Outcomes driven solutions are pin-pointed solutions and positioned as delivering specific value to the business. Hence they are targeted at the economic buyers who are clear about cal the business value they want. It is critical to have a clearly defined business outcome for these solutions to be able to engage the economic buyer.

In an outcomes model, the client is getting rewarded by converting a fixed cost into a truly variable cost model that scales with the business. It is freeing up the client executives from worrying about issues like technology, process and people and allows them to focus on business outcomes – things that really matter to the business. The client carries no risk since it pays only when then client gets the desired outcome. These are critical differentiators in go to market messaging for an outcomes based solution. Read More

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Outcomes based projects aim to deliver measurable impact on client’s overall business results. The basic philosophy is to align the interests of the vendor and the client so that both are working towards the same goal. I believe there are four key elements of an outcomes driven project-

• Vendor is not making money from the customer but with the customer from the market
• Vendor is going to make money only when the work effects an outcomes that delivers value to the customer
• The scope of work is impacting a large chunk of the process that influences a business outcome.
• We know that we can adjust / tweak some elements of the process to impact the business outcome

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In a traditional Time and Material (T&M) contracts, the vendor does not carry much risk related to scope. In a fixed bid project, the scope, the vendor carries some scope related risk but any change in scope results in a change in price. Hence the risk is not very high. Vendors also have experience in fixed price projects which makes it easier for them to define the scope.

In the transaction pricing model, the scope becomes very important. Scope is also slightly different than in conventional projects and should be defined more tightly. The volume of transactions and variation in volume in a day, week, month, months etc make a huge impact on pricing and effort and how you price it. Another important scope element is the form of input. Whether the input is in electronic form, paper form, integrated into xml, importable or already imported etc can have a huge impact on the cost. Read More

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In the traditional time and material (T&M) outsourcing model, the customer carries virtually all the risk. The vendor’s incentive in such contracts is to maximize the time billed to the customer. The customer selects vendor based on “overall reputation, strength of resume, etc”. All risks related to quality, Project Management etc is borne by the customer. Therefore the margins for the T&M players are the lowest. There are no risks and no investments by vendors.

As the vendor moves to fixed pricing, it takes on risks like productivity, quality, scope, etc. But the customer still has significant risk attached to him and has a fixed cost structure, not a variable one. In customer’s language, it is called fixed cost because it is not variable with respect to output. The customer still has a contracted amount for a fixed scope. But often there is scope change and therefore pricing change so the customer definitely bears some risks related to project scope. Read More

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How much innovation has really happened in the programming world over the last 20 years?

In the past twenty years or so, the IT application development industry has had abysmal product-driven innovation. Prior to that, the industry had significant product innovations such as Case tools. They had the potential to dramatically improve productivity of programmers and redefine the whole application programming paradigm as the tools could automatically generate a significant part of the code.

Automatic code generator, test automation and codeless programming are all examples of product innovations in the development world. The bottom line here is that the product led innovation leads to significantly reduced programming effort and dramatically reduced cost for customers. It’s transformative in its impact. Read More

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It has been a commonly accepted belief by many that, for the IT industry, going up the value chain means going into product development. They think that will break the linearity of revenue with people, i.e., growing revenues without adding more employees in the same ratio. However, I actually believe that building products is a lot more complex if you are not in the culture of using that product. For example, if you want to build a product for the American market, you have to understand the culture of usage of that product in the United States. Read More

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The need for responsibility

At iGATE, our Green initiatives began with the Carbon Assessment exercise that I covered in my previous post. In the next few posts, I’ll share my thoughts and experiences on another important factor impacting an organization’s carbon footprint – Power Consumption.

First things first. Consistent availability of cheap power is vital to a smooth functioning of enterprises. It becomes all the more important when you consider that last year, Indian industry suffered to the tune of several hundred million dollars simply due to non-availability of electricity. To quote from data released by the Central Electricity Authority (CEA), ‘A delayed monsoon and reduced coal availability at thermal power plants has pushed India’s power deficit in June to a five-year high of 13.8 per cent. Industry experts attribute this historic rise in the demand and supply gap of power mainly to the reduced fuel supply at thermal stations’. Read More

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In the last twenty years, I have observed that the way organizations have been consuming natural resources has changed radically. I would like to believe that this is primarily due to the technological advancements that have taken place. This phenomenon becomes more visible when, we as organisations take into account the amount of carbon we release into the environment as part of our operational activities. Also known as Carbon Footprint.

As an organization committed to being Green, we realized that finding out exactly how much carbon we release into the environment should be the first thing to do. We felt that this was more than just an environmental issue. It was an important opportunity for us to meet our legal obligations, reduce operational costs, and improve overall efficiency. All of which eventually add up to a competitive edge and needless to say, a better brand image. Read More

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Hello,

In my more than two decades of experience in the offshore outsourcing space, creating business models and service offerings for the information industry, I have always felt the need for a more personal medium that will enable me to share and learn more about the changes that are taking place in the world that we live in, or more specifically, how technology and communications can be made use of in a more efficient manner to bring about change.

This blog comes to you as an extension of me, my thoughts and personal beliefs, on the world around us, the continuously evolving scientific and technological climate and the impact that this is having on the way we live, work and play. And not just us, but rather the generations that will succeed us on this planet. Read More

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