Off-shoringBringing value to
Stanford University
Bob O’Leary and Nick Pavlakos
October 10th, 2006Copyright Robert O’Leary 2006. This work is the intellectual property of the author. Permission is granted for this material to be shared for non-commercial, educational purposes, provided that this copyright statement appears on the reproduced materials and notice is given that the copying is by permission of the author. To disseminate otherwise or to republish requires written permission from the author.
Presenters
Bob O’Leary – Executive DirectorAdministrative SystemsStanford University
Nick Pavlakos, PMP – DirectorStudent and Human Resource SystemsStanford University
Presentation Goal
To provide you with an overview of the experience at Stanford University in selecting and integrating an Off shore vendor into our operations within the Administrative Systems
organization
Stanford Facts Opened its doors in 1891
Jane and Leland Stanford established the university in memory of their only child, Leland Jr., who died of typhoid fever at age 15
Plan was to provide for all of the children in California Coed from the start Campus is located between San Francisco and San Jose (at Palo Alto)
in the heart of Silicon Valley where it occupies 8,100 acres Enrollment
Undergraduate 6,800 Graduate 6,800
Research Revenue is approximately $1,100M Faculty count 1,779 Number of non-teaching employees is approximately 10,000
Administrative Systems Background
Stanford had suffered through a long and costly upgrade of its core administrative systems PeopleSoft for HR/Payroll/Student Admin Oracle for Financials
Legacy systems were very mature and built on Stanford developed infrastructure
Institution developed a strategy to migrate to commercial ERP products Results were not stellar Large number of customizations Great difficulty managing change Faculty rejection Serious cost and schedule problems
Administrative Systems Background
Administrative Systems staff experienced significant turnover Voluntary and involuntary Multiple re-organizations attempted to address problems
Staffing for new generation of product was not well understood Large number of high priced domestic consultants took up residency Large number of improvement projects undertaken before production
stability was achieved with core ERP Process discipline was a low priority Costs were excessive for value received Silicon Valley location and High Tech relationships influenced
leadership to have a positive opinion about potential gains from Off shoring
Administrative Systems Organization
Administrative Systems
Financials
Student HR/Payroll
Data Management
and Reporting
Middleware & Integration Services
Infrastructure & Architecture
Quality Assurance
Communications
Administration
Initial Attempt at Off Shoring In an effort to lower costs and attract qualified resources Stanford
made a decision to aggressively pursue off-shoring Qualified resources were acquired (from Wipro) but they were not optimally
utilized Applied in a staff augmentation model Managed by Stanford resources Followed Stanford processes (?) Off-shore component never successfully implemented
Resources primarily worked on-shore Decision was made to move more aggressively with a goal of moving most
administrative work offshore An RFP was developed to maximize off-shore content of support and
development Employee’s were confused and threatened
Our Current Contract Selection process resulted in an Infosys decision based on their strong
process orientation Selection process and early planning was facilitated by NeoIT Key decision was made to fund an on-site, permanent manager from
Infosys At time of engagement, CIO left the Institution, CFO took over
CFO promised employees that no jobs would be lost for one year Intended to stabilize work force Fate of Infosys and off shore program unknown
Employee’s sensed a reprieve, but remained apprehensive New Executive Director hired Future of off shore program hung in balance
Initialization of off shore Decision to proceed with off shore program driven by:
Lack of internal technical skills and process 50 on site consultants from 23 firms
In working with Infosys in the planning phase we came to several critical realizations:
1. We needed to build support for the change through demonstrated success 2. We needed to start small, focus, and build confidence 3. Relationships needed to be built within IT and across customer base 4. We could not follow the transition model of large commercial companies or the
recommendations of our consultant 5. We needed a strategy (end state definition) and we needed to communicate it
consistently 6. We were breaking new ground 7. This was viewed as a long term relationship
Used Infosys to help us build new operational model Developed a strategy for immediate use of Infosys
Left future role open
Early Success
Selected a project to implement several enhancements to our PeopleSoft Application Had Infosys take on major role Internal PeopleSoft team was very threatened Customers took a wait and see attitude Decided to have all resources work on-site (5)
Project was very successful Quality of vendor staff was obvious to all Process centric approach was evident Documentation was excellent Price was right Customers were pleased IT staff was impressed
SDLC Roles & Involvement
Level of Involvement
OpportunityIdentif ication
OpportunityValidation
Project Charter Requirments Design Develop Test Deploy
InfoSys Administrative Systems Stanford Business Clients
Support ModelStanford University Support Process – Student and HR Systems
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Stanford Community
http://helpsu.stanford.edu
5-HELPSU
AS – ERP HelpDesk
Infosys Off ShoreStanford Manager
Infosys On Shore Coordinator
UAT ProductionDEV
Stanford Community
Business Office
Infosys On Shore Developer
Prioritozation
Stanford
Prioritozation
Current Role of Off-shore Vendor Maintenance and Support
PeopleSoft team Oracle team Data Warehouse team Infrastructure team (DBA)
Projects Data Warehouse design and build Oracle/PeopleSoft upgrades Several custom applications Oracle/PeopleSoft enhancements
Process enhancements Data masking Quality Assurance
Data warehouse strategy Approximately 50 Infosys resources currently engaged (20 onshore, 30
offshore)
Significant Gains from the Relationship
Predictable outcomes on projects Productivity on support tasks Process discipline Ability to scale rapidly Cost savings (offshore = 2.5 to 1 employee, onshore is even) Bench strength Customer confidence 24 hour operations Unexpected benefits
Staff training Hired some staff Strong PM capability
Issues Encountered
Staff resistance Cultural bias Customer resistance Staff augmentation mentality Re-defining ongoing Stanford IT roles Project phase continuity Keeping the pipeline full
Best and worst actions at StanfordRelative to Off-shoring Best
Hired an onsite manager from the vendor
Started slowly Began on-site Found a patient partner Eventually had strong
leadership commitment to the model
Forced all consulting contracts to off-shore vendor
Engaged without full knowledge of how it would work
Realized we were not General Motors
Worst Initially tried to engage vendor in
a staff augmentation model Showed early indecision about
off-shore action Engaged a domestic off-shore
consulting firm to plan for transition
Had no realistic strategy for off-shore
Thought cost savings would come quickly
Profile of an Institution that could benefit from off-shore
Not driven by political opinion Strong Institution leadership support IT leadership openness to the concept Clear reason for change Willingness to give up some control Commitment to working through start up issues
Willingness to take a risk
Willingness to deal with staff resistance
Stanford Future Plans
Continue to exploit this capability Move more work offshore (goal is 3 to 1 count of
employees) Engage other components of the school
Medical school, GSB, etc Infrastructure
Develop new org models and job descriptions which facilitate this model Grow – Architects, Business analysts, Project Managers
Develop skills in managing offshore partners Develop all in working with Infosys methodology
Take Away
As Thomas Friedman told us “The World is Flat”. It's flat because technology makes it possible for anyone with the smarts, a computer and an Internet connection to collaborate in a global network of knowledge
Bob Dylan told us “The times they are A-changin” We have to be big thinkers, taking advantage of
global resources Think value proposition What expectations does the Institution have of us
as Leaders of IT?
Questions?
Thank You.
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