SDLC

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From Good to Great Triple the Value from Global
Sourcing
NASSCOM 2007 Ian Hau, Ph.DSVP, GlaxoSmithKline
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Do more, feel better live longer.

• 2nd largest pharma company, 7 of the worlds
  pharmaceutical market.
• Sales gt 42 billion, pre-tax profit gt13 billion
• covers 80 of the worlds population
• gt 3 million vaccine doses are delivered everyday
• gt100,000 employees in 119 countries.
• Research and development
• gt 15,000 RD staff, gt 20 sites in 11 countries.
• Investment of 16 m/day (5.6B/year)
• 140 projects in clinical development
• IT
• Overall IT Spend 1.2 Billion
• Internal FTE 4300
• Offshore/outsource FTEs 1300/1000

GSK Confidential
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What Level of Net Saving Are You Achieving thru
Offshoring

• 0-10
• 10-20
• 20-30
• 30-40
• 40-50

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We can triple the value from Global Sourcing
Only if Global Sourcing is Used to Drive
Application Life Cycle Optimization
100
Standardization/ Consolidation
100
-
90
ALC Process Improvement
80
Labor Arbitrage
70
60
50
40
30
20
10
0
Baseline
Cost
Source McKinsey Global Institute


Note Numbers indicate average range of savings
from each category
ry
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Case Study Standardize, Consolidate and
Offshoring L1 Incidents
Cost Per User For Level 1 Incident Resolution
6
With Improved Incident Resolution Time
Incident Resolution Cycle Time
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And All Time High in Client Satisfaction
Client Satisfaction
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Application Life Cycle Optimization Strategy

• Improve cost, speed, and quality at the same time
  by
• Establish and optimize a set of global
  application shared services and eliminate
  duplications
• Standardize and optimize a set of App Life Cycle
  processes
• Optimize and scale up the global sourcing model

GLOBAL APP SHARED SERVICES
What
Who
How
ALC PROCESSES
GLOBAL SOURCING
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Guiding Principles for Application Life Cycle
Optimization

• Most spend in IT is driven by Applications (
  75)
• Majority of spend is in Support (70)
• 10 of portfolio accounts for 70 of
  cost/value/user experience/load
• ERP apps
• Shared App Services
• Productivity apps
• Bespoke apps thru standard technologies (.net,
  java, Oracle)
• ALC Services
• Testing, Decommissioning
• Standard Support e.g. Level 1 and 2 incident
  mgmt

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Guiding Principles for Application Life Cycle
Optimization

• Support cost and quality can be optimized through
  consolidation, standardization and global
  sourcing together
• Production defect is a key driver of Support -
  mostly in non-functional requirements (SLAs) and
  Changes
• 30 - 60 of defects in production are originated
  in Requirements
• High Availability is mostly addressed thru system
  design, not support.
• If correcting a defect in requirements costs x,
  repairing it in production costs 500x
• Cost of defects is even higher estimated 60b in
  the US (NIST 2002)
• Most defects (gt1/3) in production could have been
  caught via effective Testing. However, testing is
  usually the step we cut due to the time pressure
  to deliver projects
• There are good global sourcing partners, but a
  good marriage need commitment from both sides

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Application Life Cycle Optimization Strategy

• Improve cost, speed, and quality at the same time
  by

Formal Application Service Catalog
GLOBAL APP SHARED SERVICES
ALC PROCESSES
GLOBAL SOURCING
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Innovation in the Offshoring Service
CatalogOnline Gods Click
RATE CARD

• TEMPLES PUJAS
• Kalighat TempleTarakeswar
• TempleDakshineswar
• TempleTarapith
• TempleAdyapithKashi
• viswanath TempleSankat
• Mochan temple 
• Vaishnao Devi Shrine
• Maha Lakshmi
• Siddhi Vinayak
• Puri Jagannath Temle
• Venkateswara Temple
• Durga Puja
• Radha Krishna Puja
• Shani Puja
• Satya Narayan Puja

Source - http//www.geocities.com/kaalighat/index.
htm
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Example of a Global Application Service Catalog
Vendor
Resources by
GSA Service
What opportunities are we missing?
Bespoke
Enterprise
Application
Development
ALC Services
Applications
Services
Support
Total 282
Total 258
Total 183
Total 279
Business
VB .Net /
Analysis
Middleware
SAP
ASP
Consulting
Development
Development
Development
VB .Net /
User Centered
Middleware
SAP Support
Design
Support
ASP Support
Functional
Testing
Business
Java
Siebel
Intelligence
Development
Development
Regression
Data
Testing
Warehouse /
Java Support
Siebel Support
ETL Tools
Stress Load
Testing
Product
Enterprise
Document
Lifecycle Mgmt
Application
Notes
Mgmt
(Agile)
Testing
Development
Development
JDE Support
Document
Notes Support
Mgmt Support
Help Desk
L1 Incident
Mgmt
PeopleSoft
App.
Enterprise
Other
Search
Performance
Development
Development
Mgmt.
LIMS Support
(incl TOPAZ)
Enterprise
Search
Other Support
Support
Decommission
ing
PROJECT MANAGEMENT DEMAND MANAGEMENT (54)
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Application Life Cycle Optimization Strategy

• Improve cost, speed, and quality at the same time
  by

Formal Application Service Catalog
GLOBAL APP SHARED SERVICES
ALC PROCESSES
GLOBAL SOURCING
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Software Defects Introduced Early and Found Late
Financial services Industry
Source NIST Economic Impact of Inadequate
Infrastructure for Software Testing, May 2002
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IT Application Strategy ALC Processes

• Standardize those elements of the ALC which
• Reduce defects in the production environment
• Requirements Management
• Application Testing
• Production Acceptance (i.e. Go-Live)
• Prevent and resolve incidents efficiently and
  rapidly
• Incident Management
• Problem Management
• Change Management
• Manage the application environment effectively
• Standard Service Levels Metrics
• Application Decommissioning

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Application Life Cycle Optimization Strategy

• Improve cost, speed, and quality at the same time
  by

Formal Application Service Catalog
GLOBAL APP SHARED SERVICES
ALC PROCESSES
GLOBAL SOURCING
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Strategic Partnership between GSK and Satyam
From Concept to Reality Value beyond Labor
Arbitrage

• Process and Operations
• Reduce cycle time for Work Orders
• Reduce cycle time for resource readiness
  on-boarding
• Manage Unplanned to planned attrition
• Continuously improve Infrastructure and translate
  it to benefit realization
• Imbed continuous improvement Joint BDR planning
  and delivery
• Drive Consolidation, Standardization and ALC
  Optimization
• Grow Existing Shared Services and Develop New
  High Value Shared App Services. Optimize the use
  of Service Catalog
• Further Optimize Offshore Leverage (gt80)
• Risk Management
• BCP and ITCP
• Diversify location risks

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Difficult Choices IT Leaders Must Confront

• Headcount Policies
• Consultants
• Contingency Workers
• Internal vs external
• Project Funding
• Shifting funding towards the core portfolio
• Structure
• Country vs Regional/Global Services
• Shared Application Services vs Business Unit
  specifics
• Owners for the core portfolio of IT Services
• Internal vs external
• Architecture Standards
• ALC Processes
• Support processes
• Decommissioning policy
• Testing and Production Acceptance processes

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Strategic Partnership between GSK and Satyam
From Concept to Reality
Value beyond Labor Arbitrage

• Process and Operations
• Reduce cycle time for Work Orders
• Reduce cycle time for resource readiness
  on-boarding
• Manage Unplanned to planned attrition
• Continuously improve Infrastructure and translate
  it to benefit realization
• Imbed continuous improvement Joint BDR planning
  and delivery
• Drive Consolidation, Standardization and ALC
  Optimization
• Grow Existing Shared Services and Develop New
  High Value Shared App Services. Optimize the use
  of Service Catalog
• Further Optimize Offshore Leverage (gt80)
• Risk Management
• BCP and ITCP
• Diversity location risks
• Access to Thought Leaders

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Next Level of Capabilities Needed from IT
Sourcing Partners

• Foremost expert in optimizing Application Life
  Cycle
• Shared Service Catalog
• ALC Processes
• Industry domain knowledge must be reflected in
  the expertise in optimizing core Business
  Processes for the respective industries
• Reduce touches to enable flows
• Enable best practices to be propagated globally
• Enable risk management
• Enable global sourcing (BPO)