Is the technical support from Wipro BPS good

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For users, there are basically two ways of integrating IT experts from India or other regions into their processes or projects: You can either hire an established service provider such as Hewlett-Packard, IBM, T-Systems, Accenture or Capgemini to work for the Service operation puts together a mix of onsite and offshore capacities. Or they contact an Indian IT service provider directly who will try to look after their customers with as few employees as possible on site. The third possibility for companies to set up offshore locations themselves hardly occurs in IT.

BMW, for example, chose the first model. The Munich-based car manufacturer has outsourced application operations to IBM. Contact persons are the IBM experts on site. They act as an interface between the car manufacturer and the offshore forces in Asia, for example.

Contintental, among others, took the alternative route. The Hanover-based company has a service contract with the Indian provider Wipro. Continental's IT staff usually work directly with the Wipro specialists, especially since the Indians only employ a small number of staff in Germany.

The competition for potential customers is in full swing between these supplier camps: On the one hand, the local service providers with their good customer contacts and low-wage workers are in the background. On the other hand, the Indian providers advertise with their enormous personnel capacities and their tried and tested and established processes for service operations. They are currently expanding their local locations.

Why the Indians come to Germany

For a long time, Indian providers ignored the German market. Lucrative jobs in the USA and Great Britain were sufficient for them. "Within ten years Infosys has grown from 5000 to 110,000 employees, driven mainly by the huge demand on the Anglo-American market", says Franz-Josef Schürmann, Germany boss of Infosys, describing the rapid development of the past years. "In view of such growth, Germany and Europe were not so much in focus." One of the reasons for concentrating on the British and American markets is that it is easier for the Indians to do business there. There is no language barrier because all partners speak English. Due to their common history, the companies from the subcontinent have traditionally maintained close relationships with British companies. And the Americans are welcome customers in India because of their decisiveness.

But the financial and economic crisis has made it clear to Indian companies that they are dependent on the Anglo-American market and the associated dangers. Many providers counted British and American banks among their largest customers. It was precisely this clientele that was badly affected by the recession. The IT service providers have also suffered from their lost sales and profits.

However, even before the global economic crisis, there were signs that the growth rates of the Anglo-Saxon offshoring market will flatten out and will hardly reach the highs of past years. The listed Indian providers in particular have an obligation to continue their success story. These companies are set up for rapid growth as a whole.

In addition, globalization also challenges the Indians. Large customers in the USA and Great Britain require their service providers to be present worldwide. You must also offer services in countries such as Germany and France and provide local contacts there. Last but not least, the local market offers a lot of potential. "So far, offshoring has not been widespread in German companies," says Horst Plieske, managing director of the Indian IT service provider HCL in Germany. "That will change, maybe not as quickly as it would be desirable, but the market will grow sustainably."

Why users outsource offshore

Above all, it is the low costs that drive demand for services from low-wage countries. This has been particularly evident in recent years, when the entire German economy collapsed and the IT departments had to tighten their belts significantly. "Customers can save costs during ongoing operations by reducing the service level agreements or changing the deal structure. If they do the latter, it usually means more offshoring and fewer on-site components," explains Frank Ridder, Vice President at Gardener. "At this point at the latest, the Indian providers come into play. As a result, interest in offshoring has increased enormously over the past year."

Even companies that have already improved their internal processes are receptive to the services of external providers, reports Holger Reimers, who as Vice President of the Indian BPO provider Genpact is responsible for business in Germany: "95 percent of the DAX companies operate their internal ones Services already as a shared service center. These facilities can only be raised to the next level of efficiency by means of offshoring. If you want to relocate the center to India, for example, you have to start the entire process of change that you went through with the establishment again. What is wrong closer than bringing a specialist on board? " Genpact positions itself as a complement to the internal shared service centers.

German users can benefit from Indian know-how

But actually the Indian providers want to cast off the image of the cheap provider, they prefer to see themselves as intermediaries for highly qualified experts. For example, Infosys claims it only recruits the top two percent of college graduates. You will be prepared for the job for 16 weeks at your own university in Mysore, India. The approximately 10,000 Infosys students are supported by around 500 professors. "These students are not satisfied with the role at the extended workbench. They want to change and improve solutions and processes. This is where ideas arise that German companies should adopt if they want to remain competitive in the globalized market," recommends Infosys- Germany boss Schürmann. For IT, this means, for example, that it adopts prefabricated methods and models from offshore providers and thus industrialises its own processes.

The discussion about the shortage of skilled workers in Germany also plays into the hands of the providers, because they can provide experts on a large scale that local users are desperately looking for. "The market for technical professions in Germany has reached full employment. That is the biggest driver for offshoring," says Rohan Joshi, Managing Director of L&T Infotech in Germany. The provider primarily supplies medium-sized manufacturers with engineering services.

The offshoring problems of German users

Nevertheless, the offshoring business in Germany will not be a sure-fire success. The Indians have already tried to stimulate local business from abroad - with modest success. The history of Indian providers in Germany is characterized by changing managing directors and contact persons, misunderstandings, cultural differences, sprawling projects and dissatisfied customers. "We had budget overruns in the seven-digit range," complains one user who does not want to be named. "The Indians worked for weeks and produced costs, but did not deliver the result that we expected." Ending the business relationship was out of the question because top management insisted on offshoring.

In view of this bad experience, the IT department decided in the follow-up projects to lead the Indian colleagues closely with its own employees. This increased internal costs, but the external bill was gratifyingly low, so that the management rated the project as a success.

The language also turned out to be a problem, not in the communication between the business partners, but in the documentation. The task of the Indian provider was to revise an old software. The earlier programmers wrote the explanations in the software code in German. The Indian experts could not work with this, so the IT department had to assign its own IT staff for the translation. The internal employees did not like this, they found the external specialists to be an additional burden.

However, the main problem turned out to be cultural differences. What the Germans found difficult to cope with was the strict hierarchy in India. Only the project managers took part in the discussions in project meetings. The specialists who were also present could have cleared up ambiguities with their technical and professional know-how. But they were silent. The effects were serious: "The Indian partner did not understand what we wanted from them and was therefore unable to estimate the cost," reports the user. A closer look at an offer from an Indian and a German provider showed that the Indians had calculated more than four times the effort compared to the Germans. It was only because of the low personnel costs that the Indian offer was around ten percent cheaper.

Is offshoring only suitable for simple services?

Any kind of criticism was also sensitive. Addressing problems directly and bluntly contradicts the Indian sense of politeness. According to the experience of the user, those criticized either stopped the work or boycotted it. The Indian specialists were generally reluctant to report difficulties in the project. The errors had to be corrected later under time pressure. "The Indian colleagues are very well trained. However, working together on complex projects is difficult because the Indians have to be managed very closely. The resulting internal costs make the business case almost incalculable," the user sums up. Offshoring is particularly well suited for recurring, standardized and simple work.

Many problems affect not only the Indian providers, but also every service provider who integrates offshore components into customer projects. "It is unrealistic to limit customer contact to the German interface. The direct line to specialists is important in many cases," reports Wolfgang Messner, Principal and Head of Offshore Delivery at Capgemini. All providers are aware of the difficulties and are working hard to resolve them. For example, Capgemini asks colleagues from both countries to characterize the other side in preparatory intercultural training courses - with amazing results.

Prejudices on both sides inhibit cooperation

The Germans perceive the Indians as non-binding, unreliable, unqualified, passive and dependent. The Indians judge the Germans that they are quality-fixated, aggressive, callous, anti-social, perfectionist and work-mad. The local project members, on the other hand, react with a huff when the Indians associate Germany with Hitler and the Nazi past without bias. The Indians are affected when Germans from the subcontinent only know fakirs, elephants, poverty and the caste system.

In order to break down prejudices and create a basis for cooperation, Capgemini organizes a one-day workshop with Indian and German employees and customers before each project. "If the project members understand the social and historical backgrounds and their different value systems, they can better classify the peculiarities in communication and cooperation," describes Messner, who has worked in India for many years.

The Indians expand German branches

In his opinion, the composition of the team is also decisive: the service provider installs a project manager in both India and Germany. One knows the processes and contacts of the customer, the other coordinates the work in India. Together with the customer, both coordinate the schedules, communication channels, tasks and governance issues. For many processes, Capgemini has set up processes and templates that offer project members orientation.

In view of the enormous fluctuation in India, ongoing documentation is also important so that tasks can be handed over as smoothly as possible. "Experienced Indian employees have to be offered management positions and young colleagues interesting tasks in order to keep them on the job," recommends Cap Gemini man Messner. Since the financial crisis at the latest, the times are over when Indians could earn 40 percent more every time they change jobs.

All providers operate comparable process models. The Indian providers see themselves as having an advantage over their western competitors because they now have enough experience and, according to their own assessment, can provide high-quality services even without the intermediary services of established service providers such as IBM & Co.

Acquisition or partnership?

The most urgent task for the providers is to strengthen their locations in Germany. You are therefore looking intensively for German specialists. For example, Infosys is planning to hire over 100 people in the coming months and would like to double the team within the next three years. HCL, Tata Consultancy Services (TCS), Genpact and L&T Infotec are also planning to increase their German workforce, but are reluctant to publish concrete figures. The shortage of skilled workers is a problem for them too. That is why companies are also looking for alternatives and looking for consulting firms that they can take over.

Another alternative has been practiced by T-Systems with the offshore specialist Cognizant for around two years. The cooperation is going very well, emphasized a T-Systems spokesman when asked, that more than 100 projects have already been carried out together. Tata Consultancy Services (TCS) and Bearingpoint also recently agreed on a European partnership. However, most providers consider a cooperation to be the worst alternative, because the parties involved are primarily committed to their own business. "A partnership project that is run jointly by an offshore specialist and a western provider is usually not as efficient as a project that is run exclusively by its own employees. Experience has shown that there are always frictional losses between the partners," comments Klaus Holzhauser, Director at Pierre Audoin Consultants (PAC).

The increasing investments by the Indians in employees and branches as well as the first takeovers show that the service providers are classifying the German market as a strategic business area. At the beginning of August, for example, Wipro took over Citibank's data center in Meerbusch. TCS already operates a delivery center in Düsseldorf, which the provider bought from Nokia. "A key element of our global expansion strategy is the expansion of business activities in Germany. Düsseldorf is an important component of our localization strategy," says Sapthagiri Chapalapalli, Germany Managing Director of TCS.

Outsourcing established in Germany

Managing Director in Germany

Klaus Gronwald

Employees in Germany

500.

Offshore employees worldwide

29.000.

Portfolio in Germany

Engineering services, IT services.

Industry focus

Engineering: automotive and aerospace; IT outsourcing: financial services, telecommunications, chemical industry, manufacturing.

Management in Germany

Horst Plieske

Employees in Germany

350.

employees worldwide

62.000.

Portfolio Germany

Product engineering, BPO, IT infrastructure services, system integration, outsourcing.

Industry focus

Financial services, manufacturing, ICT, health.

Reference customers in Germany

Allianz, Commerzbank, Continental, Deutsche Bank, Linde, MAN, SAP, Siemens, VW.

Management in Germany

Franz-Josef Schürmann

Employees in Germany

350 (700 planned).

employees worldwide

Just under 115,000.

Portfolio in Germany

Transformation projects, application development, infrastructure maintenance, engineering services, production support.

Customer focus

DAX corporations and upper medium-sized companies in the automotive, chemical, pharmaceutical, electronics and energy sectors.

Reference customers

Daimler, Adidas.

Management in Germany

Holger Reimers

Employees in Germany

No information (400 German-speaking employees).

employees worldwide

41.000.

Portfolio in Germany

BPO for finance and accounting, procurement, order processing and personnel support, helpdesk and IT outsourcing, among other things.

Customer focus

Top 500 companies in the pharmaceutical, health, financial services, automotive and heavy industry sectors.

Reference customers

Not specified.

Management in Germany

Sapthagiri Chapalapalli

Employees in Germany

500.

employees worldwide

140.000.

Portfolio in Germany

Product development, system integration, consulting.

Industry focus

Industry solutions for financial service providers, manufacturing and logistics, among others.

Reference customers

Airbus, Deutsche Bank, Daimler, Commerzbank, Nokia.

Management in Germany

Ralf Reich

Employees in Germany

400.

employees worldwide

110.000.

Portfolio in Germany

Application development and maintenance, infrastructure services, testing, consulting, BPO.

Reference customers

Citibank, Telefonica O2, Harman.

The Indian providers are confident because outsourcing has become established in Germany over the past few years and many companies have already introduced appropriate processes for provider control. The step to offshoring is then not far. Corporations and medium-sized companies that are otherwise internationally positioned are particularly affectionate. They have less reservations because they often have business contacts with companies in the emerging industrial nations. "Whether you want it or not: The Germans will have to work together with the Indians and the Chinese because these countries are important sales markets," predicts L & TInfotec manager Joshi. "So it is better for users to start gaining experience today than tomorrow."

• The offshoring location of choice is currently India because there are many well-trained IT experts there. All of the providers can draw on enormous resources. For example, according to unconfirmed sources, IBM employs more than 100,000 experts on the subcontinent, roughly the same number as in its home country, the USA. Accenture has 50,000 IT specialists there, and Capgemini can involve around 23,000 Indian colleagues in IT projects. This means that every fourth Capgemini employee comes from India.

• The Indian service providers can fall back on even more staff. The big three are Tata Consultancy Services (TCS) with 140,000 employees and Infosys and Wipro with 110,000 and 105,000 employees respectively. The majority of their employees come from India.

• All the companies mentioned benefit from the Indian universities, which are known for their good education. However, they can hardly meet the enormous need for academics: "The workforce in the Indian IT industry has grown in double digits in recent years, at peak times even by 25 percent per annum. The number of university graduates in IT-related courses is increasing pro Year by only four percent ", reports Wolfgang Messner, Principal and Head of Offshore Delivery at Capgemini. Therefore, all IT service providers maintain in-house universities, where they also train non-specialist academics. This is the only way to satisfy the IT industry's great hunger for skilled workers. For example, Capgemini teaches new colleagues for three months in its own training centers and then provides them with experienced employees for practical training for additional months.

According to the IDC survey, around 32.3 billion dollars will be turned over in the global offshoring business this year. Until 2014, the market is expected to grow by 6.6 percent annually to 42.8 billion dollars, more than 60 percent of which will come from US users.

According to a study by the Indian industry association Nasscom and Pricewaterhouse Coopers (PWC), the market in German-speaking countries (Germany, Austria and Switzerland) is around $ 5.6 billion. However, the sum includes both offshore and nearshore services. According to the Nasscom analysis, only 25 percent of the services are currently awarded to India. The majority of the externally procured services, almost 70 percent, come from Eastern Europe and Russia. The PAC market researchers also confirm the comparatively low presence of Indian providers in the local IT service business. "The largest Indian providers in the German market are Infosys and TCS. Both are approaching the sales mark of 100 million euros," explains Klaus Holzhauser, Director at Pierre Audoin Consultants (PAC). "To date, no one has made it onto the list of the 20 top-selling IT service providers in Germany."