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Outsourcing Special Report

by SAP and Partners: Politec USA Corporation

April 10, 2009

by SAP and Partners: Politec USA Corporation, Intelligroup, Secure-24, Hexaware Technologies Ltd., and CSC SAP NetWeaver Magazine - Volume 5, Issue 2
 

Inside

The following solution and service providers are highlighted in this special report:

Politec USA Corporation
Diversify Your Global Outsourcing Portfolio by Nearshoring in Latin America
Intelligroup
How Application Lifecycle Outsourcing Helps Businesses Run More Efficiently
Secure-24
Finding a Silver Lining in Uncertain Times
Hexaware Technologies Ltd.
Don’t Let the Economic Slowdown Stall Your IT Projects
CSC
A Success Story: The US Army Partnered with CSC to Fulfill Its Logistics Outsourcing Needs

The Right Outsourcing Projects and Partners: What to Consider When Undertaking an Outsourcing Project

Companies are becoming savvier in their approach to outsourcing. They are focusing on selecting the right projects and providers, managing these relationships with more scrutiny, and exploring a wider range of options for outsourcing their business processes, services, and even technology and hosted solutions.

For organizations looking to outsource, but mindful of their budgets, here are tips for implementing successful outsourcing projects and developing rewarding relationships with outsourcing providers:

  • Choose your outsourcing projects strategically. Don’t select projects based solely on cost-savings benefits; the lowest-priced vendor might not always be the best option. A partner p;rsquo;s offering should not only meet the project requirements, but also ensure service improvements and efficiencies. Select clearly def?ined business tasks for outsourcing, and don’t outsource core competencies.

  • Build solid relationships that allow for flexibility. Before jumping into a contract, be sure to find a trusted, reliable service partner with a proven track record. Create and maintain an environment that fosters transparent communication and mutual trust — taking into account that the future relationship could involve changes like mergers, acquisitions, and divestitures. Even if you’re selecting a particular provider as your primary partner, you can keep that partner honest by also including a mix of regional partners.

  • Seek help from outside resources. Consider the guidance of others who have gone before you — including customers, industry analysts, and other third parties — as well as benchmark studies to give you as much data as possible. Look to your IT auditors to manage risks before you contract and establish services.

  • Define clear outsourcing agreements. Selective outsourcing lets customers decide how much IT they want to outsource and for how long. As you work with your outsourcing partner, clearly define the scope of work, establish service levels, and determine appropriate pricing. Be sure to include a “sweep” clause in any contract to catch items that may have fallen through the cracks.

  • Put security measures in place. When granting an offshore workforce access to your company’s internal network, assign security professionals to monitor activities and limit the exposure of sensitive data (such as medical records, Social Security numbers, or tax returns). Closely review what data the workforce really needs to access. Schedule periodic visits to the offshore sites to regulate the security measures.

  • Offer training for the project team. Provide training for both your company’s and your partner’s associates (such as an outsourcing boot camp) focusing on how to work effectively in your company’s environment. For the most part, target the training at the project and service managers who will interact with the outsourcing partner on a daily basis.

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Peter Albers
President & CEO
(North America)
Politec USA
Corporation

Diversify Your Global Outsourcing Portfolio by Nearshoring in Latin America
Politec’s Industry Experience and Tenure Bring Stability to Outsourcing Projects

Many companies use custom software applications or other core technologies they have developed and perfected over time that are critical to their operations. But as important as these applications may be, the work of keeping them running smoothly is often not one of the company’s core competencies and may require a sizeable, dedicated IT staff. These companies can realize significant cost savings — and gain an experienced software maintenance team — through outsourcing. Companies exploring or re-evaluating their outsourcing options should consider looking into a nearshoring partner.

Why Nearshoring Might Be Right for You

Brazil is not typically the first location that comes to mind when considering an offshore IT destination. But perhaps it should be. Several unique factors set this nearshore country apart from the offshore market:

  • Time zone: Brazil is in a much closer time zone to the US than other countries to which companies commonly outsource. Because most of the US is only one, two, or three hours behind Brazil’s time, a large portion of the working day overlaps between the two countries, enabling real-time collaboration, consultation, and emergency response.

  • Geopolitics: Brazil has no ongoing military conflicts or major territorial disputes with any of its neighbors. Since regional tensions could affect not only foreign investment decisions but also currency markets and credit ratings, Brazil’s stability in this area is a significant advantage.

  • Demographics: Brazil’s workforce has some of the lowest employee attrition among regional outsourcing destinations. For example, despite continuous double-digit revenue and employee growth at Politec in recent years, our employee attrition rates have held steady at under 5% per year since the mid-1990s. In contrast, attrition levels can average 30% to 40% annually at IT outsourcing firms in other countries.

How Politec Can Help

Politec — a Brazilian-based nearshoring company — has decades of experience in application maintenance, solution testing, and SAP systems integration. This tenure sets us apart from companies in other IT offshoring destinations, including India. A main focus of Politec is Application Lifecycle Services, which includes these components:

  • Application development: Politec has substantial experience managing higher-value-added services, like custom application development. The staff at our 17 development centers across Brazil, Argentina, and Chile can develop a wide variety of applications (from COBOL to Java). This technology-agnostic approach allows companies to focus on more strategic IT initiatives, rather than on developing applications.

  • Application maintenance: Politec also performs application maintenance for applications that we develop for companies, or that companies create internally (SAP and non-SAP applications).

  • Legacy transformation: Another service Politec offers is taking a custom application that was written in an outdated programming language and updating it to run on a modern platform like .NET — which can drastically reduce maintenance costs and can reduce or eliminate dependence on obsolete or more expensive mainframe hardware.

  • Solution testing: Politec has over 500 senior engineers dedicated to full lifecycle testing.

  • SAP systems integration: Politec’s staff is skilled in helping SAP customers better understand and accomplish their lifecycle implementations, upgrades, learning solutions, as well as staff augmentations.

Each of these services brings with it substantial savings on projects of virtually any size. To learn more about these services and other ways that Politec can help your company, visit www.politec.com.

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Gopal Ramasamy
Vice President of
Outsourcing
Intelligroup

How Application Lifecycle Outsourcing Helps Businesses Run More Efficiently
Intelligroup’s Solutions and Services Enhance Application Performance and Transform Business Processes

Application maintenance is an integral part of running your SAP ERP system efficiently. Data and user growth, application of patches, integrating other applications, and addition of custom objects are some of the key factors that affect an application’s performance on an ongoing basis.

Increasing amounts of data, if not archived, will create performance issues for business users. Testing efforts increase if you don’t properly evaluate service packs. Poorly written custom code can potentially slow down the performance of the application.

When upgrading applications, both costs and risks heighten if you don’t fully understand the project’s complexity and budget for it beforehand. In essence, your application’s performance is constantly challenged throughout its life cycle.

Intelligroup’s Offerings Support IT Improvement Plans

We understand your pain over the application life cycle. You want efficiency gains, reduced support costs, and continuous improvement. But, efficiency alone is not enough. You want your technology platform refreshed, up to date, and service-oriented architecture (SOA)-enabled. You want your application portfolio rationalized so you can use your applications and execute your business processes more effectively.

To meet these demands, Intelligroup has several tool-based solutions to help businesses more efficiently manage their SAP applications. These solutions have delivered operational cost savings between 25% and 40% for actual customers.

Intelligroup’s Application Lifecycle Outsourcing services provide application support, including enhancements, development, and continuous improvement.

Intelligroup’s Tool-Based Solutions

At the core of our services are several ERP lifecycle management tools:

  • HotPac Analyzer provides assistance in determining the impact of support packs.

  • ArchivePac helps businesses develop an archiving strategy as per data retention and compliance norms.

  • SPEED ensures that your SAP application is performing efficiently.

  • BPA helps improve performance of custom code.

  • Uptimizer helps businesses assess, plan, and budget for SAP ERP and business intelligence (BI) upgrades.

A Spectrum of Outsourcing Services

Intelligroup’s Application Lifecycle Outsourcing services evolve your applications from running efficiently to being enhanced for effectiveness to ultimately transform your business processes. These services include:

  • Services around patch application, data archiving, and performance optimization

  • SAP functional, technical, Basis, and ABAP support

  • Business process improvement via root cause analysis

  • Technology platform refresh — introducing Web 2.0, SOA, and business process management

  • Application portfolio rationalization — leveraging SAP software as much as possible

  • Upgrade assessment, planning, and execution

  • Validation and testing services to ensure compliance and minimize costs

  • EDI and business partner integration

To learn more, email pat.gray@intelligroup.com or call +1-646-810-7405.

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George Surface
Director of
SAP Services
Secure-24

Finding a Silver Lining in Uncertain Times
How Hosting Partner Secure-24 Helped SMART Modular Save $1 Million Annually

What IT manager is not anxious about the success of his or her next big project? Managers want to ensure that they get all the business value possible out of their software implementation — and they want to do so cost-effectively, especially in today’s uncertain times.

That’s why so many companies — like SMART Modular, a global manufacturer of memory modules and display products for OEMs — turn to hosting partners to help them more efficiently manage their software solutions. With the assistance of a hosting partner, SMART’s IT team can focus on streamlining business processes to meet corporate business objectives rather than on the technical infrastructure. The silver lining? Dramatic savings.

Why SMART Chose Secure-24

Over the last few years, SMART implemented SAP NetWeaver Business Warehouse, SAP NetWeaver Portal, SAP Advanced Planning & Optimization, SAP Supplier Network Collaboration, SAP NetWeaver Process Integration, SAP Global Trade Services, SAP Solution Manager, and SAP BusinessObjects Access Control. With such growth in its technical infrastructure, SMART began looking for a hosting partner experienced with the SAP NetWeaver platform to outsource the hosting, security, and support of its mission-critical applications.

In addition to deep SAP experience, a critical requirement for a hosting partner was the ability to provide tight security. Since SMART used SAP NetWeaver Portal for its intranet and Internet access, SMART wanted to ensure that internal and external information was kept separate and secure. SMART’s other requirements for its hosted environment included:

  • High availability to service its global footprint

  • Sarbanes-Oxley Act compliance

  • Minimal maintenance downtime

  • A scalable environment to eliminate extra investments

  • Virtualization experience

In the end, SMART turned to Secure-24, an SAP-certified hosting partner to help it maximize efficiencies and realize significant savings. Secure-24, a leading provider of ERP hosting, security, compliance, disaster recovery, and technical managed services, provided SMART with an answer to its challenging requirements. This partnership led SMART to accrue substantial bottom line savings.

“Secure-24 delivered everything we needed, and then some,” says Dan Raven, SMART’s Global Director, Enterprise Applications. “With Secure-24, we have a knowledgeable and skilled partner for our SAP environment, and we save close to $1 million a year.”

Secure-24’s Managed Services Give SMART What They Need

Secure-24 provides customers with single-source support for the entire solution life cycle — from enterprise architecture through application development and integration, to application management and infrastructure support. Secure-24 enhances and manages business applications using a global distributed delivery model that focuses on building long-term relationships with its clients.

In addition, because SMART owns SAP Business Suite licenses and several components that it has yet to implement, Raven says, “Secure-24’s flexible and scalable solution allows us to maximize our existing ROI and implement new components without signif?icant increases in hosting costs.”

Learn More

Hosting is a thriving sector of the flourishing outsourcing market. Security, compliance, and disaster recovery are top priorities in today’s business environment, and companies recognize that hosting and outsourcing are the most cost-effective ways to address these concerns. Support for SAP solutions has always been a core focus for Secure-24, and customers benefit from a high quality of service, reduced costs, as well as reduced deployment, transitional, and operational risk. Learn more at www.secure-24.com, or call 1-877-724-0365, x245.

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Saravanan Arumugam
Financial
Consultant
Hexaware
Technologies Ltd.

Don’t Let the Economic Slowdown Stall Your IT Projects
Partner with Hexaware to Reach Your Optimization Goals and Minimize Costs

Right now, the primary issue on everyone’s mind is the slowdown of the global economy. Corporations of all sizes are estimating its short-term and long-term effects on the health of businesses, and organizational spending — especially IT spending — is coming under heightened scrutiny.

However, because IT is a critical enabler of business, companies cannot simply eliminate IT spending. Instead, they are re-evaluating and redefining their strategies and IT investments, looking to demonstrate improvement in eff?iciency and to achieve tangible results. CIOs are now asking, “How can IT deliver more with less? And what will put us on a fast track during this slowdown?”

Accomplishing these goals rests on the basics of outsourcing — that is, creating a long-term IT optimization strategy and picking the right partner to help execute this strategy. For example, one international bank was able to enhance the quality of its customer interactions while increasing operational efficiency and lowering costs. And it was the bank’s partnership with Hexaware that helped it reach its optimization goals.

A Beneficial Partnership in Action

The bank in our example wanted to accomplish seamless integration and communication with the accounts payable system of both its corporate and retail customers. To do so, the bank selected SAP NetWeaver Exchange Infrastructure (SAP NetWeaver XI) as the platform of choice to address business challenges and create a robust application roadmap. The key features of SAP NetWeaver XI include:

  • Synchronous, real-time transmission of data with immediate message delivery notices

  • The ability to “push” messages at delivery time or at a scheduled interval, from customer to bank or vice versa

And with SAP’s solid partner ecosystem, the bank had many options for finding a partner that would be able to implement this solution for it. In this case, what the bank sought specifically was an SAP-certified outsourcing partner to:

  • Provide a holistic virtual integration between the bank and its customers

  • Provide a seamless link from customers’ ERP systems to its own

  • Enforce strong security at the communication, transport, and data levels, in accordance with accepted industry standards

  • Ease the implementation, while minimizing disruption

  • Integrate message channels and formats to further secure communication channels

The bank chose Hexaware for its implementation expertise and its ability to create optimization strategies. Hexaware is also a premier SAP gold partner that has helped with more than 500 implementation, upgrade, and support engagements.

Following Hexaware’s nearshore-offshore model, the bank was able to achieve 30% cost savings. Hexaware’s implementation of SAP NetWeaver XI was seamless and efficient, and it demonstrated tangible business results, including an improved customer approval rating. In addition, the implementation was successful on both the IT and business levels, reaping continous solution benefits for the bank.

Learn More

Hexaware provides global rollout, implementation, upgrade, testing, and support services to industries worldwide. Our SAP-specialized teams ensure service delivery excellence and deliver innovative strategies for clients. Hexaware also generates value through a range of solution accelerators and tools. To learn more, visit www.hexaware.com or email info@hexaware.com.

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Sheri L. Thureen
Vice President, Defense Division, Enterprise
Business Solutions
CSC

A Success Story: The US Army Partnered with CSC to Fulfill Its Logistics Outsourcing Needs

To ensure it could continue to consistently and effectively supply materials to the members of its armed forces, the US Army needed to make some major changes to its supply chain and logistics system. Over the years, the Army Materiel Command’s (AMC) logistics supply systems had become outdated. It relied on 25-year-old logistics technology and 30-year-old business processes that could no longer meet the needs of today’s technologically superior Army. The Army needed a trusted partner and a fully integrated suite of software and business processes to transform its outdated logistics system. In 1999, AMC awarded CSC the contract to help it reengineer, modernize, and sustain its new logistics service.

A Successful Partnership

The partnership between AMC and CSC initiated the tasks of modernization and of day-to-day sustainment operations being outsourced to one IT services provider. Together, CSC and AMC developed the Logistics Modernization Program (LMP), which leverages SAP ERP technology to address all logistical business practices and represents one of the world’s largest fully integrated supply chain, maintenance, repair, and overhaul solutions.

Now, since 2003, the LMP has been fulfilling Warfighter requirements, and CSC is continuing to roll out the implementation. Today, the LMP manages $4.5 billion worth of inventory, processes transactions with 50,000 vendors, and integrates with more than 80 US Department of Defense systems. The LMP is also deployed to 4,000 users at the Army Communications-Electronics Life Cycle Management Command, Tobyhanna Army Depot, Defense Finance and Accounting Service, and several other locations. When fully deployed, the LMP will support more than 17,000 logistics professionals.

The Benefits of the New Logistics Program

The LMP reduces the logistics footprint needed to sustain the Warfighter and improves supply chain effectiveness throughout the Army. For example, with the LMP, an AMC item manager gains improved asset visibility, enhanced data accuracy and integrity, sophisticated reporting, and integrated financial management capabilities that enable supply planners to make strategic decisions about logistics operations in real time.

A unit’s logistics officer in Iraq can place an urgent parts order, for instance, which is then viewed by item managers in the US. In real time, these managers can check inventory balances available at two principal storage depots and use the LMP to verify the geographical location and mission project code of the unit’s request. With a few mouse clicks, the materials and equipment are on their way to the troops who depend on them. In addition, the LMP:

  • Integrates with SAP technology to maintain efficient inventory levels, reduce cycle times and infrastructure requirements, and provide significant improvements in materials management

  • Helps the Army reduce inefficiencies and related costs in its distribution system by reducing the accumulation of excess inventory, eliminating the duplication of requisitions, and enabling increased distribution efficiencies

  • Enables more accurate predictions of future materials usage and supply needs to allow the Army to maintain a smaller supply chain footprint

Learn More

The LMP offers the Army’s logistics professionals a robust set of supply chain management capabilities. As prime contractor, CSC is the program manager, systems integrator, applications service provider, and full partner with AMC in the transformation of business processes and the governance of the LMP solution. The LMP enables the Army to eliminate stove-piped legacy systems and leverage the power of instantaneous, enterprise-wide data to achieve a modernized, world-class logistics solution. For more information, visit www.csc.com.

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