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.

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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