Managing Global Processes and Remote Teams

1. Managing Global Processes and Remote Teams

2. IT Departments worldwide are challenged to simultaneously: Realize Cost Savings/Containment Ensure the Stability/Availability of Production Environments Enable New Business Strategies IT Challenges

3. Companies are: Reshaping according to core competencies, bringing greater value to the customer and higher productivity to the company Making outsourcing a long term strategy instead of a tactical solution Hoping to achieve numerous benefits from appropriate outsourcing Increase Agility Rapidly Capitalize on Emerging Opportunities Get Products to Market Faster Realize Tremendous Cost Savings Mitigate IT Risk IT Outsourcing Strategies

4. META Group, October 2004 (Penni Sanchez, Alan Katz) By 2006, Most IT Organizations will have an Offshore Strategy Offshore Outsourcing Market Exceeds $10 Billion Average Enterprise to Offshore 60% of Application Work by 2006 Political Backlash Toward Offshore Not Deterring Market Adoption Offshore Outsourcing Market to Grow 20% Annually Through 2008 Offshore Outsourcing Trends

5. Offshore Outsourcing Trend Still Gathering Momentum Gartner predicts that one out of 10 jobs with US-based IT vendors and service providers will be staffed offshore by the end of 2004 Jones, Lang, and LaSalle, Inc. study states that 31% of the companies surveyed had offshored some of their jobs. An additional 32% said they planned to do so in the next three years. Ross Research’s prediction of the top 10 offshore outsourcing trends of 2004: Outsourcing contracts will widen in Scope, Geography and Price in 2004 as offshore elements become more global and accepted The number of countries providing offshore outsourcing services will rise substantially in 2004 IT Outsourcing Trends

6. Indian IT Services the Main Player US Managers Currently Outsourcing IT Work to the Following Countries Computerworld Survey of IT Managers in US June 2004

7. Top Indian Vendor Growth Comparative Parameters (FY04) TCS Infosys Wipro* Sales Growth % 32.6 36.7 35.1 Profit Growth % 27.5 25.5 N/A Operating Margins % 27.3 25.5 22.0 *Only for Global IT Services Source: META Group, July 2004

8. More OutsourcingPredictions • Some Changes on the Horizon • TPI (Greg Blount and Paul Schmidt, 2004) - ‘We believe that the Indian market will continue to experience increased competition. What India has done is to create a blueprint for other countries to emulate so it should be expected that other locations such as China, the Philippines, Eastern Europe, and South America will increase their capabilities and become more competitive.’ • Also: • ‘Managing risk through multi-sourcing through multi-geographies will continue and grow’ • ‘Competition will provide more downward pressure on rates and pure play Indian companies’ margins will continue to erode’ • Giga Research predicts that attrition will skyrocket in the Indian IT services arena in 2004.

9. Prominent Causes of Outsourcing Failures Source: Outsourcing Center 2004 Survey

10. Other Outsourcing Inhibitors • Geopolitical Risks • Time Zone Differences • Lack of Infrastructure • Readiness of Client • Client’s Fear of Losing Control • Loss of Critical Skills • Client’s Fear of Loss of Confidentiality • Lack of Understanding of Business

11. Clients that understand the success factors of outsourcing, and can also mitigate the inhibitors, will achieve significant benefits Companies need to be ready - which means experienced, capable internal Project Management and standardized processes Top down management support required for successful outsourcing relationship Companies need to be flexible and embrace mixed models according to project objectives Client Challenges

12. Providers of outsourcing must understand the challenges of IT departments to reduce costs, support business strategies, and maintain aggressive technology agendas Providers must eliminate many of the inhibitors to successful outsourcing New providers need to differentiate themselves from the usual outsourcing paradigm by combining: Compelling Low Cost Same Time Zone Communication Collaborative End-to-end Perspectives Cultural Affinity Scaleable for Small/Medium Companies Strong Local Project Management Provider Challenges

13. Client/Provider Relationships, Trust, Flexibility Comprehensive Contract/Project Management Large Pool of Highly Skilled Resources Advanced Infrastructure, Telecommunications, Facilities Mature Delivery Models Business Oriented People Offshore SLAs/Metrics Well Defined and Understood Clear Objectives Top-down Support Outsourcing Enablers

14. Premise for New Outsourcing Model Successful IT outsourcing does not have to be limited to the big tech centers in India As long as the provider country has: Large technically educated middle class Stable, modern infrastructure Business experience If providers can be from anywhere that satisfies above requirements, why not reduce inhibitors such as time zone differences, cultural misunderstanding, communication issues

15. New Model Differentiators On-site Support Local staffing, project management and bench strength through staffing company partnerships Onshore Differentiators US Project Management Experienced, US-based management team for effective project management Cost Equal to or less than competition Solution Oriented Interactive, collaborative, and end-to-end business perspective Offshore Differentiators Time Zone Work day corresponding to that of the US Culture Westernized culture and values correspond to that of the US, facilitating communication and understanding Geography Provides geographic alternative Scope Services are scaleable and available for small and medium companies Communication English speaking dialect, culture similar to US

16. IT Outsourcing Cost Model Application Development Sourcing Cost Model Project Sourcing Cost Factors Project Sourcing Cost Adjustments AD Project Phases Efforts on a Phase Effectiveness Communication External/Market Adjustment Billing Rates Additional Project Costs • Technology • Expertise • Project • Management • Expertise • Business • Domain • Expertise • Language • Collaboration Source: Gartner 2004

17. GIT’s Value Proposition Compelling Low Cost and Low Total Cost of Ownership (TCO) Rates equal to or less than Eastern companies and with less overhead required due to local presence Same Time Zone Communication Work day corresponding to that of the US, facilitating communication and providing geographic alternative to Eastern companies Collaborative, End-to-end Business Perspective US and International business/technology experience of executives provide mature, interactive, big-picture business view Measurable, Agreed Upon Expected Results Project and life cycle processes ensure collaborative measures of success and prompt delivery of expected results Exclusive, Dedicated Resources Flexible staffing models allow assignment of committed resources to client projects and ongoing engagements Strong Local Project and Risk Management US based executives with extensive project management and risk management experience ensure project control and success Accessible to Small/Medium Size Companies Scaleable services allow access by small and medium size companies unable to attract the attention of large providers Cultural Affinity Westernized culture and values similar to that of the US, facilitating communication and understanding

18. GIT Corporate Structure Global Intelligence Technology, LLC (GIT) USA Clients Global Intelligence Technology LLC USA Sales, Liaison and Delivery USA Service Master Agreement LA Clients Service Master Agreement Mirroring Development Centers IT Factory and Staffing Argentina Specialized Subcontractors/Partners (when necessary)

19. Latin America Shows Outsourcing Promise • Study by Jones, Lang, LaSalle, Inc., reported by the Wall Street Journal, Oct. 2004, (Ryan Chittum) • Latin America comes out ahead of India and China in the offshoring equation when factors like labor quality, labor supply, and time-zone differences are taken into account. • Increasing need for work forces that speak Spanish could mean more jobs for places like Mexico City and Buenos Aires. • Ranked by the size of the labor pool and the quality of labor, the top city was Manila, the Philippines. Sao Paulo; Mexico City and Buenos Aires were next.

20. Cost Among lowest countries for global outsourcing Superior location advantages: time zone, distance, responsiveness Infrastructure Solid communication and power-supply infrastructure development over the last ten years 2001 most significant renewal of PCs and servers in Latin America Commitment to innovation and ongoing investment in infrastructure Human Resources Large, highly skilled IT work force Proven competencies in developing and maintaining large-enterprise infrastructures and programs Workers possess a wide range of technology skills, business background, and client interaction skills Why Argentina? Available Skill Sets University Students per 100.000 inhabitants

21. 14 35 38 40 36 Why Argentina? Best Ranking 1 Worse Ranking 49 Ranking of Argentina according to Meta patterns Knowledge Jobs • Argentina is ahead of: • Poland 40 • Turkey 36 • Slovenia 36 • Russia 34 • China 34 • Philipines 34 • India 33 Globalization Economic Dynamism and Competition Transformation to a Digital Economy Technological Innovation Capacity • Argentina is behind: • Czech Rep. 28 • Brazil 27 • Hungary 27 • Estonia 27 Overall Ranking 32 Argentina is at the same level of many of today’s outsourcing leaders in terms of its infrastructure, workforce, and country’s commitment to change. Source: Meta Group, March, 2003

22. Outsourcing Agreements define Statements of Work (SOWs), Service Level Agreements (SLAs), Operating Principles and Metrics Project Management Processes and Tools used offshore/onshore Standardized Development Life Cycle being used offshore with phase deliverables defined in detailed schedules Risk Assessments and Contingencies produced as early phase deliverables Onshore/Offshore Architecture: VPN or Frame Relay connection to US allowing offshore developer access to shared files Same firewall rules apply as currently in place at company Repository file servers may be required onshore if deemed appropriate by client Reporting Detailed Project Status Report weekly Executive Status/Early Warning Report monthly/ad hoc Ongoing Issue Log maintained and reported Tools MS Project, Configuration Tools, Collaboration Tools (as required by client) Processes/ Methodologies

23. Contract/Agreement Structure Defines the legal terms of the agreement Defines the work to be performed Master Contract/Agreement Operating Principles SOW 1 SOW 1 SOW N SLA 1 SLA 2 SLA N Defines the procedures shared between client and outsourcer Metrics Definitions Defines the acceptance criteria Specifies the metrics to be used (context and content)

24. Project Organization Sample STEERING COMMITTE (weekly) Project Directors Project Managers (Ad-hoc) CUSTOMER PROVIDER Project Director Projector Director Communication Project Manager Project Manager Reporting PMO PMO • Project Plan • Issue Log • To Do’s Systems Business Systems Business Technology Technology

25. Risk Management • Early Risk Assessment with Impacts/Mitigators • Robust Project Management Processes • Software and Data Backup and Recovery • Physical Site Security • Business Continuity Protection • Infrastructure Redundancy

26. Create Knowledge Transfer Plan with detailed responsibilities Start with pilot Maintain employees offshore Understand cultural differences Visit offshore facilities - establish relationship Knowledge Transfer

27. Global Outsourcing Models Offshore Completely outsourced to single offshore provider Riskiest Onshore Bring offshore resources to local geography Costlier, more overhead Mixed Combination of onshore/ offshore Most effective model

28. On-site/Off-site Resource Mix • On-site/off-site mix varies by project: • Size of project • Complexity of project/technology • Level of specificity of requirements • Duration of project • On-site team is critical and must be skilled in global projects • Technical ‘translation’ • Cultural differences • Compliance with quality standards • Commitment to plan

29. Application Delivery Model Unique/ Creative Architecture Integration Development of Tools, Utilities & Middleware Report Creation User Interface Design Iterative Development Task Characteristics Conversion Highly Specified Development Re-engineering Application Maintenance & Enhancement Package Customization Efficient/ Repeatable Low/Freestanding High/Interactive Required Client Interaction Source: Clarity Consulting, Ian Hayes

30. Choosing the Right Partner Unique/ Creative Agile Methodologies Offshore Delivery Model On-site Staffing Model More Open Culture Task Characteristics Robust Project Management Processes Offshore Delivery Model Mixed Delivery Model Efficient/ Repeatable Hierarchical Culture Low/Freestanding High/Interactive Required Client Interaction Source: Clarity Consulting, Ian Hayes

31. Parameters Ratio of onshore to offshore Location of data, source code Location of computer resources Project governance Interfaces - who works with who Level of knowledge transfer needed Logistics Communications Data Telephone Video-conferencing Face-to-face Collaborative Work Environment Support Tools (project management, configuration, testing, QA) Travel Other Model Characteristics

32. Thank You! Carlos D’Elia CEORobert Morgan – EVP & COO