A Report submission as part of evaluation for Operations Management

Professor: Dr. Satyajit Majumdar

Organisation Selected:

Electronic City, Sector 18,Gurgaon, Haryana 122015

www.aricent.com

Submitted by:Avinash Kumar Singh

M2014HRM010

About Me:

I am Avinash Kumar Singh and am from Harinagar, a small town in Bihar. I have completed my B.Tech degree in Electronics and Communications engineering post which I worked for Aricent as Software Engineer – Trainee for 8 months. I learnt the core values of focus, perseverance and patience at an early stage in my life. My father who is a patient, disciplined and determined individual, would spend countless number of hours in his endeavours to build his business from scratch and thus has always acted as a source of inspiration for me. Living in hostels all my life, I have built adaptability as one of my strongest traits and be it as a School Prefect or a College Student Placement Coordinator, it has been my belief that one can be held in high esteem only when the organization he/she is associated with too earns respect.

INDIAN IT INDUSTRY

Introduction:IT industry in India has been one of the most significant growth contributors for the Indian economy. The industry has played a significant role in transforming India’s image from a slow moving bureaucratic economy to a land of innovative entrepreneurs and a global player in providing world class technology solutions and business services. The industry has helped India transform from a rural and agriculture-based economy to a knowledge based economy.India is the world's largest sourcing destination for the information technology (IT) industry, accounting for approximately 52 per cent of the US$ 124-130 billion market. The industry employs about 10 million Indians and continues to contribute significantly to the social and economic transformation in the country. India's cost competitiveness in providing IT services, which is approximately 3-4 times cheaper than the US, continues to be its unique selling proposition (USP) in the global sourcing market.The Indian IT and ITeS industry is divided into four major segments – IT services, business process management (BPM), software products and engineering services, and hardware. The IT-BPM sector in India grew at a compound annual growth rate (CAGR) of 25 per cent over 2000-2013, which is 3-4 times higher than the global IT-BPM spend, and is estimated to expand at a CAGR of 9.5 per cent to US$ 300 billion by 2020.

Revenue and Growth [1]:

Government Initiatives [2]:The adoption of key technologies across sectors spurred by the 'Digital India Initiative' could help boost India's gross domestic product (GDP) by US$ 550 billion to US$ 1 trillion by 2025, as per research firm McKinsey.

Some of the major initiatives taken by the government to promote IT and ITeS sector in India are as follows:

India and the United States (US) have agreed to jointly explore opportunities for collaboration on implementing India's ambitious Rs 1.13 trillion (US$ 18.22 billion) ‘Digital India Initiative’. The two sides also agreed to hold the US-India Information and Communication Technology (ICT) Working Group in India later this year.

India and Japan held a Joint Working Group conference for Comprehensive Cooperation Framework for ICT. India also offered Japan to manufacture ICT equipment in India.

The Government of Telangana began construction of a technology incubator in Hyderabad—dubbed T-Hub—to reposition the city as a technology destination. The state government is initially investing Rs 35 crore (US$ 5.64 million) to set up a 60,000 sq ft space, labelled the largest start-up incubator in the county, at the campus of International Institute of Information Technology-Hyderabad (IIIT-H). Once completed, the project is proposed to be the world’s biggest start-up incubator housing 1,000 start-ups.

Bengaluru has received US$ 2.6 billion in venture capital (VC) investments in 2014, making it the fifth largest recipient globally during the year, an indication of the growing vibrancy of its startup ecosystem. Among countries, India received the third highest VC funding worth US$ 4.6 billion.

INTRODUCTION TO THE ORGANISATION [3]

Timeline:

Aricent develops software and provides technology services to application, infrastructure, and service providers with operations in 19 countries worldwide.

The company is one of the largest privately held companies in Silicon Valley, with 800 customers, and employs more than 10,000 consultants, designers, and engineers at 36 locations worldwide. The company licenses its own software products for use in telecommunications design, manufacturing, and service with 40+ years' design experience through frog, including products for Apple, Disney, GE, HP, Sony, and many other Fortune 500 brands. The products group at Aricent is one of the market leaders providing enabling software to leading telecommunication companies all over the

1991:Established as Hughes

Software Systems (HSS) in New

Delhi developing software solutions in

the areas of VSAT-based networks.

2004:Was acquired by Flextronics,

and changed its name to Flextronics Software Systems (FSS).Expanded development

operations in Kiev, Kherson and Vinnytsi

a in the Ukraine; Randburg, South

Africa; and Beijing, China.

2006:Was acquired by Kohlberg

Kravis Roberts and Sequoia Capital as part of a $900 million sales of software companies. Renamed to

Aricent with headquarters at New Jersey.

2009:Aricent Approved for Latest

CMMI Level 5.2011:

Rebranded to Aricent Group.2013:

Rebranded to Aricent and shifts headquarters to California.

world. Aricent licenses more than 125 software frameworks to equipment manufacturers, device manufacturers and service providers.

Market Segments:

1. Embedded Systems: Aricent’s Semiconductor & Embedded solutions are specifically designed to accelerate time to market, optimize cost and improve productivity for customers across industry segments. Aricent provides a one stop shop solution for Semiconductor companies, OEM/ODMs and Carrier service providers for all Embedded System Integration requirements.

2. Software and Internet Services: Aricent offers unique expertise in connectivity, device engineering, Social, Mobile, Cloud and Analytics enablement of applications and services—expertise that has helped software and Internet service vendors accelerate product development, customization and the testing of both application and back-office platforms.

3. Communication Infrastructure: This forms the core of the Aricent’s business. Being a market leader in this field Aricent provides end to end solution in this domain.  From helping telecom equipment manufacturers identify critical market requirements for broadband products, translate them into specific product requirements and target the ideal product phasing for different product features to the later part of testing and product support services Aricent provides all.

Figure: Demonstration of Aricent’s End to End solution for different services

The Embedded Systems and Software & Internet Services market segments of Aricent started in 2013 after the company sought to diversify its business through the skills it has acquired through its experience in communication infrastructure domain. Not only this, Aricent has now been partnering with different automotive companies to provide Human interface solutions for the upcoming concept cars. Communication infrastructure segment still today is the main stay of the Aricent’s business accounting up to 60% of its business. The business processes of the company are like any typical IT services company which range from Client acquisition to software rollout to providing onsite support services.

WIRELINEWIRELESS

NEW NETWORKSM2M / loT

CLOUD & DATA CENTERANALYTICS

MOBILE & SOCIALSECURITY

MANAGEMENTAPPLICATIONS

DEVICESMULTIMEDIA

BUSINESS PROCESSES OF THE ORGANISATION [4]

For all the market segments especially Aricent is divided into three departments. They are:

1. Product Engineering Services (PES): The Product engineering services department is the name given to the development department of the organisation. This branch helps designing the products and developing software for the same with the initial testing.

2. Testing: This department coordinates with the Product Engineering Services and works simultaneously on the product being designed to find bugs and errors that might create problem at the client side.

3. Product Support Services (PSS): This department of the organisation helps in the maintenance of the product at the client side. This division works with the client in the implementation of the product at the client side and after implementation providing after sale service for the product till the service life of the product.

To support the above departments there are various enabling functions in the organisation. These enabling functions are:

1. Human Resources: This function is one of the most important functions for the organisation as employees work in a high pressure environment and Human Resources helps employees to work efficiently in that high pressure environment by providing various services ranging from as small as facilitating concierge services to as critical as caring for the employee’s family in case of medical emergency.

2. Finance: Finance provides following services to the business:a. To the Board of Directors and Investors:

Plays a crucial role to increase shareholder value, manage financial risk, control costs and ensure compliance with exacting governance regulations.

b. To Managers:Timely and relevant input to improve the quality of their decisions and to provide better methods of planning, managing and monitoring performance.

c. To Employees:Provides various services that help optimize their financial tasks in the areas of salary, advances, reimbursements and taxation. The effort is to resolve their queries and problems in a timely and accurate manner.

3. IT: This functions helps in satisfying day to day needs for requirement of hardware and software needs of the internal clients, i.e, PES, Testing, PSS, HR, Finance, Legal, etc.

4. Legal: It supports Aricent’s strategic ambitions and helps in achieving high standards of ethics and compliance.  It aims to provide responsive, innovative and practical approaches globally to manage risk in Aricent’s business operations.

5. Marketing: It helps in acquisition of new clients, management of existing clients and maintaining the brand image of the organisation.

6. Quality: The Quality Group, along with Subject Matter Experts; defines, develops, maintains and continually improves software development and allied processes, and also provides support through trainings, audits, management reviews and rewards. The Quality Group also ensures company-wide certification and compliance to the most appropriate quality standards in the telecommunications software industry.

7. Procurement:  The role of procurement commences immediately upon receipt of an approved Resource Requisition and completes on the handover of the material to the user, bar coding it and releasing payment to the vendor. Procurement at Aricent is driven by the objective of institutionalizing the industry best practices to constantly reduce the procurement lead time and optimize the cost of acquisition.

8. Real Estate and Facility Management (REFM): Facility management embraces a wide range of function and support services, including janitorial services; Housekeeping, security; property or building management; engineering services; space planning and accounting; mail and messenger services; records management; Café Services, Environment, Health and safety systems, transport services’ Library, Gym, Front Desk and other support functions. It is the

job of the facility manager to create an environment that encourages productivity, is safe, is pleasing to clients and customers, meets government mandates, and is efficient.

In Aricent a business process starts with the acquisition of a new client or acquisition of a new project from an existing client. It can be represented as follows:

Business Processes in Detail:

1. Business Development: The marketing team in collaboration with the consultants try and find new clients - either by identifying business needs in a particular region and selling that business idea to a client or by identifying business needs of a company and then selling the Aricent’s competitive advantage to that company. Another method is to further assist the existing clients to develop new technologies and enhance their product line in the areas of expertise with Aricent. Eg.: Aricent helped develop Vodafone its 2G system first based on simple BTS and then when FQxx BTS came in the market, Aricent only helped Vodafone further develop 2G functionality based on the FQxx BTS.The marketing team after developing a business client completes the deal by identifying financial implications, forecasting of estimated date of delivery with the assistance of Product Engineering services, legal formalities through the legal department and thus completes a cycle of business development. After this the requirement forecasting is done and procurement for the same is initiated.

2. Procurement of Resources (Material & Human): After the business development the requirements are forecasted like number of machines, type of talent pool needed, required human resource present or to be recruited, types of equipment needed for development and testing, cables, wires and other consumables needed. After this forecasting the Procurement function starts the procurement of needed items except the Human resources which is initiated by the HR department. The Procurement function follows TL 9000 standards and it completes all the processes from generating tender to payment to vendor.

3. Infrastructure Setup: The team to work upon the product would then require seating area, security access to its designated areas, ID cards, travel support and cafeteria access which is taken care by the Real Estate and Facility management function. The setup of needed IT infrastructure is taken care by the IT team. All along both the teams collaborate with HR department for better roll out of services to internal client.

4. Product Development: The product development is the business process where actual development of the product takes place. Aricent has three competitive advantage in the industry:

a. Speed: The IT space is a highly competitive space. Speed is of utmost importance and this is what Aricent provides by utilising its resources to the full capacity and adhering to Agile methodologies and certification models like CMMi certification this speed is met with high quality standards. The work environment is such that majority of the projects have been either completed under the normal forecasted completion time

Business Development(Functions Involved – Marketing, Finance, Legal, Engineering Services)

Procurement of Resources (Material & Human)(Functions Involved – Finance, Procurement, HR, IT, Engineering Services)

Infrastructure Setup(Functions Involved – IT, HR and REFM)

Product Development(Functions Involved – IT, HR, Product Engineering Services, Testing, Quality)

Implementation & Post Implementation Services(Functions Involved – HR, Product Support Services)

period or under the forecasted extended time period. The speed and quality is achieved by the following methods:

i. Cross functional teams are formed for a particular project such that each team functions like an individual in a large team made of cross functional disciplines. There would be a sub-team of developers expert in one domain of the project, another sub-team of developers expert in another domain of the project. Along with this there would be a sub-team of testers who would start the testing simultaneously. Then there would be Principal System Engineer and a team Director, a CRM and an Integrator. These sub-teams work like one single team and hence completing smaller modules quickly and thus the project on time.

ii. Quality is maintained by the team through following the CMMi guidelines and to adhere to these standards the Quality department enforces strict compliance and ensures that quality of code is maintained and a standard coding procedure and bug reporting is followed throughout the organisation for better coordination.

Figure: Quality Management in Aricent

b. Cost: The on-time product delivery and high resource utilisation, the Human Resource cost which is one of the largest cost components of any IT industry is kept competitive and is considered to be one of the most optimised in the industry.

c. End-to-End Solutions: Due to its in-built expertise Aricent provides an end-to-end solution for the communication equipment manufacturers and communication service providers. This stands out from other competitors as Aricent has a vast experience of 20+ years and a standard process throughout its team which helps in complete quality product delivery on time due to all phases of products serviced through internal clients. It provides from consultation to identify new business opportunities to product support services.

5. Implementation and Post Implementation Support: After the completion the first phase of implementation is the test phase of implementation where a CRM, one cross functional team of Product Engineering and one team of Product Support services help the client in identifying any bugs in the product and fixing if that bug. In the later stage with full implementation, one team of Product Support Services helps the client in maintenance of the product for the service life of the product.

Through these processes Aricent is able to fulfil its client need and through ensuring Speed & Quality, Cost and end-to-end product solutions it is able to maintain the competitive advantage that helps it to remain one of the largest Communication infrastructure services provider organisation in the world.

Figure: Example of end-to-end solutions for various communication related solutions.

HUMAN RESOURCES DEPARTMENT [4]

Human Resources department has been successfully partnering and co-creating an environment and culture that leads to higher individual and organizational performance, adding value in the changing business environment. All HR systems and processes are made in a way that are easily scalable and aim to achieve excellence in services delivered, enabling high employee satisfaction. Being a global player with centres across the globe, policies are framed with a global mind-set, catering to all employees.

HR at Aricent is guided by the following: 

1. Developing the critical competencies at every level to manage changing customer and employee expectations.

2. Building a strong employer brand and meeting the talent requirement and more importantly the “right” quality through the hiring engine.

3. Building a culture that promotes “employee engagement” and “performance accountability”.4. Robust systems and processes to meet the requirement of a “new scale” of operations.5. Creating positive employee experience and internal customer delight.

Role of HR in Aricent:

1. Resource Management: People are the key to Aricent's existence and operations. RM is the centralized function for allocation and deployment of engineers to various projects. RM's goal is to staff the organization optimally in order to meet the current and future needs timely while keeping the cost under check. For projects, RM strives to ensure that they are fully staffed on time with right skills. With engineers, RM works to match the allocations with engineer's work preferences. Since, one of the key competitive advantages of the organisation

is COST the Resource management plays a vital role. It is taken care that no employee is kept on bench and there is flexibility in movement of employees in terms of teams, technologies and locations.

2. Learning and Development: Since, Aricent is consistently evolving and innovating so as to meet the future demands of the business in which it operates L&D is an important function. It is also important to maintain the flexibility of employee movement across different technologies and roles. This helps in proper utilisation of the Human Resource and hence cost-efficient operation. L&D Vision of Aricent – ‘Enable Aricent to become the best in class Communications Software Company through an outstanding Learning and Education environment’. The 5 point manifesto of L&D in Aricent is:

a. An Effective Frontline Leadership that delivers project efficienciesb. A cutting-edge Senior Leadership that defines and drives growth and profitabilityc. Linkage to an Optimal Talent Mapping and Competency Development across the

organizationd. An environment towards total Customer Centricitye. Learning and Development processes that are aligned to business goals

3. Reward & Recognition: Since Aricent works in a high speed, precision and quality controlled environment it becomes necessary to celebrate excellence in the organisation and rightly so, the Rewards and Recognition function at Aricent is named as “Aricent celebrates excellence”. The recognition can be for any of the following behaviours:

4. Compensation & Benefits: Aricent strives to attract and retain the best talent in the industry by striking a right balance in terms of compensation and people friendly practices that align with organization’s business strategy. Aricent derives its compensation philosophy primarily from the following principles:

a. Market Oriented: Aricent periodically benchmarks with organizations of comparable size and business on compensation levels and practices through participation in industry compensation benchmarking surveys. Aricent arrives at its compensation strategy for every fiscal year based on an appropriate level of competitive positioning using an optimal budget that is in line with the business objectives for the fiscal.

b. Competitive Positioning: Aricent arrives at an appropriate compensation positioning every year based on its business strategy for the year, market benchmarking data, attrition levels across positions, and ability to retain as well as attract the best talent from the market.

c. Equity: Equity is achieved by ensuring that people who are performing similar/comparable roles with reference to the position profiles and with comparable performance and potential should be within a narrow range in their respective salaries.

d. Pay for Performance: Aricent has a philosophy of distinguishing performance levels. The salary increases (and hence the salaries) of employees at a relatively higher level of performance rating would be higher. This promotes a culture of meritocracy, and thereby encourages everyone to give their best.

5. Annual Performance Review: It helps the organisation and its leaders to assess the organisations’ capabilities and expertise and thus offer best value to the client. It also help managers to assess talent in their teams and to make strategic recommendations to leaders about where they may need to develop or add skills.

6. Counselling and Shared Services: The HR department also helps in mitigating conflicts in teams as collaboration amongst teams and members of a team is necessary to remain agile in its operations. Not only this, the HR department also helps in planning the career path of an

1. Client First 2. Leadership 3. Collaboration4. Innovation 5. Constantly Learning 6. People Management7. Quality Delivery

employee. HR along with REFM helps an employee take care of his day to day activity while the employee works with complete peace of mind without worrying about his medical and other necessary aspects of life. The completion period of all activities are driven by strict SLA’s and an employee is provided with all services from sending a letter to travel management to renting a house to special taxi services and easy payments of all the expenditure incurred on the job. All this is done hassle free and with a click of button. The systems are fully automated and the employee has to go nowhere for his needs.

PERFORMANCE METRICS AND RATING SCALE [4]

The performance for incentive pay-out is measured at two levels:1. Company Performance:

a. The Company Incentive Plan(CIP) has two parameters that are related to the Company’s performance:

i. Company Revenueii. Company Profit (EBITDA)

b. The CIP assigns equal weight to both of the key Company parameters (Company Revenue and Company Profit). Once the Company profit achieves the threshold level, the CIP payout % will be determined based on the actual achievement level of both Company parameters (separate multipliers shall be computed for each parameter based on the achievement level and the Company payout % will be determined based on the factored multipliers). CIP payout % will further determine the overall incentive/bonus pool available for distribution and payout to eligible employees.

c. The following table summarises the CIP for FY 2015-16:

2. Individual Performance: Aricent uses five point rating scale to measure performance of its employees. It cuts across all functions and departments.

a. The following table gives the detail about the rating scale and complete description about each rating scale:

Rating DefinitionExtraordinary Performer

Consistently over achieves goals and relentlessly delivers client value, builds trusted and sustainable client relationships. Delivers phenomenal, measurable and lasting business results, with innovative practices. Self-driven who proactively takes initiatives and demonstrates excellence in delivery, quality and process before time with complete accountability. Viewed as a role model by peers and team members. A creative person and a great mentor who collaborates exceptionally well across teams, and require minimal supervision. Goes above and beyond to develop, engage and retain our people.

Excellent Performer

Often over achieves goals and delivers client value. Contributes significantly to lasting business results and demonstrates excellence in quality, delivery and process on time. Mostly proactive in accomplishing assignments and requires

periodic supervision and guidance. A great mentor who focuses on developing, engaging and retaining our people. Uses innovative practices in his or her daily assignments and collaborates well across teams.

Highly Valued Performer

Achieves most goals and delivers client value. Highly dependable performer who satisfactorily delivers quality and process, mostly on time. Contributes in delivering business results with visible organizational impact and helps develop, engage and retain our people. Supports the creation of offerings to help our clients grow. Requires periodic supervision and assistance to accomplish assignments and collaborates occasionally.

Inconsistent Performer

Inconsistent in achieving goals and delivering value to our clients. Lacks consistency in delivery, quality and process, and does not always achieve timelines. Not a good collaborator and rarely contributes ideas that may help our clients succeed. Communicates with team occasionally and less focused on developing, engaging and retaining our talent. Requires considerable supervision in accomplishing assigned tasks.

Highly Inconsistent Performer

Does not achieve most goals or deliver value to our clients. Does not collaborate nor work as an effective team member. Executes poorly on delivery, quality and process, and misses most timelines. Does not understand what might help our clients succeed and does not contribute ideas or create offerings. Hardly communicates with the team and is not focused on developing or retaining our people. Requires very close and constant supervision and assistance to accomplish assignments.

The CIP bonus is paid out twice in the year and the amount is a mix of both the performance ratings. So if company has achieved the target and the employee is an Extra-ordinary performer then he/ she will get around 120% of his usual prescribed bonus whereas if the employee is a Highly Inconsistent Performer then he/ she will receive 0% of his usual prescribed bonus for the same company performance. The process of Performance Management in Aricent is explained by the following figure:

References:

1. NASSCOM2. India Brand Equity Foundation3. www.wikipedia.com 4. Aricent Intranet – vpn.aricent.com5. Interview of Mr. Mukesh – Software Engineer, Aricent