Global Development by 3s0SZiA

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									                    Effective Global Development:
                               Strategy



Jim Wasko
February 19, 2009
 Topics
   Gartner Group Outsourcing Definitions

   Global Development Model Considerations

   Global Development Strategy

   Communication

   Strategic Planning

   Foreign Assignments

   Human Resources

                              IBM Confidential
Page 2
 Gartner Group Outsourcing Definitions
   Outsourcing - The Gartner Group defines outsourcing as "a contractual
     relationship with an outside vendor that is usually characterized by the
     transfer of assets, such as facilities, staff or hardware. It can include facilities
     management (for data centers or networks), application development and
     maintenance functions, end-user computing or business process services."

   Nearshore (near site) - The Gartner Group defines nearshore as "an
     outsourcing term describing the provision of services from a country that is
     close to the client enterprise's country - for example, services provided to a
     US enterprise from a service provided located in Mexico.“

   Offshoring (far site) - The Gartner Group defines offshoring as "an
     outsourcing term describing the provision of services from a country that is
     geographically remote from the client enterprises, for example, services
     provided to a U.S. enterprise from a service provider located in India."

   Global Sourcing (joint development) - The Gartner Group defines global
     sourcing as "a service delivery model in which work is performed by a virtual
     team, which may consist of personnel that are on-site, domestic, nearshore or
     offshore."

                                      IBM Confidential
Page 3
 Global Development Model Considerations
   Criteria for the work to go to geographic locations
   Development models
         – On site, Near site, Far Site
         – Joint development or work for hire
         – Company + Contractors or Contractor only
   Available skills
         –   Technical
         –   Management
         –   University programs
         –   Hiring processes
   Costs in labor, infrastructure and equipment
   Training
   Project Management and project structure
   Communication paths
         – Roles and responsibilities clearly understood
   Time zones
   Cultural differences
                                          IBM Confidential
Page 4
Elements of Global Development Strategy
 Align the long term objectives with execution plans
     – One team
         • Team members that are committed
     – Evolve the strategy into a plan
 Establish a 3 year plan to address right people at the right place at the right time
     – Space and infrastructure
     – Recruiting, technical and management skills
 Select locations that compliment your business
     – Tighter alignment between development, sales and the customer
         • Technical Advocates
         • Service Support
         • Collaboration with Partners
 Establish key missions versus small projects
     – Ownership is key
 Development of Skills
     – Management
     – Technical
 Human Resources
                                         IBM Confidential
Page 5
Communication
  Understanding both ways
     – Make sure you are understood
     – Don’t be shy about letting people know you don’t understand from a language or cultural
       perspective
     – Ask follow up questions to make sure there is an understanding
     – Listen, listen, listen and talk slower
  Meetings
     – Work out the “best” meeting times taking into account time zones
          • Many times the Global Development location is having to accommodate US
     – Agenda sent out ahead of time with actions items
     – Minutes from the meetings soon after (can help with verbal communication voids)
          • Trade off who is taking the minutes between locations
     – Web meetings, phone video…
  Department, VP and Division communications to the Labs
  Allow flexibility with your team members to work different hours to help in the
   communication of different time zones
     – Laptops!
     – Work at home…

                                             IBM Confidential
 Page 6
 Strategic Planning
   Why it's needed (US perspective and country perspective)
   Challenges across organizations and countries
   Planning considerations
         –   Labor Rates (includes exchange rate/inflation)
         –   Labor Demographics
         –   Country Government Grants
         –   Human Resources
         –   Start up costs
         –   Location selection, up front and ongoing costs (political
             environment, facilities, IT, capital, ...)
   University infrastructure and influence
   Short term and longer term international assignments

                                      IBM Confidential
Page 7
Global Development Planning Considerations
   LABOR RATE DIFFERENTIAL                                            PROJECT MANAGEMENT
        – all compensation incl overtime, bonuses etc by band/skill        – incremental only
        – benefits                                                     ONGOING COSTS (Delta)
        – productivity/utilization deltas                                   – Infrastructure
        – taxes                                                             – Recruitment/training
     LABOR DEMOGRAPHICS                                                    – IT, Telephony & application enablement
     REG/NONREG FTE DETAIL                                                 – Travel
     GRANTS                                                                – Change/Process Management
        – Receiving location grants                                         – Business recovery
     HUMAN RESOURCE ACTIONS EXPENSE                                     SUPPLIER INVESTMENTS
        – Severance (includes buy-out, benefits ext, retrain etc)           – Start-up
        – Retrain/Redeploy                                                  – RESO
     START-UP COSTS                                                        – ongoing,,,,,etc
        – Bubble - Duplicate resource during start-up phase              EXIT COSTS
        – Recruiting/hiring/communications                               STRANDED ASSETS
        – Bench time (billable staff)                                    RESO Expenses
        – Training                                                          – Penalties/grant paybacks
            • - Local startup inc curriculum & resources                 TAX RAMIFICATIONS/INCENTIVES
            • - T3 & Mgmt (at exited site)                               EXCHANGE RATE/INFLATION
        – All Travel                                                        – Include multi-year projection
        – IT / Telephony                                                 PAYBACK PERIOD(ROI)
        – Application enablement                                         IRR – Internal Rate of Return
        – Capital Required i.e.....workstations etc.                     NPV – Net Present Value - if multi-year payback required
        – Assignee Costs                                                    – Hurdle Rate
        – other misc (i.e. transportation/shipping costs)                RISK ASSESSMENT
     RESO (physical site)                                                  – Revenue/profit impact
        – Fit-up costs of new location                                      – HR
        – Site savings/Impact                                               – Political/Economic stability
        – Cost per sq ft/NRSF                                               – Customer Sat
        – Occupancy/site services                                           – Currency fluctuations
     INCREMENTAL TELEPHONY TOLL COSTS                                      – Availability of Skills



                                                            IBM Confidential
Page 8
Foreign Assignments
 Assist in the transfer of technology, products and knowledge
 Business needs
  – Build professional talent in country to address a temporary skills shortage with the goal of
    training local replacements for the assignee
  – Assist in the management and operation of the location
 At project start to have an expert be on site for 1 to 2 months pays back fast
 Skills development – to develop and strengthen the capabilities of the location
  – Provide your US professionals, managers and executives with international experience
  – Focus on executive development and mobility promoting cultural diversity
 Look at rotation schedules with people coming to the US and US to
 sites…probably more important for the latter
  – Assignments should strive to be less than <60 days
 Appropriate work permits/visa need to be obtained before entry into the country
  (allow enough time)
 There are many personal considerations that need to be taken into account before
  taking an assignment
 Tax implications depending on length of assignment

                                       IBM Confidential
Page 9
Human Resources
 Climate issues
  – In the US
  – In the Countries
 Avoid the use of “Low Cost Country”
 Switch from using Global Resourcing or Outsourcing to Global
  Development
 Develop Technical Resource programs
 Recognition of team accomplishments
 Provide performance feedback
 Type of work and how someone is treated is key to project success
 Moving from piece meal to missions makes a difference
 Executive / Management visits
  – Positive reinforcement is needed
  – Face time of key technical and managerial candidates to execs
 How you will deal with attrition…back up plans?
                                  IBM Confidential
  Page 10
Projects
 Topics
   First Contact

   Common Expectations

   Project Setup

   Teaming

   Mission Transfer

   Know your country!


                          IBM Confidential
Page 12
First Contact
 Spend time on initial introductions
 Understanding both sides of the organizational structures
 Clear layout of the project components to be scoped
 Time frames
     –    Initial sizing
     –    Hiring
     –    Training
     –    Travel
     –    Expectation of full utilization (up to speed)
     –    Meeting and project review frequency
 Export regulations
     – Technology
     – Capital Equipment
 Understand cultural differences
                                        IBM Confidential
Page 13
Common Expectations

   Lower cost does not equal lower performance
   Agree on where accountability will be held
      – i.e. schedule slips, etc




                                   IBM Confidential
Page 14
 Project Setup
   Team members
      – Technical Leads, Managers, etc
   Meeting Structure and Communications
      – Written, sent in advance
   Schedules
      – Holidays, vacations, time of day, day of week
   Training
   Travel
   Escalation
      – Process for when things are off track



                                   IBM Confidential
Page 15
Teaming
 Bring the appropriate management levels into your staff meetings
    – Everyone needs and wants to feel a part of the team
    – How / When to integrate management teams
 All Hands Meeting
    – Do it in their time zone
    – Cover same material as in the US – treat as one team
 Mentoring / Buddy system
    – For both managerial and technical
    – Need follow up especially on the technical side
          • Because of communication & time zones this is very hard to do
    – Talent plans for technical and managerial
    – Workforce dynamics (ex-pro & new college hires)
 Daily Communications
    – Pick up the phone
    – IM, email, IRC
 Pictures help!


                                        IBM Confidential
Page 16
 Mission Transfer
   When is it really transferred?
      – What constitutes mission transfer ($'s, program leadership,
        planning, management,...?)
      – How do you know when you are successful?




                                IBM Confidential
Page 17
Russian Federation: facts, economy, culture
          How do you picture Russia….?

                 Poor, undeveloped…




                             vs.




                 Beautiful, rich,
                  complex….



                       IBM Confidential
Page 19
          What images or stereotypes come to your mind?




                           IBM Confidential
Page 20
          Russian Federation is the largest country in the world




                              IBM Confidential
Page 21
                       Some facts and numbers….

                                Russia has wide natural resource base including
                                 major deposits of oil, natural gas, coal, and many
                                            strategic minerals, timber
                            Disclaimer: formidable obstacles of climate, terrain, and distance hinder exploitation of
                                                               natural resources.




      General facts:                           Industries:                             Agriculture:
 Founded in 12th century               Mining/extractive producing                          Grain
                                         coal, oil, gas, chemicals,
 Area: 17,075,200 sq km                                                                  Sugar beets
                                                metals, etc.
(approximately 1.8 times the
                                                                                        Sunflower seed
size of the US)                               Machine building
                                                                                          Vegetables
 Population: 142,893,540 (US                Defense industries
is twice this number)                                                                        (Fruits)
                                            Consumer durables,
                                             textiles, foodstuffs,                           (Beef)
                                                 handicrafts
                                                                                               Milk


                                                IBM Confidential
Page 22
                                               In Russia….

   Some rules of social etiquette include
          •   It is unacceptable for a man to wear a hat in a public building
          •   Do not sit and cross your feet to reveal the soles of your shoes (Historically)
          •   Always remove your gloves before shaking hands
          •   Whistling on the street or inside of a building is considered rude
          •   Always offer a seat to older people and women in when using public transportation
          •   Do not place your elbows on a table during meals


   Middle names are used to address one formally
          •   Depending on situation, addressing someone with the first name may be considered rude
          •   Middle name is derived from father’s first name (Formal dialogue only)


   Corruption is still a problem in a lot of places
          •   Given money and connections a lot of things are doable
          •   Less common year to year




                                                 IBM Confidential
Page 23
                                             Russians…

 tend to structure their lives around their family ties and network of close friends.
 the most important thing for Russians is to be able help and take care of family and friends.
      Even during business hours, personal relationships are almost always given priority over work obligations.
 often enjoy conducting business informally over lunch or dinner in a restaurant. An invitation to a Russian’s
home is a significant honor and a sign of trust and the establishment of a friendly relationship.
Drinking is considered a significant part of socializing.
 men demonstrate gallant behavior, such as opening doors, helping women put on their coats, etc.
 are curious about the way of life in other countries. Many questions, including personal ones, are commonly
asked. These include those about living and working arrangements, family life, hobbies, etc.
 are greatly concerned with social status. Clothing is one of the main indicators of one’s status.
 frequently use time as a means of control and power. You will be more likely made
to wait if you need them more than they need you or if that is the idea that they want to convey to you.



             Awareness                Interest / Desire             Action               Loyalty


                                                 IBM Confidential
  Page 24
          Modern Russia




           IBM Confidential
Page 25

								
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