1Globshops offshoring strategys challenges

Issues in offshoring

Jouy-en-Josas, 5th February 2015

Yassina Alioua, Henri-Pierre Garnier, Marc Nomaksteinsky, Caroline Hannemann

2Agenda

CHALLENGES FACED DURING THE EXECUTION OF THE STRATEGY

SOLUTIONS ADOPTED

ADVANTAGES AND DISADVANTAGES OF THE STRATEGY

RECOMMENDATIONS

CONCLUSION

1

2

3

4

5

3Globshop faced various challenges related to people, culture and partnership 1

Handling the workforce reduction in an effective way and solving the cultural discrepancies with the vendor was essential

Handling workforce reduction

Structure reengineering

CHALLENGES FACED

Internal

External

Improve vendor relationship

Onshore/offshore management

4Globshop tackled each challenge by implementing a tailored strategy2

Organizing workshops and especially the COPs was a great way to bridge the cultural gap

Open communication Packages for affected

employees Support for job seeking

SOLUTIONS

People

Cultural

Specific training sessions

Workshops COPs

Structure

Onsite/ offshore/ onshore staff ratios varies depending on project

5SOCIAL CAPITAL

Strong relational capital required for offshoring 2

Small relationship network Structural Capital

Relational Capital

Initially low but grew strongly with successful project implementation

The three components of social capital were leveraged to build a solid relationship with ISS

Required a learning process to increaseCognitive Capital

6GLOBSHOPS APPROACH

Formulating and adapting a clear strategy key for successful offshoring 2

Costs were reduced AND value adding services introduced

IT/ Solution centric strategy

ModularizationStep by step handover of tasks

and projects

innovation

costs

1 2 3

Both a solution centric strategy and modularization offered the greatest benefits for GlobShop

7ADVANTAGES

Globshop benefits from its well-defined offshoring strategy3

Laid-off employees actively contributed in knowledge transfer Remaining employees gained job security

Quick and smooth handover of operations while cutting costs by 35 percent and improving the service

People

Culture

Partnership

Intercultural training improved working conditions and collaboration

Clear rules lay the groundwork Regular meetings established a close contact and integrated the vendor

8DISADVANTAGES

However, Globshop failed to anticipate major shortcomings3

Knowledge transfer only happens from Globshop employees to ISS employees

The main disadvantage in the offshoring strategy evolves around the partnership between Globshop and ISS

Knowledge

StaffingHigh fluctuations in ISS staffing: No

consistent contact person

DependencyGlobshop risks being highly dependent on

ISS as it is the only vendor it deals with

9Recommendations4

Establish knowledge transfer within Globshop together with vendor

Staffing requirements

Knowledge management

For crucial projects, ensure long-term staffing to not interrupt relationships

10

Conclusion5

Overall, the GlobShop case is a good example of a successful offshoring strategy, especially when looking at the collaboration

with the vendor and HR issues

However, GlobShop has to evaluate its future options and should not neglect the possible threat of over-dependency