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TEKsystems sought to maximize our business value, drive long-term cost savings and increase efficiencies for one of our largest and oldest clients by transitioning our existing on-site tool support to an off-shore model.
The client, a leading property and casualty insurance provider in the Midwest, has more than 70,000 employees and 18,000 agents in North America. With coverage across the U.S. and Canada, the client offers private automobile insurance, home insurance and—through partnerships—life as well as non-medical health insurance. TEKsystems has partnered with this client since 1995.
Apache Tomcat, IBM DB2, IBM WebSphere, RedHat® Enterprise Linux, various open source tools (e.g., EAR, Jenkins, Subversion, TRAC)
Client-developed application, Enterprise JavaBeans, Java 2 core language, various open source tools (e.g., CASCADE, RSA, TestLink), WebServices
Off-shore IT solutions can provide businesses with significant cost savings, as well as time and productivity efficiencies, but companies often hesitate because of the risks that accompany transitioning work to an off-shore third-party provider. It can be challenging to ensure proprietary knowledge is effectively shared with the off-shore team. Beyond transferring the knowledge, it is also critical that the new team handling the work understands the processes, procedures and technical nuances of the required IT tasks, as well as the company’s business culture. And just as important as transferring knowledge and processes is minimizing disruption of service during the transition period.
Companies are seeing the tremendous value that can be derived from introducing off-shore models into their IT environment. However, it does not make sense to move all IT operations overseas. Businesses need to define the types of work that can be carried out off shore, based on their overall IT priorities and business goals. One common best practice is to keep strategic and differentiating IT functions in house, while moving non-differentiating operations off shore. This enables internal IT departments to dedicate themselves to their core areas of expertise that align with the business priorities while handing off the less strategic tasks to cost-effective providers.
The client, a leading insurance provider, worked with several IT service partners with off-shore capabilities in an effort to drive efficiencies; the client’s off-shore footprint spanned approximately 3,000 resources. They wished to find more opportunities to move non-differentiating IT tasks off shore, such as testing or service desk work—activities that keep the lights on at the business, but do not necessarily provide a distinct business value. The client aimed to evaluate their current IT profile to identify the critical business activities that directly enable them to sell more products and provide unique customer experiences. The client defined these functions as differentiating to their business, and they wanted to ensure they internalized and maintained ownership of those critical activities while lowering costs by enabling vendors to take ownership of non-differentiating IT tasks.
TEKsystems’ IT professionals accounted for more than one-third of the client’s on-site IT team, a group within their overarching infrastructure organization. The IT team was responsible for delivering infrastructure support for the client, including network administration and support; service desk, help desk and desktop support; and applications support and service. The majority of the work provided by the IT team was deemed to be non-differentiating, making it an ideal fit for an off-shore solution. Notably, the practicality of this solution is not unique to our client.
Why? Consider applications support at any company. The expectation is when this type of support is needed, incidents are resolved in a timely fashion so that business can continue as usual. Applications support ensures day-to-day operations run smoothly with minimal disruption. While this type of support is critical to the organization’s ability to function properly, it does not generally transform the business or directly impact sales and revenue. However, the rollout of a new customer relationship management tool such as Salesforce.com could drive revenue and sales, and thus would be treated as an implementation that is differentiating for the business.
Over the long-term, transitioning the IT team’s functions off shore would allow the client’s IT department to provide a greater level of support to strategic IT functions, while driving additional cost savings from outsourcing non-differentiating activities. Although TEKsystems was a preferred partner for delivering on-site support, including providing about 300 consultants to work within IT, we were not included as an approved off-shore provider.
To move from a non-approved off-shore provider to a vendor the client would leverage off shore, TEKsystems would need to become recognized by the client’s vendor management organization (VMO), a group that governs service provider relationships with enterprise customers. Vendor management is responsible for determining which service partners the client works with, the type of work each vendor can perform, and how the work will be distributed across the organization’s core providers based on how each provider’s competencies and capabilities align with the client’s strategic direction. The vendor management organization uses insights from industry experts from the analyst community (e.g., Gartner and Forrester) to inform their decisions regarding service provider utilization. Industry analysts understand which providers have the strongest level of capabilities to perform various types of services, and this knowledge brings confidence and credibility to the decisions made by vendor management teams.
At the time of this engagement, TEKsystems was not recognized by the analyst community for our off-shore capabilities. Our overseas presence was relatively small compared to competitors whose primary focus was delivering off-shore solutions. The client knew TEKsystems for our widely recognized, high-quality IT staffing services, but they eliminated us from consideration for off-shore services because they did not view our off-shore maturity to align with other providers in this space. However, we had well established off-shore capabilities, and our facilities in India had over 1,000 employees, and were run using best-in-class methodologies for planning, managing and implementing IT solutions. With specialized focus on application development and management, data management, and quality assurance and testing, we were confident our India-based facility in Bangalore would provide unique value to the client.
Realizing that transitioning our team off shore would be a strategic decision that could drive tremendous cost savings and efficiencies, TEKsystems spent over two years helping the client understand the potential value of our support in this capacity. Because we have a long-standing partnership with the client, one of our largest, we offered first-hand experiential knowledge about the organization and a deep understanding of its environment. Although the client was originally uncertain of our ability to seamlessly move certain functions off shore, we were able to find areas where off-shore support would be not only feasible but highly strategic, such as with tool support. In order to position ourselves to the client as not only an on-site services provider, but also a valuable off-shore partner, we developed numerous proposals detailing our approach to effectively deliver an off-shore model; over time, this enabled us to gain buy-in from IT senior leadership, who ultimately could influence the client’s vendor management decisions and the evolution of their relationship with TEKsystems.
TEKsystems proposed delivering off-shore Level 2 support out of our Bangalore facility, the TEKsystems Whitefield Solution Center. Under a continuous service management structure, we would establish an off-shore team that would provide second-level support for the client’s tool support environment. Our recommended custom solution would be scalable, enabling us to ramp up or down the number of resources as needed. The TEKsystems Global Delivery Management Team would provide ongoing oversight and communication with the client.
We would implement a phased approach to effectively transition the tool support team off shore:
With approximately 37 percent of the client’s on-site IT team composed of our consultants, TEKsystems knew the client could achieve unique benefits by partnering with us for an off-shore tool support solution, and positioned these benefits to the client:
More than any other provider, TEKsystems’ resources accounted for the majority of the client’s IT team. We knew the work better than anyone else. Extending the tool support off-shore to another provider could compromise the team’s ability to deliver to desired service level agreements.
Because we had the strongest understanding of the specific work and client environment, transitioning the tool support work off-shore with TEKsystems promised limited risk and maximum efficiency. In comparison, if the client were to transition the work to a different company, there would be a learning curve and a risk of service downtime or disruption until the new team was up and running. Engaging in an off-shore relationship with TEKsystems would enable the client to retain its current knowledge base, subsequently driving cost savings.
In addition to our proven knowledge transition methodologies, TEKsystems offered a Bangalore-based facility, the Whitefield Solution Center, that could support the work. Our facility would offer the client peace of mind through our advanced security systems, uninterrupted power supply, redundant network connectivity, and resiliency and disaster recovery capabilities. With areas of expertise, including application development and management, network infrastructure services, and quality assurance and testing, TEKsystems’ solution center would be a perfect fit for off-shoring its tool support team. TEKsystems also invested in our infrastructure and matured our facilities due diligence as requested by the client. Specifically, we obtained SSAE 16 certification and established new security protocols to meet the client’s requirements.
TEKsystems shared our proposed solution for transitioning the work off-shore to client executives, including a number of vice presidents. We articulated our vision, and the client began to realize the benefits and value this model would provide. With backing from IT leadership, the vendor management organization reconsidered including TEKsystems in their group of approved off-shore providers and eventually, after more than two years, we received approval to conduct off-shore work and were selected for this engagement.
TEKsystems proved to be an ideal partner for this engagement. We have a deeply rooted relationship with the client that was established in 1995. Approximately 1,100 total TEKsystems consultants support the client at any given time, including about 300 consultants dedicated to the IT team. Our time-tested partnership has brought us extensive experience screening, selecting and hiring tool support resources with the skills demanded by the client. Upon being selected, we successfully initiated the transition of the tool support team off-shore as described in our proposed approach.
In sequential order of our recommended phases, we began by identifying the subject matter experts (SMEs) that were already performing the work on site at the client’s campus. We collaborated with those SMEs, our solution executive team and the off-shore team on a number of discovery calls. From there we worked with the on-site SMEs and off-shore team to develop a plan for supporting this work. Our plan was presented to client leadership, and once we received their approval of our approach, we brought three team leads from our Bangalore facility over to the U.S.
The Bangalore team leads spent five weeks at the TEKsystems domestic off-site development center working with local TEKsystems SMEs to ensure they were effectively trained, coached and mentored on the required work. The Bangalore team leads returned to the TEKsystems Whitefield Solution Center in India to begin building their teams to support the engagement. Based on what was learned during the five weeks in the U.S., the leads implemented a train-the-trainer model; they had a deep understanding of the work and they built a team around them and the project requirements and skills needed. The off-shore tool support team consisted of six people initially, with the expectation that as many as 18 resources would be supporting our off-shore model by the end of the first year. The majority of the team was divided into two roles: (1) infrastructure support, including Linux and WebSphere skill sets; and (2) development, including competencies in open source tools and Java development.
Meanwhile, the on-site SMEs at the client were transitioned to TEKsystems and are performing as on-site coordinators, working closely with our global delivery manager and global delivery organization to be the face of our work and on-the-ground point of contact for our off-shore work. With all the training completed, the TEKsystems team will continue to support this effort through Transition, Stabilization and Steady State.
As a result of our off-shore support, the client was able to recognize key values to the business:
TEKsystems realized an opportunity for the client to significantly reduce their costs by leveraging an off-shore model. We noticed an area of high density within the client organization, where not only did our consultants have a majority presence, but also the work they were doing was deemed non-differentiating to the business. From there, we knew there was a way we could provide greater value to the client, limit disruption of business and mature our relationship beyond staff augmentation. Ultimately, it was our ability to identify this opportunity and present it to the client that enabled them to recognize the long-term benefits of transitioning the tool support resources off-shore with TEKsystems’ support.
Although the client had taken advantage of the benefits off-shore delivery can provide in other areas of their business, our team delivered support on site. TEKsystems recognized that the tool support team was providing non-differentiating activities that helped keep the lights on for the business but was not part of their core business mission, making this group a valid option for transitioning to an off-shore delivery model. We took the initiative to identify this opportunity to drive long-term cost savings for the client, which they may not have otherwise realized.
The client had a list of approved off-shore providers on which TEKsystems was not included. Upon recognizing the additional business value we could provide to the client by transitioning the tool support team off shore, we were determined to do whatever was necessary to achieve approved off-shore provider status. Over numerous proposals and more than two years’ time, we positioned the benefits to the client and eventually gained buy-in from leadership. With leadership backing, we were able to earn approval from the client’s vendor management organization as an off-shore provider.
It is because TEKsystems has cultivated our partnership with the client since 1995 that we were able to build a long-term case for them to trust our off-shore capabilities. We were an established provider with a proven track record of delivering high-quality resources, sound service management and measurable outcomes. Our history as a reliable, credible and quality-focused provider enabled us to continue doing work with the client year after year. And because of this work, we were able to recognize areas where they could increase value, reduce costs and drive efficiency via an off-shore solution for the tool support team.