Archive for the 'Outsourcing' Category

New battle for engineers – Technology Outsourcing providers vs Investment Firms

Recent post on Gigaom didnt come as a surprise. With india growing investment management has become a key and important pillar for many organizations. Many global investment managers have opened shops in india and mutual funds are hiring MBA’s like anything. But with low grad quality of MBA except for the one’s churned out by IIM,IIFT or SP Jain. These investment firms are now turning to our favourite IIT’s and other top notch engineering college to find the next financial whiz kids.

As Infosys and TCS being looked more as coding factory and IT sweat shops engineers of future are looking for more responsibilities and challenges. This is a bad news for IT startup companies which are already having trouble attracting and retaining talent. Now not only they need to fight big fat paycheck giving organizations in IT/ITES sector but also re-position them to wade off competition from investment firms.

E-Commerce India – 10 Questions to ask your E-commerce vendor

So you have decided to take the e-commerce plunge and have decided to go with an small IT Companies which claims to have done shopping cart websites and can do the job in less than INR 1,00,000. WAIT!!!!! before you take the plunge its important to understand difference between an experience provider and another run of mill IT outfit run by students who have just graduated. I decided to create a small questionaire which can help you in evaluating best suitable vendor for your organization in layman words

Q1) What site architecture will be implemented ?

Answer you are looking for is any specific implementation model followed by the vendor. Like Interface components ,ability to plug and play features with ease in terms of long term maintainance. Think of the e-commerce site as an operating system. More the usage of computer higher will be load. So if you dont have good processor(architecture) for your site you are bound to face trouble.

Q2) How many number of  transactions  can site support ?

You are trying to dig vendor more for answers on ability to handle customers per minute/per hour. Imagine you decided to spend 10 lakhs per month on advertising budget which helps you draw 10 lakh customers. If your site only has potential to handle 25% of the load whats the point spending so much money in bringing in customer.Use terminalogies like Co-current transactions, capbility of architecture implemented, is the site database dependent for transaction or application is live in itself to manage transactions before putting load on database.

Q3) Experience with E-Payments System?

This is very important for an e-commerce vendor. If the e-commerce vendor cannot advice on the best suitable e-payment system for your platform and does not have integration experience, This should be enough hint for you to start looking for another vendor. As by integration it doesnt mean just integrating code. But advicing you on Average ticket size based on previous e-payments system. Possible number of chargebacks expected what kind of percentage should be negotiated with banks. Should mobile payments be encouraged. etc etc

Q4) Managing supply chain is it just simple as shipping to customer ?

Supply chain begins with Inventory management. Using web as a channel of sales is ability to reduce inventory and manage stock just to predicted requirement. What strategy does the vendor help you in devising to push sales of items available largely in stock and charge premium for items in demand but low in stock.  Does the e-commerce vendor allow you to manage stock in batches

Q5) Help Desk assistance ?

What kind of support services are provided by vendor. Is someone always looking after your IT infrastructure to see business runs smooth. Is their a self service portal provided by vendor to manage your requests. What kind of Quality SLA’s is vendor ready to include to help you give maximum benefit.

Q6) What kind of IT infrastructure vendor expect you  to setup to manage operations?

Q7) Whats ongoing maintainance cost ?

Q8) What kind of research and development does vendor carry out in field of e-retailing ?

You are trying to understand ability of vendor to keep innovating to help you keep you as leader in your segment. Look at  e-commerce and e-retailing research which can benefit your business in long term.

Q9) What kind of customers have they managed?

Please not this is an very important question as its non technical in nature. Most of the e-commerce consultants are techies instead of business consultants in india. So the outlook of their company is similar, request information on what kind of customers do they have and what kind of implementation they carried out. request information in terms of revenue and customer base achieved from the site. Try to mould more questions from the questions related to your site like number of transactions the system can manage, have they done advertising campaign or how many new features have they added in last 12 months etc.

Q10)  What percentage of their customers have been successful with ventures?

Ans concentrate on the customers ones being unsucessful. The reason you are trying to find out of vendor was cause of project failure.

Once you are sucessfully able to get answers to the above 10 questions asked you will realize the true potential of your e-commerce vendor. This all has been based on my experience setting up Cyberica E-Retailing Solutions practice.

We meet so many customers and their outlook on selection of vendor is more on technology showcase instead of business problem. Hence we came up with a questionaire which help customer evaluate vendors on basis of technical understanding as well as business operational knowledge. As its important for customers to understand when they dont have technical knowledge to manage the channel then why evaluate a vendor only on technical capabilities. Vendors ability to talk to customer in business language is very important.

Failure of Offshore Development and R&D Center India

Everyday you pick up business newspaper like economictimes businesss standard etc. Its filled with news of IT companies comming in hoards for setting up offshore development center to take advantage of cheap and knowledgable manpower in india. Though their is very less coverage on fact of downsizing and companies going back or looking at other countries.

Being from the SME sector its very important to emphasize SMB from US and europe had not been effectively take advantage of indian operations. Their are multiple factors responsible for it.

– Lot of expectation in terms of software engineering standards and manpower capability. In terms companies want their development staff to be as software design efficent as coding efficent. As this is what they are use to in US. But india does not have efficent skill set to do multiple hat jobs.

– This brings us to the next task training the employee to work according to company culture. By the time money is spent on employee training and he/she is ready they are ready to leave for company offering then next 2000 INR jump in monthly salary.

– Companies here either follow no process or too many processes which slow up the product development or research curve.

– Commitment to work long hours to finish project is often disappearing with shift working becoming the norms

india is all about number game or increasing capacity. If you have a formal process which could be run external to an organization and employing 5 people for 1 thing will also increase efficency and productivity by 500% then only it makes sense to co-locate to india. Otherwise you should consider investing with existing indian IT companies so that risk gets mitigated and local product management techniques in line with corporate objectives are meet timely.

Cost of setting up Development Centre India

for a small IT company(less than 20 employees) cost per seat generally terms out to INR 25,000 per seat per month. this includes the risk metrics and operational cost (as per existing rental values/admin expenses calculated on outsourced operational values)

Foran american company looking at starting operations in India they should look at cost of USD 1500 per seat/per month. This is essential keeping in mind learning curve they will need to implement and risk for around 18 months for delivery channel to be self sustainable.  If they wish to cut down on inital training etc and would like people to straight away jump into projects thrown at them. They are looking at cost between USD 2000-2500 per seat/per month depending on a contral spanning 24-26 months.

Companies should do take a note india is no more cheap source of manpower but a place to find good minds at competetive cost.

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July 2020