Agil Discussion

Pricing Models Prevalent in Industry

Conventional Models Input based Models Alternate Models Output or Outcome

based Models

Dedicated Team Time and Material Fixed Price Hybrid Output Based Consumption Based
Outcome Based
(T&M)

Examples of Consumption Application Service Delivery Unit

Ticket Based Device Based
based Models Based Catalog Based Based

Major Challenges Major Benefits over Conventional Models

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•2Operational overhead: Too many statement of work (SoW), Invoice reconciliation • Shift focus from ‘resources’ to ‘results’
• Difficult to measure productivity improvements/YoY cost reductions • Reduced Overhead when compared to the existing models (different types of
• Unpredictable demand governance)
• Downstream team low utilization due to upstream delays (e.g. Upstream – requirements, • Incentives for continuous improvisation
Design, Build, Downstream - QA) • Transparency in reporting
• Lack of Cross utilization of resources and thereby higher cost for testing • Improved cross utilization
• Low oversight efforts from customers

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 What's the industry view on sourcing models?

Future tech and innovative products and applications

Rapidly changing business requirements
Systems of Requires high level of business collaboration
Innovation
RAPID

Unique company differentiation applications

Systems of Industry specific capabilities
Differentiation Need reconfig and functionalities every once in a while

OW
Application Landscape Packaged applications or legacy applications
SL
Systems of Managing Org’s data
Record Rate of change is low
Subject to regulatory requirements

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 Contextualized delivery model strategy
Cognizant recommendation is to use below framework to arrive at the delivery model for each area

Our approach for delivery of services across all quadrants

Location Strategy (Where)

less predictable
Fast changing,

less predictable
Onshore / Nearshore

Fast changing,
Nearshore/Offshore
Intensive
Time to Market criticality , Predictability of the requirements

Time to Market criticality , Predictability of the requirements

Speed and agility Transform & Innovate
Service / Commercial Construct (With)
E.g. Cloud Migration, Data Migration System of innovation Managed capacity, Co-Sourced, Managed
E.g.: Voice channel launch, mobile app Output capacity

• Integrated planning
• Agile / DevOps delivery model
• Joint Governance & Partnership model
Slow moving and

Slow moving and

• Metrics & KPI Driven engagement,
Quality tollgates
predictable

predictable
• Effective Knowledge Mangement
Scalable & Cost Efficient Resilient and cost efficient
System of Record System of Differentiation
4
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E.g.: Infrastructure services, E.g. Legacy, Core retail Managed Service capacity/Outcome
Application support modernization
Offshore Intensive Offshore/Nearshore

Non-Differentiating Differentiating Non-Differentiating Differentiating

End Customer value derivation
End Customer value derivation

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 Right-shoring - Onsite/Nearshore/Offshore Consideration
Guidelines

Important Consideration Onsite Nearshore Offshore Remarks

Parameters
Proximity to Business Ease of collaboration; Intensity of interactions with
business and other interfacing parties

Regulatory Constraints (GDPR/Data Access to Production environment & customer data

transfer)
Cultural Alignment with client Teams and leads already have knowledge and
good alignment of working with the client

Availability of Talent Larger talent pool in Nearshore for specific skills

like Full Stack development. Scale across tech
stacks in offshore

Scaling up of teams More maturity of Squad based model, Faster speed

of setting up teams in Nearshore and offshore

Cost Arbitrage Cost effective resource rates at Nearshore

compared to Onsite resources

Time zone difference Nearshore time zone and offshore time difference is
less

High Average Low

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 Sourcing Model transformation from Output to Outcome Journey
Current
Staff Augmentation
Indivdual Team Members / DevOps Team
Structure
Individuals / People Oriented
• Cognizant augments the staff by providing
personnel with specific skills
• Client manages the day-to-day work
assignment of the staff and is responsible
for the overall project/operations
• Cognizant’s service is measured based on
the turn around time in provision of staff,
quality of staff provided, performance of
staff, longevity/retention of staff, etc.
Delivery
Ownership
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Intermediate Next
Co-sourced teams
Output based Sourcing
DevOps Team High Performance
DevOps Team High Performance
Structure Teams
Structure Teams
Step 1: Team Structure
Step 1: Team Re-composition
• Review the team composition
• Review the team composition
• Focus on T-shaping + fully Agile WoW
• Retain key roles in client eco system
• Focus on T-shaping + fully Agile WoW
Step 2: KPI Based Results
Step 2: KPI baselining
• Identify key metrics to be tracked and reported • Introspection and re-calibration of team capability
• Backlog based team re-organization / skilling
Step 3: Self-Sustaining Teams
• Self-steering teams, with PO/BA playing a Step 3: Self-Sustaining Teams
seamlessly integral part of the team • Self Organizing team
• Management from Cognizant • Self-forming teams
• Self-steering teams, with PO/BA playing a
Step 4 : Governance seamlessly integral part of the team
Robust governance process to ensure that there is
enough visibility and transparency on backlog, progress, Step 4: “Output” Implementation
milestones, risks. • KPIs and Objectives to have a composition of
efficiency and effectives KPIs
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Step 5: Knowledge management • Baseline the targets by looking at the team’s
Have mechanism in place to ensure there is ease of KM performance and limitations for a quarter
and Knowledge is retained as a team and not in • Commit for Targets after the baseline period
individuals
Cognizant
Client
 Our Overarching framework for the success sourcing models

Right shoring strategy

‘To determine the
optimal location for
projects’

PROCESS &
TECHNOLOGY
‘Blueprint’ to enable and ENGINEERING
implement Output based OUTCOMES
Measuring alignment
sourcing to vision and goals

TEAM STRUCTURE
GOVERNANCE
Defining the Squad
Composition Roles Ensuring adoption with the
7
& Skills right mind-set for success

Strong Supporting Ecosystem - Guilds | Communities | Studios | Partnerships

Engineering Workforce – Acquisition and Transformation

Talent Mgmt.| Sourcing Pipeline| Customized Onboarding
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 STRUCTURE Defining the Squad Composition Roles & Skills

Establish highly skilled squads that have clear accountability with committed outputs.The focus is to enhance
engineering quality and productivity while optimizing costs

Multi-disciplinary, cross-functional product delivery unit,

Business / Test
Automation founded on a distributed workforce
Solution
Architect Engineers
Core members are SMEs (Subject Matter Experts) that have the business
and technical know-how , leadership, and communication skills to drive team
toward success.
Developers /
Squad DevOps
Product Squad teams will commit on specific KPIs that is aligned with tribe and area
Engineers /
Owner goals
Functional &
Technical
Consultant

The Core “DNA” of the teams intersects Technical expertise and

Functional
POD Lead / intimate business and domain knowledge
Lead/SM Technical
Lead

Business
Analyst

Business Analyst can be also from client

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