Does a captive make sense for my organization
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Transcript of Does a captive make sense for my organization
DOES A CAPTIVE MAKE SENSE FOR MY ORGANIZATION?
ANILESH SETH’S OFFSHORE CAPTIVE EVALUATION CHART
www.slideshare.net/anileshwww.captivesinindia.blogspot.com
The matter in these slides represents my views based upon my experiences and inputs I have received from several folks I have been in touch with over the years.
I assume no responsibility for the success or failure of any outcome for anyone adapting or adopting anything I have mentioned herein.
Take your own risks and your own decisions.
That being said, I am licensing the use of these slides as a creative commons license. You can use these with no obligation – just be sure to insert your appreciation on my blog www.captivesinindia.blogspot.com and share your work as per the Creative CommonsLicense at www.creativecommons.org/licenses/by-sa/3.0/
Is a captive a good strategy for me?
As a first step, it’s a good idea to answer the following questions: Do we have clearly articulated objectives (this includes
a prima facie business case) Is there leadership commitment from the top to make
this happen? Is the organization committed to charging a top level
executive to drive the strategy Does the company have mature global engagement
practices?
Clear articulation of objectives
So does talking about cost-savings make sense? Of course. This is one of the core foundations of the model
What are other business objectives that make sense Just cost-savings is not good enough. There needs to be a solid business case
that could be derived from:
The need to keep strategic/IP related work inhouse To drive better productivity and responsiveness from vendors, from an “on-the-
ground” strategy….to transition them to being partners in the true sense To gain access to young talent To get access to talent with the latest skills To drive process improvement in the parent organization To ensure high speed 24*7 response to business needs, at lower costs To build specific competency centers at lower costs To build a global brand As a precursor to entering the Indian market
etc
The cost angle
Isn’t it cheaper to outsource to a vendor? Could be. But this isn’t about competing with a
vendor. It is about an overall strategy where the vendor is a part of the eco system
Leadership commitment
This needs to be from the very top. There can be no compromises. Without this, this strategy is a non-starter or will burn out
This needs to be articulated at the Board level too and must form part of the overall strategic review of the organization
Commitment to having a top level exec drive the strategy?
This too is crucial. The person does not need to be identified on day 1, but without this person championing the offshore cause, the offshore entity will flounder to gain traction and commitment from the business leaders
Does the company have mature global engagement practices?
This may not be the case on day 1. There however needs to be a commitment to rapidly transition to that point
This is crucial when you consider the socio-cultural impact that an offshoring strategy can cause
Additionally the non-existence of this brings up potential conflict where the company may have had past vendor relationships that are “comfortable”
Finally, global roles could be performed out of India itself. Example: global customer support function
What does my going-in position look like?
MATURE GLOBAL
ENGAGEMENT PRACTICES
CEO LEVEL LEADERSHIP
COMMITMENT
COMMITMENT TO TOP LEVEL
INTERNAL CHAMPION
ARTICULATED BUSINESS
OBJECTIVES
It is not important to have every
objective nailed down completely on day 1. But a broad business
case needs to be articulated, and additions can be
made as the offshore entity
matures
This is non-negotiable.
Either it exists or it doesn’t
This too is non-negotiable. If the commitment is unsure, don’t
proceed
A low level simply means
changes need to be made. But this is crucial
and needs to be considered
EXISTING LEVEL - HIGH
EXISTING LEVEL - LOW
PLOT YOUR STATUS ON AN OFFSHORE CAPTIVE EVALUATION CHART. Example forCompany Z:
Shouldn’t attrition levels in India be a criteria?
A good people strategy sits at the heart of a successful captive
However attrition is not a criteria for taking a decision to enter India (at least not today)
There are several innovative and outstanding HR practices in place that minimize attrition and even use it as an opportunity to generate fresh talent and thinking
Thank you