (within Malaysia); +603 8315 3000
CDP Marketing Jane Goh jane@mdec.com.my (outside Malaysia)

CDP Innovation Norizham Abdul Razak norizham@mdec.com.my Media assisTaNce:

Word Labs Media: 27-1, Metro Centre, Jalan 3/146, Bandar
CDP TÜV STAR* Jezamin Abdul Razak jezamin@mdec.com.my Tasik Selatan, 57000 Kuala Lumpur Tel: +603-90564770;
Fax: +603-90564771, E-mail: admin@wordlabs.com.my;
CDP Professional Development Aiza Zeyati Zamani aiza@mdec.com.my URL: www.wordlabs.com.my

2 | Maximising Your Potential | January-February 2010

 List of our
Professional
programmes
Development
» As the ICT industry continues
to grow, the demand for skilled
ICT professionals is increasing
even more. ICT Professionals
need to keep abreast with emerging
technologies to remain competitive in
the global market.
» Therefore, MDeC has launched the
CDP Professional Development (CDP PD)
to enhance capability and skills of local
ICT professionals.
QMS
» If the next step in your company’s
business goal is to advance in the global
market, you will probably be looking to
improve the processes and practices
in your organisation to surpass high
standards of quality.
» CDP QMS will get you started in the
journey to process excellence. It provides
assistance to MSC Malaysia Status firms
in implementing and adopting the ISO
9001:2000 certification.
ITSM
» One of the key challenges faced by IT
managers today is to provide IT services
that will cross many platforms to
work cohesively with all core business
functions internally and externally. If
this is one of your major considerations,
perhaps you should think about
implementing industry best practices
in the area of Information Technology
Service Management (ITSM).
» ITSM is an approach that combines
proven methodologies and process
management frameworks.
ISMS
» Today, Information Security is no
longer just a technological problem
BUT a business issue. Information is
an asset, which, like other important
business assets, has value to an
organisation and consequently needs to
be suitably protected.
» The surest way to address this issue
would be by adopting a holistic and
proactive approach to security. One
such internationally renowned best
practice or standard that can be looked
at as a guide would be is the ISO 27001
standard.
Six Sigma
» Reducing defects in your products
is part of achieving good standards
of quality control. What if there was
a system or method in which you can
further minimise product defects?
» If you are looking to achieve or
implement a ‘zero variation’ policy in
your company, the Six Sigma system
can help.
Software Testing
» Performing thorough testing on new
software product usually comes with
certain limitation; either it requires
complex processes, highly skilled staff
or expensive equipments.
» For an easy, all-in-one solution to
enhance the quality of your product,
CDP Software Testing offers you
the perfect solution through its
programmes.
Project Management
» Project Management is crucial to
an organisation in achieving strategic
objectives. It is recognised that
successfully managed projects will
increase productivity, bring Return on
Investments (ROI), increase profits and
improve customer services.
» The Project Management Professional
(PMP®) certification issued by the
Project Management Institute is
the most prestigious and globally
recognised project management
accreditation worldwide.
CMMI
» The New CDP CMMI programme is a
combination of the previous Software
Process Improvement Programme (SPI
Programme) and the Quality Excellence
for Software & Technology SMEs
Programme (QuESTS).
» The programme is specially designed
to create awareness about the CMMI
Model among the MSC Malaysia
companies; with the ultimate goal
January-February 2010 | Maximising Your Potential |
KNOW US
of these companies to be
successfully appraised with the
CMMI Maturity Level Rating.
Marketing
» A sale usually does not happen
the minute you knock on the door. It
usually takes time to establish contact
to close the sale. It is critical to look into
your urgent marketing issue.
» CDP Marketing is designed to meet
the needs you have. It prepares a
platform for idea generation and for
professional development in marketing
in the ICT field for MSC Malaysia
Status companies as well as the ICT
industry.
Strategy & Management
» As competitive environment
changes and becomes fierce,
Business Strategy of a company
becomes the most important thing
to develop.
» The programme is designed to
increase the Business Strategy
capability of the MSC Malaysia
companies as well as the general
Malaysian ICT companies.
Leadership
» Leaders are the change agents
guiding their followers and along the
way, grow them and develop them. For
an organisation to be more competitive,
leaders can make the change.
» CDP Leadership will provide an avenue
for leaders and future leaders to hone
their inner leadership skills.
Innovation
» ASTRA – The Alliance for Science
& Technology Research in America
defines that Innovation is a process by
which value is created for customers
through public and private organisations
that transform new knowledge and
technologies into profitable products and
services for national and global markets.
» This programme prepares a platform
for idea generation and creativity,
besides increasing increase awareness
of innovation approach & educate on
innovation understanding amongst MSC
Malaysia & ICT companies.
TÜV STAR*
» TÜV STAR* is a new and unique
evaluation and rating service developed
by the TÜV Rheinland Group.
» TÜV STAR* brings a new perspective
and solution to the evaluation of
corporate sustainability and social
performance.
Showcase
» CDP Showcase provides a suitable
platform for the increasing number of
MSC Malaysia companies for branding,
showcasing and promoting their
products to generate leads and to
increase sales.
3
Turbo Charge Your coMPetitive advantage
Adopt leading practices
and standards
by Datuk Badlisham Ghazali, CEO, MDeC
M
alaysia is in the midst of
transforming ourselves into
a knowledge-based economy
and the information and com-
munications technology (ICT) industry has
been identified as a focus area for national
development. The Multimedia Super Cor-
ridor (MSC) Malaysia was launched in the
1990s to be the key driving and guiding
force behind the growth and development
of the Malaysian ICT industry.
When the MSC Malaysia was first
launched, there were only around 300 ICT
companies in Malaysia. Today there are
over 3000 ICT companies in the country,
many of which are earning renown in global
markets. MSC Malaysia is proud to be the
home of over 2000 local and multinational
technology companies involved in various
ICT sectors such as outsourcing, software
development, creative multimedia, hard-
ware design, Internet-based businesses,
and support services.
Through our efforts, MSC Malaysia
has created over 90,000 skilled jobs to
date, and, by 2010, this number will have
grown to at least 100,000 jobs, especially
in creative multimedia, shared services
and outsourcing clusters. Sustaining this
growth and Malaysia’s future economic
competitiveness in the ICT sector is de-
pendent upon the educational readiness
of our workforce. The ICT industry is
one of the most dynamic industries is the
world today and ICT professions demand
life-long continuing education in order for
professionals to maintain the currency of
their skills and knowledge.
A critical challenge facing the Malaysian
ICT industry is that of finding, developing
and retaining skilled professionals. The
continuous education of workers and
professionals is a vital component for the
prosperity of a company.
In today’s information age, the shelf life
of technology is very short, and the skills
and knowledge of the past quickly become
out of date and no longer relevant. A
knowledge-based workforce must continu-
ously strive to equip itself with new skills
in order to meet the rapid changes and the
demands of the workplace.
To help the Malaysian ICT industry
address this challenge, MDeC launched
the MSC Malaysia Capability Development
Programme (CDP). CDP is an initiative to
raise internal competencies among MSC
Malaysia Status companies by providing
them with the awareness of and the means
4 | Maximising Your Potential | January-February 2010
to adopt global best practices and processes
to ensure their continuing competitiveness
in global ICT markets. CDP does this
through the “Get IT Certified!” Campaign
– a path to earning internationally rec-
ognised organisational and professional
certifications. CDP’s efforts provide Ma-
laysian ICT professionals with accessible
and affordable continuous education.
Certifications offer several benefits to ICT
professionals such as:
» Establishing unequivocal credibility of
expertise in a particular area,
» Proving that the professionals are com-
mitted to the subject matter they study,
» The process of achieving and maintain-
ing certification ensures that skills and
knowledge are current and aligned with
the needs of business, and
» Offering advantages for career develop-
ment.
Through facilitating the development
of a highly skilled workforce, CDP directly
contributes toward helping MDeC achieve
our three targets. Firstly, through raising
the skills and knowledge of the Malaysian
workforce we make our nation even more
attractive to foreign ICT investors as
they can now find the talent they need
locally without having to pay for costly
foreign workers. Secondly, by helping our
local ICT companies raise their internal
competencies, CDP is empowering them
to drive innovation and create exceptional
made-in-Malaysia products. And finally,
by providing Malaysian professionals
with affordable and accessible continuous
education, CDP is helping these individuals
improve the quality of their lives.
To ICT professionals looking for a way
to turbo-charge your careers, I urge you
to explore earning globally recognised
ICT certifications as a means to achieve
this. Your talents are the building blocks
of Malaysia’s future in ICT and CDP is
ready to help you achieve your greatest
potential.
“What they say”
Tee Kee Ming, MD (South East Asia) – Atos Origin
Services (M)
“With the ISO 27001 certification, we are able to
address our customers’ concerns with regards to
the confidentiality and integrity of their data. Also
we do realise the need to continuously enhance IT
professional skills among our staffs. That is why we
encourage them to pursue professional certifications that are related
to their daily work. This two combination – enhancing our skills and
process will surely improve our overall organisation’s performance.”
 Turbo Charge Your coMPetitive advantage

We can help you

get there …
by Ng Wan Peng, COO, MDeC

A
s Malaysia pursues our goal
of becoming a global ICT hub,
MSC Malaysia is very aware of
the need to develop the capacity
of our country to provide the infra and
info-structure to meet the demands of the
global ICT market. MSC Malaysia Capabil-
ity Development Programme (CDP) was
developed as one of the key initiatives in
the Multimedia Development Corpora-
tion’s (MDeC’s) efforts to encourage the
adoption of international best practices and
the development of internal competencies
among MSC Malaysia status companies.
CDP launched the “Get IT Certified!”
Campaign to encourage individual capabil-
ity development that focuses on improving
the skills and knowledge of ICT profession-
als in Malaysia.
A challenge facing individuals pursuing
professional ICT certifications has been
that of cost. Certain certifications require
candidates to sit for multiple exams that
then cause the total examination fees to
increase while other certifications require
candidate to travel overseas to approved
testing labs which causes them to incur
travel and hotel charges.
CDP works with several partners to find
ways to deliver accessible and affordable
opportunities for ICT professionals in
Malaysia to pursue certification.
A recent agreement between MDeC
and IMS Asia established the CDP-CCIE
Lab Preparation Programme that allows
Malaysian ICT professionals to earn the
Cisco Certified Internetwork Expert
(CCIE) certification at up to 83% less than
it would have previously cost.
“CDP also strives to offer Additionally, CDP Professional Devel-
additional benefits through opment (CDP PD) provides the following
monthly dialogues, seminars, financial assistance to significantly reduce
clinics and workshops to the burden on Malaysian ICT professionals
raise the standards and when taking up professional certifications
competitiveness of ICT as well as to encourage these professionals
industry.” to pursue multiple certifications.
Through the CDP PD reimbursement
scheme, Malaysian ICT professionals
who:
» Have successfully earned technology-
based certifications will receive reimburse-
ment of 75% of their total exam fees up to
a maximum of RM2,500.00,
» Earn non-vendor-based certifications
will receive reimbursement of 75% of
their total exam fees up to a maximum of
RM1,000.00, and/or
» Complete recognised training programs
will receive reimbursement of 50% of their
total training cost up to RM1,500.00.
ICT professionals seeking to receive
reimbursement of their exam fees from
CDP PD must seek prior approval from the
Programme Secretariat before beginning
their certification programme.
MSC Malaysia Status companies that
sponsor their Malaysian employees for
professional ICT certifications will also
qualify to receive the reimbursement.
Over 100 professional ICT certifications
are available through CDP PD among them
certifications from Cisco, Microsoft, Sun,
IBM, EMC and many others. ICT profes-
sionals who are keen to pursue certifica-
tions that are not listed by CDP PD may
approach the Programme Secretariat to
discuss further on the new certifications.
It is interesting to note that, from early
2009 till now, we have seen an additional
uptake of 300% in CDP PD participation.
CDP also strives to offer other benefits
through monthly dialogues, seminars, clin-
ics and workshops to raise the standards and
competitiveness of ICT industry.
Moving forward, MSC Malaysia Capabil-
ity Development Programme will continue
our efforts to facilitate the development of
a world-class workforce of highly skilled
and knowledgeable ICT professionals
in Malaysia. We urge all Malaysian ICT
professionals to take advantage of this
opportunity to further themselves.
More information can be found at: www.
mscmalaysia.my/cdp

Hasan Ganny Hanif, President (Malaysia Chapter) –
International Association of Software Architects (IASA)
“IASA and CDP share a common purpose to help the Malaysia’s
ICT industry adopt global best practices and to facilitate the
development of a world-class workforce. In return you will have
highly skilled and knowledgeable IT professionals. This indirectly
contributes to the national competitiveness. Together our efforts
have resulted in Malaysia taking the lead in promoting awareness and adoption of
sound IT architecture principles in this region and at the same time, playing a key
role in developing the new Certified IT Architect (CITA) professional programme.”
Jason Yuen, President (Malaysia Chapter) – Information
Systems Audit and Control Association (ISACA)
“ISACA has been encouraging the development and adoption
of leading practices and competencies in information security,
assurance and governance among Malaysian firms since 1984.
With 600 members here, we support the IT security community by
providing professionals with awareness and training.Through peer
networking we are promoting good practices standards, certifications and education.
CDP has been a key supporter of our efforts through awareness programmes and
incentives in assisting Malaysian IT security professionals adopt CISA and CISM.”

January-February 2010 | Maximising Your Potential | 5

ThoughT leadershiP
Succeeding in
economic downturn
By Dr Karl Ng
D
uring challenging times, the
knee-jerk reaction of most
companies is to tighten their
belts and knuckle down to work.
That’s not a bad idea, in the short term.
Cost controls and a rededicated focus
into business fundamentals can buy an
organisation that little bit of time it needs
to access the situation and to develop and
implement a survival plan. Every company
comes up with its own unique survival plan
but there is a single common theme shared
by all plans with any chance to succeed:
innovation. No matter the times, companies
cannot afford to remain stationary. In
today’s economy innovation is imperative
for corporate survival.
Whether it’s because of lessons learned
a decade ago during the Asian Financial
Crisis or because our companies have
6 | Maximising Your Potential | January-February 2010
always had to run lean and tight to compete
in global markets, Malaysian companies
are fairing better than many of their for-
eign rivals during the present economic
downturn. And their management is largely
aware that if their companies are to survive,
or possibly even succeed, over the next few
years then they must increase business effi-
ciencies, achieve prudent spending, explore
new ways to work, develop employee skills,
advance products and services, rethink
sales and marketing, and raise customer
satisfaction. The challenge everyone is
facing is crossing the gap between realising
what’s needed and achieving it.
Although management understands
the need for innovation and is able and
willing to commit resources to achieve
this the fact is that in 2009 most companies
don’t have the luxury of making multi-year
investments. They need quick wins with
ROI delivered as soon as possible. The way
they can achieve this is to be innovative
about innovation.
Global Standard Certifications are an
assurance that the certified organisation
has in place policies and processes that
are based on international best practices
and that meet the certification guidelines.
Achieving certification can be a signifi-
cant commitment of time and resources;
two commodities that are presently in
extremely scarce supply.
However, and this is where the in-
novative twist to achieving innovation
begins, organisations achieve certification
through the implementation of several
small changes and many of these changes
require minimal investment and yield rapid
ROI. It makes sense for a company that’s
looking for quick wins to adopt just these
parts of a certification.
But without all the parts my company
won’t achieve certification so what’s the
point? The points are simple:
» Each part of a certification is based on
international best practices of proven
value. There is no guesswork whether
these changes will help your company.
They will.
» There is a tried and tested structured
“What they say”
Anamika Singh, Head of Process Management –
Pentasoft Malaysia
“Since we began the implementation of best
practices like CMMI, it has given us the capability
to go global. Quality standards have led us to
participate in about 20 tenders. We competed with
global players with huge financial strength and
were successful in 8 of them with revenue of RM14+ million.”
methodology to introduce the new pro-
cesses and policies into your business
model. This means that the changes can
be realised quickly, with less cost and with
minimal disruption to workflow.
» There are defined metrics to measure
the results of new processes and policies
so that ROI can be quickly and accurately
determined.
» Components of a certification work
together so that the whole is greater than
the sum of its parts. By adopting well
chosen processes and policies it may be
possible to realise economies of scale and
synergistic benefits for even greater ROI.
» Adopting parts of a certification are an
investment that can be built upon toward
achieving full certification at a later time
when resources permit.
Every company faces its own unique
challenges but its possible and even desir-
able to find effective solutions from a
common pool of knowledge. The key to
finding a quick win is focus and specificity;
this is what the company will invest, this
is what the company will receive, with as
little ambiguity as possible.
Some areas management should look
at are in better cost management through
CDP Six Sigma, improvements in IT service
delivery through CDP ITSM, enhanced
marketing capabilities through CDP Mar-
keting, and great ability to transform new
knowledge and technologies into profitable
products and services for national and
global markets through CDP Innovation.
The value of global standards certifica-
tion is documented and well known. CDP
is a keen advocate urging Malaysian com-
panies to pursue and achieve certification
as a means toward business success.
Dr Karl Ng is the Head of Capability
Development Department of Multimedia
Development Corporation (MDeC).
His responsibilities include directing
the development and implementation
of capability development programmes
to enhance the competitiveness of MSC
Malaysia companies.
Dr Hiew Pang Liang, CEO – BT Multimedia M’sia
Building an innovation ecosystem and innovation
culture are key factors for success in this innovation
led knowledge driven economy. Through BT’s
participation in dialogues and workshops organised
by CDP, we have the opportunity to share and
exchange knowledge and views on innovation with
both industry experts and peers.
 Snap Shots

‘How To Change The Game of Doing Business ‘Social Media & Search Engine Optimisation
for A Profitable Growth’ (Workshop) In Maximising Business Growth’ (Dialogue)

Take
advantage
of CDP
incentives ‘Cost Optimisation with Supply Chain
‘CMMI for Services’ (Talk)
Visit www.mscmalaysia.my/cdp Management’ (Talk)

‘Enterprise Innovation through Architecture

Resilience’ (IT Architect Regional Conference 2009)

‘Six Sigma Green Belt’ (Workshop)

‘Best Practices in Restructuring for ‘World Class Breakthrough IT

Growth’ (Workshop) Solutions: Innovation’ (Dialogue)

January-February 2010 | Maximising Your Potential | 7

in brief
Flash back: Firms earn
global standards certs
M
ultimedia Development Cor-
poration (MDeC) recognised
the achievements of 47 MSC
Malaysia Status companies that earned
global standards certifications in 2008.
At a gala dinner held in Kuala Lumpur
early this year, representatives from the
companies received letters of recogni-
tion from Deputy Minister of Science
Technology and Innovation Y.B. Tuan Haji
Fadillah bin Haji Yusof and MDeC CEO
Dato’ Badlisham Ghazali.
In 2008, through the MSC Malaysia
Capability Development Programme
(CDP), 15 MSC Malaysia Status companies
were awarded a CMMI Maturity Rating; 19
companies earned certification in software
testing; four firms achieved the ISO 27001
certification, an Information Security
Management Standard; and five earned
CDP Roadshow in Penang
“Succeeding in the Downturn: Innovate
IT!” Seminar was held at the Equatorial
Hotel, Penang on April 30, 2009 in conjunc-
tion with the MSC Malaysia Industry
Briefing & Dialogue.
This is a series of briefings on how
companies can benefit from the financial
incentives provided by MDeC.
The seminar had attracted more than
100 individuals from 50 local and foreign
companies.
The audience had the opportunity to
8 | Maximising Your Potential | January-February 2010
ISO 9001 certification, a Quality Manage-
ment Standard. Four more MSC Malaysia
Status companies were honoured for
sending their personnel to earn individual
professional certification through the MSC
Malaysia CDP Professional Development
programme (CDP PD).
Badlisham said:
“It is not a coinci-
dence that in 2007 MSC Malaysia Status
companies that had participated in CDP
programmes achieved export growth of
79.18%, which is more that three times the
23.40% export growth of all MSC Malaysia
Status companies for that year.”
He added: “Through the efforts of
CDP, a June 2008 Software Engineering
Institute report ranked Malaysia 1st in
South East Asia and 14th in the world for
the number of CMMI-rated companies in
our country.”
In the thick
of action ...
Open forum
between the
speakers
and
attendees.
hear from the experts and consultants in
the area of innovation, business continuity
management and software improvement.
The seminar focused on how companies
can benefit from best practices during
current gloomy economic climate.
The event was concluded with an open
forum between the speakers and attendees
where numerous topics were discussed;
and the audience were attracted to ask
critical questions especially in the area of
innovation.
Les’ Copaque
production
victorious
Teams from the MSC Malaysia
status companies competed
in the first computer simulated
management game organised
by MSC Malaysia Capability
Development Programme. The
game was held on the 15th and 16th
April 2009 at Putrajaya International
Convention Centre.
“We found the game very
interesting as it is an eye opener
for us on how to run a company in
a different industry. What we learnt
may not be applied directly with
our daily jobs but we did learn a tip
or two which can be used in the
future maybe … for example, never
to buy other people’s information
as we felt that it could cloud
our judgments,” Mohd Safwan,
Production Director, Les’ Copaque
Production Sdn Bhd
MSC Malaysia
Management Game results:
Winner: Les’ Copaque Production
Sdn. Bhd.
First runner up: Prudential Services
Asia
Second runners up: Multimedia
Development Corporation Sdn. Bhd.
(Host)
Second runners up: ALCIM Sdn Bhd
IT security risks
are for real
As part of its on-going efforts to
develop the internal capabilities of
MSC Malaysia status companies and in
conjunction with National ICT Month,
MSC Malaysia Capability Development
Programme (CDP) organised an IT
Security showcase at the MSC Malaysia
Innovation Centre in Cyberjaya.
The month-long showcase – which
began on July 30, 2009 – focused on
making Malaysian companies aware of
the IT security risks they face in today’s
connected world and the realistic and
cost-effective steps that can be taken to
manage these risks.
The showcase brought spokesper-
sons from leading MSC Malaysia status
security firms and industry consultants
to address delegates on a range of IT
Security related topics. Participants also
benefited from networking opportuni-
ties over lunch and through a guided
tour of the showcase that facilitated
knowledge sharing and information
dissemination about current global best
practices, the latest methodology and
emerging trends in IT Security.

MSC Malaysia companies see great
savings through Six Sigma
U
p to 21 participants from 12 MSC Malaysia
companies have graduated from MSC
Malaysia Six Sigma Programme, which
was conducted as training-led consultancy for a
duration of four months in 2009.
The Green Belt training programme was
conducted in three modules with a total of
seven days from July to Oct, 2009. The training
utilised a transactional simulation to create a
problem and demonstrated application of DMAIC
methodology in solving it. The main objective of
the training is to equip all the participants with
Lean Six Sigma skill set to enable them to make
continuous improvement in their own area.
The Green Belt Programme was initiated
early of the year in response to the request of
MSC Malaysia community to assist them in the
challenging year of 2009, MDeC COO Ng Wan
Tribute to a dedicated Technopreneur
MSC Malaysia joins YGL Group and its
staff in saluting Yeap Kong Tai – a much-
respected figure in the Malaysian ICT
scene. The former COO of YGL passed
away on April 27, this year. He was 46.
Yeap played an instrumental role in
YGL’s success in obtaining a CMMI certi-
fication, helping the company to go truly
global. With the certification, YGL was
able to standardise, improve processes and
performance to ensure quality service and
solutions to its customers.
Humphrey Ho, Group Marketing Man-
ager of YGL, said: “As the founder of YGL,
Yeap was a great leader. Over the years he
had instilled in his staff’s mind to persevere,
learn and be willing to accept changes.”
Yeap also paved the way for YGL to
attain Information Security Management
System (ISMS) certification before his
untimely death.
Ho said: “As YGL grew – data and IP
assets had be protected in a secured zone.
And to ensure it, there was a need to achieve
ISMS and Yeap clearly understood and
pushed for this. Today, YGL is able to
increase the confidence level of customers
towards our company.”
He added: “Yeap is truly a visionary
in brief
Facts and Figures
Analyse This!
The high-profile The
Green Belt training
One for programme has led to:


the album i. Paradigm Systems
... The Berhad
 saving RM 1.3
participants
million by improving
are all
smiles
their total resolution
at the time for
 support
graduation service.
ceremony. ii. Mexter
MSC Sdn Bhd
Peng said at the Graduation Ceremony held on saving 
RM621,000
Nov 25 in Putrajaya. by improving their
Wan Peng said: “This programme has indeed average software
helped companies attract investors and build client deliverables’ delivery
confidence, besides enhancing competencies.” time.


She added: “I sincerely hope that the partici-
pants will continue to strive for improvements even iii. EA Consulting
though they have completed the programme.” Asia
Pacific Sdn
Conducted by CDP – the event was one of the Bhd (eacap) saving
20 specific programmes organised throughout RM145,000 by
2009 in key areas for “quick-wins” such as in reducing bid iterations,

customer service, systematic innovation, cost errors and resource
optimisation, process improvement, product over allocation of their
performance enhancement, brand management RFP activities.


and others. iv. 12 participating
About 250 companies have benefited through companies 
seeing
these series of programmes to assist them in total projected savings
weathering current economic situation. of RM 3.13 million.
Upon his return to Malaysia, he joined
YGL Consulting in 1993 as a Director,
initially overseeing the consulting business,
and thereafter directing the Group’s own
software development and deployment
and the setting up of YGL Multimedia
Resources Sdn Bhd.
At the age of 42, he was appointed as
the COO in YGL Convergence on June 1,
2005. YGL Convergence is principally an
investment holding company having two
wholly owned subsidiary companies, i.e.
Yeap (centre) receives the CMMI YGL Consulting and YGL Multimedia.
certificate from Chairman of MDeC It was incorporated to be the investment
Tan Sri Abdul Halim Ali (left) and Dato’ holding company of the Group in conjunc-
Badlisham Ghazali, CEO of MDeC in this tion with the listing of the Group on the
Dec 14, 2006 file picture. MESDAQ Market.
He was very active in the software
leader and has always guided and encour- industry and partakes in the development of
aged us to move forward. With that, the local software industry through identifica-
team is able to adapt to challenges to drive tion of new technologies, new markets and
his mission.” growth areas/clusters.
Yeap was born in Penang, Malaysia He was one of the founders of the
in 1963. He graduated from University of Software Consortium of Penang (SCoPE),
Melbourne in 1985 with a double major in which was established in 2003.
Accounting and Computer Science. In 1986, In 2007, he represented SCoPE to sign
he began his career with Price Waterhouse an MOU with Multimedia University, aims
Malaysia and was subsequently seconded to in order to enhance the industry-academia
Price Waterhouse Australia in 1987. partnership.
January-February 2010 | Maximising Your Potential | 9
Quick Facts

Do
Gap between Four Malaysia is way behind
and Six Sigma Malaysia’s national software test-
Most companies still work in a Four Sigma ing board (MSTB) claimed that

kn yo
environment that roughly produces 6210 software testing in the region is 30
failures per million transactions. General years behind the times. Common
Electric estimated that the gap between practices need to be raised to the

Four Sigma and Six Sigma was costing them
between US$8-12 billion per year.
Source: Six Sigma Online
ow u
next level of best practices as set
by the International Software
Testing Qualifications Board
(ISTQB).

?
ISMS: Giving you Source: Malaysia Software
a ‘peace of mind’ Testing Board (MSTB)
Senior management is aware that it can
never have a 100% secure environment, Soft skills critical
while ISO: 27001 provides the “peace of to long term career
mind” that ISMS is risk base and built on Study found that 75% of long term career
continuous improvement where proactive success depends on soft skills and only 25%
approach had been taken to minimise the on technical knowledge.
risk of securing beaches occurring.
Source: Ultima Risk Management
Weightage to Career Success
Online

Branding: A major
challenge for ICT players
Marketers agreed that balance marketing
effort is a major concern for ICT compa- 75%
nies, with half of the respondents ranking Soft Skills
branding with increased competition
and lead management as the top three
challenges. 25%
Top 3 Challenges: Technical
1. Branding Skills
2. Fierce Competition
3. Lead Management
Source: HayMarket Media, 2009, Brand-
ing a major challenge to ICT industry
Do not ignore quality failures
Source: Stanford Research Institute and Carnegie Expertise of cost of poor quality (COPQ)
Melon Foundation have estimated that defective or unsatisfac-
immense cMMi benefits
tory product have cause losses about 20 to
Benefits Supported by 30% of company’s annual gross sales.
Reduced costs 10% decrease in overall Northrop Grumman Source: MetricStream Inc, 2009 What
cost per maturity level is Your Company’s Cost of Poor Quality
(CoPQ) – Tools for calculating and reducing
Faster Schedules 50% reduction in release Boeing it.
turnaround time
Greater Value of project
Productivity 25-30% increase in Lockheed Martin, Harris, management practices
productivity within 3 years Siemens to organisations
Organisations state that project man-
Higher Quality 50% reduction of software defects Lockheed Martin agement practices greatly assist the
standardisation of practices, processes
Customer 55% increase in award fees Lockheed Martin and terminology, which helps company
Satisfaction activities to function more efficiently and
Source: Northrop Grumman Corporation. Achieving the Promised Benefits of CMMI smoothly.
Challenges of ISO QMS 44%
certification 45
According to a Japanese study, following
findings were factors that cause downward 40

spiral for QMS adoption in recent years: 35

•  Focus on certification, not quality 27%
30
•  Certification becomes a commodity
20%
•  Pressures from direct customers 25

•  Prices (auditor days and day-rates)    20

driven down 10%
15
•  Difficulty in recruiting competent    
auditors 10
•  More ‘superficial’ audits 5
•  Loss in confidence of customers
Source: Master Builders 0
Standardisation Repeat business Greater project Greater
of practices, and client transparency innovation
processes and satisfaction
terminology

Source: Project Management Institute, April 2009

10 | Maximising Your Potential | January-February 2010

 IncentIves / LinkS

USEFUL
LINKS

The Carnegie Mellon Software

Engineering Institute (SEI)
www.sei.cmu.edu/cmmi

International Organisation for

Standardisation

CDP Incentives www.iso.org

CyberSecurity Malaysia
Programmes Adoption Pre-Adoption Awareness www.cybersecurity.my

CDP CMMI SIRIM

& CDP www.sirim.my
Six Sigma Upon completion,
programme participants BSI Management Systems
are reimbursed with 50% www.bsigroup.sg
ormaximumofRM100,000 •Dialoguesheldtointroduce
of total project cost, programme domains with TÜV Rheinland Malaysia
whicheverislower. •Workshops experienced consultants, www.tuv.com/my
to help participants certified companies and
Upon completion programme acquire in-depth certification bodies The Chartered Institute of Marketing
CDPISMS& participants
participantsarereimbursedwith
with knowledgeinthe
knowledge ••Participantsareprovided (CIM)
CDP ITSM 50% or maximum of RM50,000 chosen programme opportunities to participate www.cim.co.uk
oftotalcertificationcost, ••Clinicsforone-on-one inlocalorinternational
in
whichever is lower consultancy conferences held in Malaysia Information Systems Audit and Control
•Training-led Consultancy Association (ISACA) – Malaysia Chapter
sessions for in achieving www.isaca.org.my
project goals
CDP QMS Upon completion programme IT Service Management Forum –
participant is reimbursed with Malaysia Chapter
50% or maximum of RM10,000 www.itsmf.org.my
of total certification cost,
whichever is lower Outsourcing Magazine
www.the-outsourcing.com
CDPMarketing,
CDP Strategy, Service Desk Institute
CDP Leadership www.hdi-atp.com
& CDP Innovation NA
The Chartered Institute of Management
CDP Showcase Opportunity to promote products Accountants (CIMA)
and services at the renowned MSC www.cimaglobal.com
Malaysia Innovation Centre
Project/Open – open-source, internet-
based ‘Project-ERP’
www.project-open.com
CDP Professional Development PHProjekt – an open-source, internet-
(Individual Incentive) based groupware suite
www.phprojekt.com/index.php
Technology based certification Non Vendor based certification
DotProject – open-source, internet-based
75% of total exam(s) fees leading to certification 75% of total exam(s) fees leading to certification www.dotproject.net/index.php
or maximum of RM2500 per participant ; or maximum of RM1000 per participant ;
whichever is lower whichever is lower ProjectWeb
www.infograph.com/web-project-
management.htm

Basecamp
(Company Incentive) www.basecampHQ.com

Training track Certification track Non Vendor based certification Infowit Creative Manager
www.infowit.com
50% of total training(s) cost or Technology based certification 75% of total exam(s)
maximum of RM 1500 per participant; 75% of total exam(s) fees leading fees leading to certification or Project.Net
whichever is lower to certification or maximum maximum of RM1000 www.project.net
of RM2500 per participant ; per participant ;
whichever is lower whichever is lower Business Technovise
www.biztech-i.com
‘Participants’refers to MSC Malaysia status organisation or its employees
For more information on latest incentives and qualifying criteria, log on to www.mscmalaysia.my/cdp

January-February 2010 | Maximising Your Potential | 11