DarwinSuzsoft Makes China the Destination for IT BPO

hirty-to-Sixty Percent Savings over India, with Assurances of U.S. Controls, Drives Largest Chinese BPO Deal to Date

WAKEFIELD, Mass.--(BUSINESS WIRE)--DarwinSuzsoft, the American IT outsourcing services leader in China, has introduced a full suite of IT Business Process Outsourcing (BPO) services, linking demand for sustainable savings and better satisfaction levels to China’s deep pool of IT talent. It has also signed the largest BPO services deal in China to date, with India-based Datamatics.

DarwinSuzsoft’s China-based IT BPO capabilities are among the most scalable in the world, with engagements ranging from a dedicated staff of 50, upwards to 1,500 – the scope of the Datamatics collaboration. Its clients enjoy fully integrated U.S.-China project and process management, and 30-60 percent savings over comparable pricing in India.

“The global outsourcing landscape has dramatically shifted, and so have the measures of success,” said Dan Ross, CEO of DarwinSuzsoft. “China meets the new standards – technical competence, ability to deliver, workforce stability, and long-term sustainable savings. We’re the fast-track gateway to this irresistible advantage.”

DarwinSuzsoft’s BPO clients gain faster processes, improved service and product quality, and significant cost savings – coordinated with other IT consulting and development services – through a single point of control and accountability. Through its unique “smart-shoring” strategy, DarwinSuzsoft taps key regions in China like Suzhou, Nanjing and Dalian, which are ideally suited for these BPO services because of their strong university systems and loyal, inexpensive workforce.

As a full-service IT outsourcing partner, DarwinSuzsoft helps global CIOs align business objectives with sophisticated services – from application development and re-platforming, enterprise architecture design, quality assurance and testing, and commercial software development and maintenance, to cost-effective BPO offerings. Its customers include more than 300 of the world’s top financial institutions, software firms, insurance providers, healthcare companies and telecommunications firms.

DarwinSuzsoft Guides Datamatics into China

Datamatics, an IT consulting and services firm headquartered in India, is tapping DarwinSuzsoft to establish a 1,500-person BPO offshore development center (ODC), gaining trusted guidance on Chinese market entry, an accelerated ramp-up, immediate cost savings and a risk-adjusted offshoring portfolio.

With this deal, DarwinSuzsoft has become the largest BPO service provider in China – three times larger than its closest competitor. The firm’s established presence across six regions in China ensures clients receive world-class service without the complexity that undermines many outsourcing relationships.

DarwinSuzsoft’s BPO services include: data entry, capture, conversion and verification; data reconciliation and cleansing; document coding and indexing; processing of forms, claims, credit cards or stock trades; and call center and data center support operations.

About DarwinSuzsoft

DarwinSuzsoft is a leading provider of information technology (IT) and communication services, combining 20 years of consulting experience with a deep engineering presence in China. IT services clients gain local accountability, highly skilled IT professionals and high-quality outsourced development capabilities, at 30-60 percent savings over most Indian firms. Communications clients stay ahead of rapidly changing market demands with nimble design, deployment and optimization services. With more than 1,000 employees in Boston, San Francisco, Shanghai, Beijing, Hong Kong, Suzhou and Dalian, China, DarwinSuzsoft serves many of the world’s largest companies in financial services, software, insurance, healthcare and telecommunications industries. For more information, visit www.darwinsuzsoft.com.

The Ten-Minute Manager’s Guide to . . . Outsourcing

By Lisa Bertagnoli, Special to R&I

Cooking great food and serving it well are a foodservice operation’s most important jobs. For everything else, there’s outsourcing.

Outsourcing "is something every restaurant should consider," depending on the operation’s size and the capabilities of the staff, says Isidore Kharasch, president of Hospitality Works, a Deerfield, Ill.-based consulting firm.

While Kharasch routinely recommends outsourcing payroll, due to complicated tax laws and potential repercussions from easily made errors, he says that outsourcing other functions can give an operation a fresh perspective, especially on basics such as menu and recipe development.

"Sometimes you need an outside set of eyes to look at things," he says. And that can be true for functions as different as developing pulled-pork recipes or attracting online orders.

Sign, Seal, Deliver

Le Colonial, an 11-year-old restaurant in Chicago’s upscale Gold Coast neighborhood, used to offer delivery on a limited basis. Customers who lived within walking distance of the 120-seat restaurant could phone in orders and busboys would walk to customers’ homes (or go by cab in bad weather) with meals.

To expand its delivery area and leave busboys in the restaurant, Le Colonial three years ago outsourced delivery. “We began working with the company on a trial basis and they did a great job,” says Joe King, partner at Le Colonial. He chose the contractor because it delivers to most Chicago neighborhoods, while other services he considered offered more-limited delivery areas.

The delivery service posts Le Colonial’s menu, along with those of other restaurants it serves, on a Web site. Each online order is routed to the appropriate restaurant, then picked up and delivered. The service’s fee is 30% of each delivery order; King says there were no startup charges.

Using the service has increased delivery orders from about 1% of business to 4% of sales. “It’s a very convenient source,” King says. The service is cost-effective because there is no additional payroll or overhead—other than the cost of food and the packaging—for delivery orders. A bonus is that the orders are largely incremental business, he adds.

Outsourcing delivery makes sense from an operations standpoint as well. “We’re not using restaurant staff to perform other tasks,” King says.

Customers are happy with the service to date. “The delivery firm handles our goods very well. Everything is in a temperature-controlled box, and they don’t rattle things around,” he says, adding that if a customer were to complain about cold or messy food or a late-arriving order, the delivery company would absorb the cost of the order.

Cleaning Solution

With three kitchens and round-the-clock service, the China Grill location in Chicago’s Hard Rock Hotel gets a workout. To ensure the facility stays in top shape, management outsources cleaning.

A crew of eight to 12 arrives every night at 11 p.m., working until 7 a.m., says Gerry Muldoon, general manager for the 181-seat, casual-upscale restaurant. “The company does a thorough cleaning: floors, walls, underneath cupboards, et cetera,” he says.

China Grill contracts for cleaning, and has since the restaurant opened two and a half years ago, because of its high volume, and to have professionals make the operation “100% clean,” Muldoon says. “There’s a lot to clean and it makes more sense for us,” he says of outsourcing the task.

It’s not cheap, however. Muldoon estimates that the cleaning company is paid about four times what handling the task in house would cost. “It’s a very expensive measure for us,” he says.

Using the service requires some prep. Security measures must be taken to prevent theft by workers. Plus, the cleaning must be monitored and managed. Muldoon changed services last year after becoming unhappy with a former company’s work.

The overnight crew does not absolve the staff of cleaning chores. Line cooks and other personnel still have daily cleaning responsibilities, Muldoon says.

Outside Perspective

Pockets, a 10-unit chain of quick-service sandwich restaurants, doesn’t employ a full-time marketing executive. Rather, the Winnetka, Ill.-based chain outsources marketing functions to a local consultant.

Fred Brewer, who handles other restaurant companies in addition to Pockets, began working with Pockets about eight years ago, says David Litchman, Pockets’ president. The reason is mainly cost: “He’s able to work for us for a reasonable price because he has other ways of generating income,” Litchman says. He does not view Brewer’s other restaurant clients as conflicts of interest.

Brewer’s chief contribution to Pockets has been launching its Web site and an accompanying online ordering system. Pockets began accepting online orders about three years ago, and e-orders now account for 50% of business. Litchman says that online orders average $13, compared to $11 for in-store delivery or takeout. Brewer’s e-mail campaigns to persuade customers to order online “have been the biggest success,” Litchman says.

Cost savings are the biggest outsourcing benefit. “A full-time person would have cost us twice as much, and an outsider brings new ideas to the table,” he says.

Pockets’ expansion plans call for three to five units to open in the next year, and Litchman is beginning to offer franchises. As the chain grows, he says he might consider bringing marketing in house.

Chef for Hire

Ed Doyle doesn’t work at SoulFire, a 75-seat casual barbecue restaurant in Allston, Mass. Still, Doyle, a chef-consultant, helped design the restaurant’s kitchen and menu, and recently helped owner Wyeth Lynch with a complete menu revision.

Lynch initially hired Doyle, who owns a Boston-based consulting firm, to help with kitchen and layout. Doyle’s initial work convinced Lynch to continue working with the consultant. “Ed took pride in what he was doing, and he wasn’t going to leave me hanging on anything,” Lynch says.

That hunch has proved correct. “Ed calls me and asks, ‘How are things going at the restaurant?’ and he’s not billing me for that phone call,” Lynch says. “That tells me I’ll get a lot out of him when I do call him to change things.”

The two meet once a month to discuss the menu as well as operational procedures; recent projects include reformulating SoulFire’s pulled-pork recipe. He says the SoulFire staff is happy with Doyle’s input, rather than resenting his part-time presence. One downside, though, is that a consulting chef isn’t in the kitchen daily, and therefore cannot pick up on operational nuances. Overall, “it’s worked out great,” Lynch says. Consultants “aren’t concerned with hurting people’s feelings; they’re not as tied to the process.

“Sometimes it’s good to say, ‘We’re going to listen to this guy and take his lead,’” Lynch says.

Net Gain

Four years ago, Hakata Grill in New York City employed 11 delivery people and five telephone order-takers. These days, the pan-Asian restaurant has 20 delivery people and one phone order-taker. Todd Nakasato, managing partner, attributes the growth to outsourced online ordering.

Nakasato added Hakata Grill’s delivery menu to a Web site that posts menus from dozens of restaurants. Customers sign on to place orders; the system handles credit-card payments and routes orders to the restaurants but does not handle delivery. The online firm charges a fee for the service.

Additionally, Hakata Grill gains access to corporate customers that the restaurant would not otherwise have reached. The system “has allowed my restaurant to be marketed to hundreds of companies I wouldn’t have been exposed to before,” Nakasato says. Online orders account for 80% of Hakata Grill’s delivery orders, with nine of 10 coming from corporate customers.

Get More From Outsourcing

April 16, 2007 (Computerworld) -- Most of us fear outsourcing, and with reason: Our jobs are on the line. Still, most of us work for organizations that will engage in one or more outsourcing deals. Learning how to deal with the changes outsourcing brings can actually work in our favor. Here are some tips.

Work on the outsourcing relationship.

Bruce Stewart

Most companies put little time or effort into these relationships, which soon become little more than a battle over invoices, due dates and other contract-related issues.

It’s critical to treat the relationship formally, assigning specific point personnel to handle it (even if at this point you have only a small internal office of the CIO). This is especially critical when most of the people on the “other side” are your own ex-colleagues. You might like the “feel good” factor of seeing your former colleagues continue to identify themselves as members of your team, but beware. I’ve seen some who still did that 18 years into an outsourcing relationship. The problem is that those people never made the transition to representing their new employer and thus were unable to bring its best thinking to bear on the client’s interests.

Focus on the future. Most long-term sourcing transactions go through at least one major contract renegotiation midstream. There’s nothing wrong with this — few of us are brilliant enough to anticipate 10 or more years of changing needs. But if you’re going to go through a year’s worth of renegotiation, why settle for a few minor tweaks in the pricing algorithm and not much more?

It’s not enough to enter into renegotiations focused on what has changed about your company’s IT needs since you engaged the sourcing firm. Focus on change itself, the inevitable byproduct of passing time. You’ll see, for instance, that tying the sourcing partner’s resources to the configuration just makes it difficult for the partner to make changes that could save power, servers and other underlying costs. You might also decide to build staff redeployment and retraining into the contract. You could pay a defined sum toward them each year while putting in safeguards that would protect you from paying for severance if the outsourcer must lay off some staffers because of a lack of work. Another idea for renegotiation: Pay the sourcer a bonus for cutting costs more than expected or consistently delivering quality results.

Commit yourself. When you outsource a business process, do it cleanly. I’ve seen outsourcing relationships in which a single transaction passed back and forth over the sourcing boundary five or six times. Commitment can only come with trust, but it’s important to make up your mind that your objectives are indeed trust and commitment. And, make no mistake, a failure to commit shows up as a lack of success — on both sides of the table. Once you have established trust, you will be less concerned that you might be able to get something done a little cheaper through someone else, and you will become comfortable with not spelling out precisely how the partner should do everything. In other words, you will learn to treat the partner like the next department over.

By the end of 2008, more than $120 billion in outsourcing deals will be up for renewal. Many clients are in deeply unhappy relationships, yet most will end up outsourcing again. Now is the time to hone your ability to form partnerships. You’ll be mastering an in-demand skill.

year of the Pig good for BPO?

The Year of the Pig will see corporations focusing more on regional issues and needs within the organization, according to a study of business process outsourcing trends for the Asia-Pacific, which excludes Japan (APEJ).

The study found that while much of the region is still at its nascent stages of development for BPO, several trends are starting to emerge that are unique to the APEJ region.

More autonomy is being pushed to regional decision makers across various departments, requiring them to better align their BPO needs with business and global objectives. BPO trials and pre-configured solutions are also gaining momentum as APEJ companies look for solutions that address specific regional outsourcing needs.

According to authors, BPO customers in APEJ will be taking on short-term trials before making long-term commitments this year. BPO pilots will steer new deals in the APEJ region more than ever before. BPO trials will become an important in-road for a BPO go-to-market strategy as clients will be more receptive toward pilots before signing on for a long-term, full-scale BPO contract.

Thinking out-of-the-box will also be driving knowledge process outsourcing in 2007, the reports authors added. APEJ companies are starting to look at innovative solutions in outsourcing various areas related to documentation such as printing, document digitization, archiving, editing, graphics layout, copy writing, proof reading, design and even research.

Knowledge process outsourcing is becoming more evident as companies realize the cost savings of outsourcing this component that is predominantly administrative in nature and time-consuming to get a fresh perspective on knowledge components within the company.

Pre-configured solutions will also be enabling speed and agility. Companies cannot afford to waste valuable resources in treating every BPO activity uniquely in their outsourcing engagement. There are many positive aspects to pre-configuration in a BPO environment, with the main benefits being speed, agility and cost management. Pre-configuration helps to find common processes, automate some parts of it and enables better leverage through sharing of resources to serve the common procedures.

Long viewed as the BPO powerhouse, India is facing increasing competition from other countries, notably China. Although India will remain the major hub of BPO activities over the next few years, China is increasing its momentum by attracting large BPO investments to its cities. Even though much of the existing outsourcing projects in China tends to be processing services, many companies are starting to look to China for higher level BPO activities.

The study also underscored the importance of global delivery, noting that this will be the "deal clincher" for BPO service providers. BPO service providers that desire to be true global players require global delivery centers, beyond presence in India and/or China in order to win key regional deals. As BPO clients demand seamless support across their global operations, many are seeking vendors who are capable of servicing their outsourcing needs using a combination of offshore, onshore and near-shore locations.

Business process outsourcing is distinct from processing services. BPO is more strategic and involves transformational activities that align a company's outsourcing engagements to corporate objectives. On the flip side, engagements that involve high-volume, transactional outsourcing of discrete activities such as payroll and billing are classified under Processing Services. Thus, giving rise to the popular phrase "Mess for less" for Processing Services, which is valued distinctly and separately from BPO.

Reinventing Innovation: The Next Level of Outsourcing

Remember when outsourcing was thought of in terms of call center operations and IT coding?

Not anymore.

Now, companies are leveraging offshore partnerships and highly-skilled global talent as a means to deliver innovative products and to stay ahead of emerging customer needs.

Traditional Western centers of innovation such as Silicon Valley and Boston are being joined by centers in Bangalore and Beijing, in order to form a global technology and innovation ecosystem.

However, it's not just that companies regularly look globally for talent that is in short supply in their own countries. It's also about how people are thinking about innovation -- where it comes from and how it should be managed.

Approaches to innovation often lack sustained success that is most commonly manifested by inconsistent and underperforming business results. Many companies rely solely on in-house R&D activities (mostly "D") for innovation while others think of innovation as a bright idea or a patent generated by a smart engineer.

Companies are blinded by the wrong measures, such as the percentage of head count working in product development-related roles or calculating R&D spend as a percentage of revenue. The byproduct of this is a false sense of security. How many companies really know how well they are doing when it comes to the innovation yield from their R&D investments? How many understand which practices produce measurable results -- and at what cost?

The Interconnected Ecosystem

Sustained levels of product innovation, however, can be achieved with a systematic approach to software development and engineering initiatives that take advantage of integrated innovation ecosystems -- networks of diverse, interconnected cultures of broadly talented people utilizing a collaborative-based knowledge management matrix.

What's key here is the concept of the ecosystem. In this case, it is true that "two heads are better than one." Tapping into various communities and partners can create a more fertile environment for innovation because you can take advantage of new perspectives.

Some of the best new available sources can be found among the emerging set of product engineering outsourcing service firms. Before we investigate the processes and benefits of developing relationships with product engineering outsourcing partners that result in higher innovation yields, we must first lay out how innovation is classified in this context.

Innovation could be defined as an invention that adds sustaining value or creates a breakthrough value -- the kind of value you can quantify in the form of new revenue, additional market share, and increased valuations.

Invention and innovation are not synonymous. Inventions are product ideas or new features, regardless of whether or not they meet a potential customer's needs (e.g., broccoli-flavored chewing gum). It's new, maybe even unique, but who wants it and what value does it provide?

Innovation, on the other hand, is the application of new or existing technology that serves the unmet needs of existing customers (sustaining) or that opens new markets (breakthrough). As an example, think cell phones.

Here comes the big question: "How do I create a culture of innovation with my outsourcing partner that promotes co-creation and optimizes my R&D resources?" The answers are surprisingly obvious.

Pick the Right Outsourcing Partner for You

Consider an outsourcing partner who understands your product development goals, and can deliver the resources, partnership model and measurement mechanisms to meet them. Product development is a very different task from IT outsourcing, so tread carefully in your selection process.

The partner's past success must be scrutinized -- look for examples of how it drives and supports innovation. Make sure that creating a highly collaborative and accountable work environment is a top priority for your partner and that they take proper measures to recruit and retain employees who are capable of, and empowered to, drive innovative approaches to software engineering.

Innovation cannot be a marketing tool; it has to be tied to R&D's impact with profitability.

Seamless Collaboration With Your Partner

The difference between an invention and innovation often hinges on an organization's ability to execute.

In a global R&D organization, the biggest obstacle to getting the most out of a global innovation ecosystem is to develop a true sense of team and enable seamless co-creation. The C-Suite can set the tone by engaging stakeholders early on in the process to promote buy in and foster a collaborative relationship that relies on trust and accountability.

As companies continue to globalize R&D functions and outsource larger portions of their work, they need to ensure that they still get all the innovation they need to compete effectively.

Up to a third of the insights and innovation that shape next generation products come from the development stages of product engineering. Your firm can't afford to work with an outsourcing partner who does not have the capability to deliver innovation along with productivity, speed and quality.

By breaking through conventional attitudes, aligning goals and jointly managing resources, companies and their service providers can overcome internal barriers and work toward a profitable, mutually-beneficial goal.

What once was a task-oriented relationship has evolved into a goal-oriented one, as development teams worldwide are being leveraged to improve overall business and R&D performance. Companies no longer worry about where their resources are located and who signs whose paycheck -- the only thing they care about is receiving a high return on their R&D investment.

Manage and Measure the Innovation Process

While not all innovation comes from R&D and product-related functions, it is an important strategic outcome for R&D organizations along with other performance targets. If your mission is to identify and execute new products and services that materially contribute to revenue, margin, and market share, then you are living the "innovation imperative."

R&D outcomes, not the amount an organization spends on R&D, are the true measure of the value of innovation.

An important shift needs to be made from concentrating effort on sustaining innovations, which only add incremental value, to ensuring a better balance to also achieve a steady stream of breakthrough innovations. A strong and steady stream of invention generation -- and tight execution processes to transform them to innovations -- is the key.

Because of its subjective nature, innovation is often thought of as something that can't be measured. On the contrary, innovation must be treated as a business process managed across culture, process and technologies -- with a focus on metrics that track outcomes.

However, the ultimate measure is an external measure called the Vitality Index (VI), which looks at the ratio of product revenue generated out of sustaining and breakthrough innovations compared with all other existing revenue.

A quantifiable measure that shows the impact of innovation helps companies understand the health of their innovation capabilities and indicates changes development teams may need in order to meet expectations.

As the increasingly global workforce and improved innovation techniques add value to product engineering, forward-looking software companies will be able to leapfrog their competitors.

Enterprises that embrace R&D globalization and forge strong partnerships throughout their ecosystem will bring cutting edge innovations to market faster. Meanwhile, less globally-minded competitors will lose market share. A highly collaborative relationship with the right outsourcing partner can help you stay at the forefront of your industry