Co-Sourcing – First Principles First; Simple Best

Co-Sourcing – First Principles First; Simple Best practices to get the most out of an outsourcing relationship

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Copyright © 2011 IAOP. All Rights Reserved.

• Hexaware Overview• Legg Mason Overview• Engagement Overview• Benefits Derived• Lessons Learned

Agenda


Proximity CenterDelivery CenterSales Office

Singapore

Sydney

TokyoMumbai

PuneChennai Bangkok

Frankfurt

London

Paris

Brussels

DubaiSan Jose

Chicago

Toronto

Boston

New JerseyAtlanta

MexicoBengaluru

Nagpur

• Leaders category for The 2010 Global Outsourcing 100 by IAOP

• Ranked N0: 18 in the NASSCOM’s Top 20 IT Service Providers India

• Best Employers for five consecutive years (2005 – 2009) -Data Quest IDC

• Top 100 Innovative service Provider by Global Services

• CIO 100 Ingenious Award

6500 Employees globally

60+Fortune/Global 500 clients

32Offices worldwide

174Active Clients served worldwide

231.2USD mn Revenues in CY ’10

Delivery centers in Mumbai, Chennai, Nagpur, Pune, Mexico, Bangalore, New Jersey

Industry Recognitions

Golden Peacock Award

CertificationsCMMI Level 5, ISO 27001, PCIDSS

Hexaware Overview: Key Facts


• A diversified global asset management firm, founded in 1899

• Headquartered in Baltimore, Maryland, USA

• $672 billion in assets under management as of December 31, 2010

• Approximately 3,550 employees with 34 offices around the world including New York, Miami, London, Tokyo, Singapore, Hong Kong and Australia

• Principal affiliates include: Western Asset Management (Fixed Income), Permal Group (Fund of Hedge Fund), Royce and Associates (Small-Cap), ClearBridge Advisors (Equity), Legg Mason Capital Management (Equity Value), Brandywine Global (Fixed Income, Equity) and Batterymarch (Quantitative)

• Global distribution capabilities with leading partners, including banks, brokerage firms, insurance companies and independent advisors

Legg Mason Overview: Key Facts

Engagement Overview

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Key Drivers for the Initiative

• Reduce IT costs per resource hour• Create shrink & grow ADM capacity• Expand breadth & depth of expertise at LM• Improve process capability• Increase operational excellence

– Quality– Productivity– Time to market

• Leverage resource pooling model

Expectations from Strategic Partner

• Help achieve cost reduction through global execution model

• Be a partner-advisor rather than a vendor: Guide, Handhold and work jointly to make the relationship successful

• Provide the right blend of resources:– Technical– Domain– Process – Management

• Bring in the Best of Breed methodology • Ability to ramp-up and ramp-down resources

using a flexible execution model• Proven Track Record• Continuous Improvement through operational

excellence and solution accelerators

Legg Mason’s Objectives


• RFP released to vendors based on previous relationships & analyst recommendations• Score-card to short list vendors

RFP Evaluation Process

Industry Knowledge & Experience Vendor 1 Vendor 2

Experiences specific to the LM business & technology context

Company Qualifications:

Ability to service requirements

Transition Methodology

Governance Framework

Risk Management & Exit Strategy

• Detailed due diligence with workshops to identify final partner– Measure depth of expertise by meeting hands on Project Managers, SMEs through simulation of

specific project scenarios– Reference checks

• Measure alignment of cultural values of the 2 organizations• Successful deployments of projects

• Contract Negotiation


• Hexaware strengths are very closely aligned to the LM global sourcing objectives

– Experience in similar engagements with multiple Asset Managers

– Domain & technology experts in line with the LM context

– Relationships with relevant product companies – Eagle, Thomson Reuters

– Leadership in PeopleSoft Services

– Specialized QA Solutions

• BPT Accelerators

• Pre-built test scenarios for Asset Management

– Strong Execution Capabilities combined with Solution Accelerators in J2EE, .Net, BI & BA tools

• Key Customer References

• Company Size & Values– Flexibility & Scale

– Service oriented

– Alignment with long term cost objectives

• Co Sourcing Partnership

Why Hexaware?


Engagement Approach

Planning

• Envisioning

• Setup Governance Model

• SLA Definition

Transition

&

Execution

• Infrastructure •Setup

• PMO and Delivery Team creation

• Project Specific Transition

• Execution

• Measurement for SLA

Value Adds

• Improved SLAs

• Process optimization

• Y-o-Y Cost Savings


Process Harmonization Framework

Service Phase

Process Harmonization Framework

Planning Phase Pilot Phase

Legg Mason’sMethodology

HexawareMethodology

Initialmethodology

ODC Specific Process 1

ODC Specific process2



GoingForward

Methodology

RefineDefine Optimize

Hexawareprocesses

Legg MasonODC

Specific Processes

Process Tailoring


ODC Specific process2




Phase 1Planning

Phase 2 Knowledge Transfer

Phase 3 Responsibility Transfer

Phase 4Steady State

Responsibility Matrix SLA

Offshore Development Center - Knowledge Base

Hexaware’s Proprietary Transition Framework

Legg Mason Hexaware

Phase 5Value Add

Reverse Shadow Onsite

Reverse Shadow OffshoreProject

PlanningKT

OnsiteShadow

SMEs

BusinessAs

Usual

Value AdditionPlan &

Delivery

Knowledge Transfer Offshore

Project Specific Transition


Domain Center of Excellence Program Management Technology Center of Excellence

Legg Mason Hexaware Onsite Hexaware Offshore

Acquire Business Knowledge

Analyze and document the existing functionality

Business Specifications for new systems

Technical Specifications

Coding and Unit Testing

Maintenance & Support

Documentation

Dis

cove

r &

Ana

lyze

Dev

elop

men

t

Transition Process

Planning

Implementation/ Production Rollout

Knowledge Transfer & Responsibility Transfer

Testing and QA Activities

UAT

Tools, Adaptors, Components, Accelerators

System Testing

AS

M

On-Site / Offshore Execution Model


CoE Model

Standardization Of

Development PracticesImprove Operational

Efficiency

• Project Initiation / setup• Technical Helpdesk• Improvements/Innovation

• Whitepapers• Reusable Components• Best Practices sharing

Benchmarking

Performance

Cost Of Delivery

Focus

• Methodologies• Tools• Framework

• Expertise Building• Role Based Training• Prototypes / Pilots

Center Of Excellence

1 2

4 3


Suggestion Analysis

Project Specificprocess

Process Assessments

Causal Analysis

Non-conformanceAnalysis

Metrics Analysis

ProcessImprovement

Plan

ProcessImprovements Improved Performance

Improved Process

• Goals and objectives• Impact Analysis• Work Planning

Reviews, Audits, Senior Management reviews,

Metrics, Quantitative goals,Status reporting

Defect prevention

Technology Change

Customer Feedback

Improved Capability

• Build IP/Tools/Accelerators

• Use IP/Tools for improvement

• Change Management• Configuration Control• Process Release • Process Training

Continuous Improvements Framework


Governance Model


SLA Data Capture SLA Tracking SLA Analysis SLA Reporting SLA Performance Review

Tools

Help Desk

Project Manager

Team Leader

Team Member

Project Director

Steering Committee (SC)

Update Call Log

Prioritize / Assign

Case Tracking Tool

Daily Consolidation

Inquiry Reports

Weekly Consolidation

SLA Weekly

Analysis

Analysis Reports

Generate SLA Report

SLA Report

SLA Review

Monthly Operational

Review

Presentation Template

SLA Tracking & Reporting Process

CIO

IT Operations

IT StratGroup

Global Solutions Director

App. Engg. Testing Infra

Ops (transiti

on)Solutions Director

Project mgrs.

Bus. Analyst

Sourcing Office

Vendor Relationship

Sourcing

Multiple Lines of Business

1

2

3

4

Vendor

1. IT Project request2. Internal multi-sourcing3. Additional resource

request4. Vendors sourcing

Pros:

1. Single point of contact from lines of

business to IT

2. Accountability for project execution

and sourcing

3. Centralized vendor management,

sourcing and relationship

management

Cons:

1. Bottleneck in sourcing group

2. Difficult to measure value added by

outsourcing

3. Multiple touch points for the vendor

– complex reporting mechanismVendorSolutions

Manager

PMO

Application Engineering Testing

Operations

Infrastructure

PMO driven Co-Sourcing

Benefits Derived & Lessons Learned

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• Resource risk mitigation• Alignment with long term cost objectives• Flexibility to scale the resource pool up & down• Continuous development• Standardized processes & documentation• Test Accelerators & other IP• ‘Near-shore’ center

Benefits Derived


• Co-Sourcing best model for “newbies”• Continuous fact-based refinement of metrics for

defining success• Continuous education of the organization about

the model beyond the initial months• Cultural differences• Issues with night-shift

Lessons Learned

Thank You

[email protected]@hexaware.com

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Documents

Co-Sourcing – First Principles First; Simple Best