Novell, Provo, Utah, USA
Dave Wilkes, Novell
PHOTOS BY JUSTIN HACKWORTH
A software by cultivating company extends its global reach relationships with a small stable of vendors.
MULTISOURCING can be an awfully scary prospect as companies try to choose—and then manage—a long list of vendors scattered around the world.
But some companies are forging a different path. Software giant Novell, for one, taps into a handful of vetted vendors with established satellite teams fluent in the ways of the local culture. Armed with greater multisourcing options, Novell can then pick and choose where its IT projects land without so many of the risks and uncertainties that come with trying out brand-new relationships.
Novell doesn't want its projects to be limited by geography, says Dave Wilkes, engineering vice president of the Workgroup Solutions Business Unit at Provo, Utah-based Novell.
“We believe in the global war for talent,” he says. “From Novell's perspective, talent can be located anywhere in the world.”
Responding to this demand from Novell and many other clients, IT services vendor Softtek has aggressively launched offices in multiple regions. Last August, the company expanded its operation into Asia when it acquired China-based IT service provider I.T. UNITED.
“We think a successful vendor can integrate offices around the world,” says Beni Lopez, CEO of Softtek Near Shore Services, Garza García, Nuevo León, Mexico. Looking to lend a sense of continuity to clients even as they launch projects using multiple offices, Softtek implements similar workplace and project management models across its 30 offices in Latin America, the United States, Europe and Asia.
“Vendors who have multiple locations help us ga in access to new markets. That's very appealing.”
As a global shortage of IT talent rages on, this model also ensures Softtek and its clients can find the people they need to successfully complete projects—even if it means locating those projects in several regions of the world.
“We're not putting all of our eggs in one basket,” Mr. Lopez explains. “We hedge our risks and the risks of our clients by maintaining access to multiple alternative sources of talent.”
Having locations around the world ranks high on Mr. Wilkes' list of criteria when he selects vendors. But the U.S. company thinks there's also something to be said for the near-shore appeal of Softtek's headquarters just south of the border. “Because they also have offices in Mexico, we can always get a hold of someone if we need to,” Mr. Wilkes says.
SPEAKING THE SAME LANGUAGE
Mr. Wilkes currently works with three IT vendors that have teams spread across the globe—India, Mexico, China and Eastern Europe. “Vendors who have multiple locations help us gain access to new markets,” he explains. “That's very appealing.”
Last January, Novell shipped a localized version of its Identity Manager product in China. The approximately three-month localization project relied on a vendor with teams in the country.
“We get Chinese rates and native speakers who can be sure our software does what it is supposed to do in both traditional Chinese and simplified Chinese,” he says.
And, Mr. Wilkes gets to work with a company he trusts and has done business with for years. “As we expand our presence in China, we wanted a vendor that could help us grow,” he says.
Using the same vendor in multiple countries gives Mr. Wilkes the added benefit of a pre-existing management model across multiple teams. “We use the same purchase orders and the same reporting processes. That's a big plus,” he says. Not having to establish and manage new contracts and communication strategies with an unfamiliar team means less ramp-up time and greater consistency across projects.
But having a pre-established team management process in place only goes so far. Mr. Wilkes says any successful vendor relationship, regardless of the location or duration of the work, requires regular structured interaction that has been clearly defined up-front.
Before he even considers a team for a project, his staff defines the project objectives and the scope of work in as much detail as possible, including delivery goals and accountability, as well as reporting and communication expectations.
Once the scope is established, Mr. Wilkes evaluates all new and existing vendors against a series of criteria including work quality, translation skills and price.
Mr. Wilkes also travels to the vendor site at least once to assess both the vendor and the community, looking at the political and economic stability of the country, and projected costs of doing business in the region over the next three to five years. And he meets with local consultants and universities to assess the curriculum offerings and long-term viability of the labor pool.
THE NOVELL REPORT CARD
Once a project scope has been defined, Dave Wilkes sits down and grades the vendors on a variety of issues, including:
Quality of work
Ease of access
“A lot of these areas are resource-competitive, and we aren't the only ones going there,” Mr. Wilkes explains. “Having an ongoing supply of workers is a key aspect of a successful project.”
And unlike some companies that see outsourcing as a way to avoid talent management, Novell often invests heavily in developing a skilled workforce by helping the vendor establish training and career planning for Novell team members.
“In some countries turnover is high, and it's easy to jump jobs,” he says. “We want to be sure our vendor teams see Novell as a long-term relationship with an established career path.”
A LITTLE HEALTHY COMPETITION
Before a project is launched, Mr. Wilkes works closely with the vendor to clearly spell out the parameters for delivery and review. “We spend a lot of time defining a cadence of communication and developing management processes that include how we track progress and establish accountability meetings,” he says. “It sounds simple but it's so important.”
Novell also brings vendor teams to its U.S. office at the beginning of projects for training in the company's technology and project methodology.
One or more Novell project managers are assigned to each project—some are based in the U.S. office and some reside at the vendor site. These managers collect daily status reports from the vendor, review test-run reports, and participate in daily or weekly meetings with developers.
Once a project kicks off, whether it's at a new vendor site or a well-established one, Mr. Wilkes conducts quarterly reviews to be sure teams are meeting their progress and quality goals.
“A lot of companies will set up vendor projects and let them go unchecked until the fiscal year review,” he says.
But that's a mistake.
“The quarterly reviews help us to be sure we are getting the work we paid for and to change the team's direction if need be,” Mr. Wilkes explains.
This is particularly effective when vendors complete key milestones, such as software testing for a product release. “Because we communicate more frequently with the vendors, we can quickly scale back those resources when a milestone has been achieved and reallocate them to another product,” he says. “Without the review process, they'd just keep doing what they were doing.”
We're not putting all of our eggs in one basket. We hedge our risks and the risks of our clients by maintaining access to multiple alternative sources of talent.
—Beni Lopez, Softtek Near Shore Services, Garza García, Nuevo León, Mexico
To add a sense of urgency to the review process, Mr. Wilkes ranks the performance of each vendor team against its rivals—publicly. The move is designed to keep vendors on their toes and to be sure they know who they're up against.
“The rankings give vendors an honest view of how they are doing, where they need to improve and who their biggest competition is,” he says.
Mr. Wilkes also uses the rankings to make decisions for future projects. Vendors with the highest ratings get more work; those ranked lower get less.
“The competition diversifies our risk and helps us motivate our vendors to deliver quality work,” he says. “Sometimes a little rivalry among vendors can help boost quality.” –Sarah Fister Gale
PM NETWORK APRIL 2008 WWW.PMI.ORG
APRIL 2008 PM NETWORK