In the modern digital era, cyber security has evolved into a critical component for safeguarding the integrity and confidentiality of an organization’s data. 

The responsibility for ensuring the security of sensitive information no longer rests solely on the shoulders of IT departments. 

The Chief Executive Officer (CEO), as the principal decision-maker, plays an increasingly important role in formulating and implementing an organization’s cyber security strategy. 

In this capacity, the CEO must organize cyber security measures, foster a culture of security, and manage the financial aspect of cyber security.

Organizing Cyber Security

The cornerstone of an effective cyber security strategy is its organization. 

The CEO must take the helm in streamlining processes, assessing the awareness level within the organization, and establishing collaborations to enhance cyber security.

Cyber Security Awareness Assessment

One of the CEO’s initial tasks is to gauge the existing level of cyber security awareness within the organization. 

A comprehensive understanding of the employee’s knowledge and attitudes towards cyber security is indispensable in pinpointing areas that require improvement. 

The CEO should work closely with HR and IT departments to conduct evaluations and surveys. This assessment will reveal whether the employees can recognize phishing emails, the extent of their password management skills, and their understanding of secure browsing practices. 

These insights will inform subsequent training and policy-making efforts, thereby reducing the likelihood of breaches resulting from human error.

Streamlining Cyber Security Processes

The CEO must ensure that the cyber security processes within the organization are seamless and well-structured. Streamlining involves eliminating redundancies, ensuring that the right tools are in place, and creating a swift incident response plan. 

For instance, the CEO could spearhead the adoption of an integrated security platform that combines threat detection, data loss prevention, and secure web gateways. 

Such an integration enhances the overall security posture by providing a centralized view of the threats and enabling rapid response. 

Having a clear incident response plan, which outlines the steps to be taken in the event of a security breach, is essential for minimizing damage and ensuring business continuity.

Establishing Collaborations And Partnerships

The CEO should actively seek collaborations and partnerships with external entities such as cyber security firms, consultants, and industry groups. 

These partnerships can provide the organization with access to a wealth of knowledge, cutting-edge tools, and best practices in cyber security. 

By attending industry events and engaging in conversations with peers, the CEO can gain insights into emerging threats and learn about effective countermeasures. 

Partnerships with cyber security firms can facilitate regular audits, penetration testing, and access to specialized expertise which can significantly bolster the organization’s security stance.

Fostering A Culture Of Security

For cyber security efforts to be effective, they must be ingrained in the organizational culture. The CEO plays a pivotal role in fostering this culture by setting an example, ensuring continuous training, and encouraging employee participation in security initiatives.

Setting An Example

As the highest-ranking executive, the CEO’s actions and attitudes towards cyber security have a significant influence on the organization. 

By prioritizing security in their decisions, actively participating in training programs, and communicating the importance of security to the team, the CEO sets a powerful example for employees to emulate.

Continuous Training And Education

Continuous training and education are crucial for keeping abreast of the ever-evolving cyber threats. The CEO should ensure that the organization has a robust training program in place which is updated regularly to reflect the latest threats and countermeasures. 

This includes not just technical training for the IT staff, but also awareness and best practices training for all employees.

Encouraging Employee Participation

The CEO should encourage employee participation by creating channels for reporting security concerns and providing feedback on the existing security policies. 

An open-door policy, where employees can freely discuss security issues with management, can foster a sense of ownership and responsibility among the workforce.

Managing Financial Aspects Of Cyber Security

Effective cyber security measures require appropriate financial support. The CEO is responsible for ensuring that cyber security initiatives are adequately funded, that investments are aligned with risks, and for securing cyber insurance.

Allocating Appropriate Budget

The CEO must ensure that adequate funds are allocated to the cyber security initiatives. This includes investment in tools, personnel, and training. 

Understanding that cyber security is an investment in protecting not only the company’s data but its reputation and customer trust is vital.

Aligning Investments With Risks

Not all cyber threats are equal, and it’s crucial for the CEO to ensure that investments in security are aligned with the organization’s risk profile. 

This requires regular risk assessments and aligning the cyber security strategy with the organization’s business goals.

Securing Cyber Insurance

In an age where cyber attacks are a matter of ‘when’ rather than ‘if’, having cyber insurance is essential. 

The CEO should be instrumental in securing an insurance policy that provides coverage in the event of a breach, helping to mitigate financial losses.

Final Remarks

In an age where cyber threats loom large, the role of the CEO as a sentinel and strategist in cyber security cannot be overstated.

A CEO’s engagement in orchestrating comprehensive security measures, cultivating a security-centric culture, astutely allocating financial resources, and adeptly navigating compliance and legal frameworks is paramount. 

These actions not only fortify the organization’s defense mechanisms but also instill a sense of collective responsibility and vigilance among the workforce.

Furthermore, a CEO’s proactive approach in establishing external collaborations can prove to be a treasure trove of knowledge and resources. 

Equally important is the CEO’s role in steering the ship during the tempestuous times following a cyber incident, as the way an organization responds to and communicates about a breach can have lasting effects on its reputation. 

Ultimately, the CEO, in embracing this multifaceted role, becomes the fulcrum upon which the organization’s cyber resilience balances.

In an ever-evolving digital landscape fraught with peril, it is incumbent upon CEOs to wield their influence and resources judiciously in the pursuit of a robust, adaptive, and holistic cyber security strategy that safeguards not only the organization’s assets but also its very future.

Companies cannot afford to waste time to achieve its strategic goals, such as correcting an existing problem, proceeding with a M&A or a project that impacts the whole company. When they delay their decision to hire a competent manager, many companies get into trouble, loose their competitive advantage or fall behind on their market.

The following case studies show how some companies, for different reasons, hired a transition manager to get out of difficult situations.

A) Case N# 1

Field of activities: Consulting

Problematic

his company suffered from permanent underinvestment in their IT system, resulting in an instable IT environment which did not meet the company’s needs. Finally aware of this problem, the company first invested heavily, recruited an IT Manager and hired consultants, though without the anticipated result. After 18 months, the company totally changed tactics and decided to work with subcontractors. In the end, this decision created new problems, such as increasing IT related staff threefold, because the subcontractor had to increase staff dedicated to the company in order to compensate system inefficiency while trying to ensure a high reactivity. One year later, the company hired a restructuring manager to solve the problem. The first five appointed managers, who have been recruited without the appropriate diligence, failed to find an efficient solution … until the arrival of the sixth.

Solution

Within 18 months, the transition manager, aware that IT difficulties can prove very complex, adopted a methodical approach. He first corrected the network hardware (cabling, router, hubs, etc.) before dealing with the network management and security. He then operated a revision of the servers and the applications (optimization of the installation on the individual systems, analysis of the interfaces, optimization of the data bases, etc.). The goal was to create an efficient and customer service oriented organisation, based on a clear hierarchical structure of the interventions and a reduction of the number of problems through prevention (instead of intervention). By quickly solving critical demands and pushing back non critical demands, customers could be satisfied with less resource. Today, the required IT staff has been reduced from 55 to 23, while improving the system efficiency.

Key points to remember

The company underestimated the problem and tried to solve it by making investments and hiring consultants. Then it hired subcontractors, but without satisfactory results. A strategic correction cannot be carried out just theoretically or operationally, but by using a rare blend of expertise, operation and people leadership.

It is difficult to select the right transition manager, and only the sixth was able to perform the requested assignment.

The company lost 36 months before finding the right solution to its problem, and then it took another 18 months to create a healthy environment.

CEO Worldwide’s +

Reactivity: with its pool of selected and certified profiles, CEO Worldwide is able to qualify, interview and present a first selection of candidates within only a few days.

B) Case N# 2

Field of activities: Software editor for a niche market

Problematic

This young company was encountered massive financial and technical problems and was very close to liquidation. The shareholders decided to fire the former managers and to call upon two experienced transition managers, a CFO and an IT manager to rescue their failing subsidiary.

Solution

In less than 48 hours, the two leaders succeeded in negotiating with the banks the continuity of the company. After 5 days, the disastrous internal organization was completely revised. At the end of the first month, they decided to transform the company’s BtoC approach into an indirect distribution model (thus B2B). The two transition managers needed 16 months to perform this transformation with, at the end, the opening of 500 points of sale and the sale through 40 Internet sites. This company now has good chances to survive, but the heavy loss before acting weakened it financially, impacting its development for the next 5 to 7 years. Indeed, the losses were “converted” into capital cost over 10 years, representing 30% of the operational expenditure. However, with a 45% market share and healthy margins, the company now benefits from a good repositioning.

Key points to remember

The decision to call upon experienced leaders was belatedly made. The subsidiary was put in a very difficult financial situation.

The two transition managers confirmed their adaptability by learning in less than two weeks how this market niche operated.

The managers successfully repositioned the company on its market.

CEO Worldwide’s +

Experience: By certifying only profiles with a minimum of 15 years experience, CEO Worldwide offers transition managers that already have been successfully dealt with the problems met by its customers.

C) Case N# 3

Field of activities: Training platform

Problematic

After years of growth, this company realised that the European market was too limited for its market and decided to expand its operations to Asia and the USA. The existing management wanted to manage this critical project internally. But they did not have the necessary experience to lead that kind of project and they underestimated the budget and the completion time. Thus the estimated budget was quickly exceeded and the start of the project was delayed. To solve the problems, the company decided to hire a transition manager for a 18 months assignment. Moreover, this project would change the internal organization and no director wanted to be responsible for such significant changes.

Solution

In less than 14 months, the transition manager successfully transformed the European structure in a worldwide acting company, providing services in the USA, Singapore, Japan, Australia, Brasil and Saudi Arabia. To achieve this, he created a new offer, which corresponded to a global market and created a convincing Internet infrastructure offering the complete product range via a simple Internet connection. Today, the company grows very fast and is able to deliver its services offered on any site worldwide in less than 3 days.

Key points to remember

The company very quickly made the decision to recruit a transition manager and gave him the necessary means to succeed.

The transition manager worked with each director to transform the company in a global mode and made every one of them feeling personally committed.

After the end of the project, the transition manager accompanied the directors for 2 months to ensure the smooth transition of the new operational mode.

CEO Worldwide’s +

International: with more than 16,880 iCEO certified managers available in 180 countries, CEO Worldwide offers profiles with a strong international knowledge.

D) Case N# 4

Field of activities: Internet SSII

Problematic

One year after the merger of two subsidiaries of two different groups, the new company did not reach the expected results. Internal conflicts increased and the development of new products and services almost stopped. After nine months of internal conflicts, both groups still had not come to a compromise how to run this subsidiary and it was decided to engage an external expert taking up the position of transition CEO.

Recommendation

The transition CEO very quickly took control of the company and got the sales and the development of new products started again. He set the solution of the conflicts as a priority in order to create a healthy environment with motivated and active employees. Sales staff once again attacked the markets, the IT department worked with the marketing department to launch new products. In-house, the transition CEO took
complete control of the commercial/marketing department, the R&D, and then of the financial department. His strong involvement enabled the company to obtain a 50 % growth and a 20 % net profit. At the same time, the number of employees increased by 42 %. After the departure of the transition CEO, the company still enjoys great success in its market.

Key points to remember

Over nine months of conflict before the transition CEO arrived, made the company lose important customers and created a feeling of failure regarding the merger.

The recruitment of an experienced CEO made it possible to solve internal conflicts and to industrialize whole departments. At the same time, the launch of new products and services boosted sales again.

The transition CEO also recruited successfully (and within the deadlines) his successor.

CEO Worldwide’s +

Professionalism: By proposing interim managers, CEO Worldwide offers its customers external managers, neutral to the internal conflicts of companies, which enables them to just attack the pressing problems.

E) Companies in Jeopardy: Conclusion

Many companies get themselves into trouble by delaying an obvious decision. These four cases confirm that a good transition manager can make all the difference, by restructuring a company, opening new markets or defining a winning strategy. CEO Worldwide commits itself in this process to facilitate the selection and to find the best suited manager with the right set of competences within a very short time span.

About the author: Erik Van Rompay

Executive (CEO/COO) specialized in the developing of high volume Internet companies by making them financially secure through the development of new innovative services.

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When picturing the relationship between the enterprise and the Software-as-a-Service (SaaS) business model, I imagine an evolutionary process that can be divided into three main stages. The first let’s call ‘The Comfort Zone’; the second ‘The Enlightenment’; and the final stage ‘The Re-Assessment’. Once we examine these we can then decide upon the right course of action when choosing how to adapt to the IT demands of the enterprise.

The Comfort Zone

First let’s look at the enterprise company. Typically it may be a bit strapped for resources and possibly even struggling to find the staff to assign to some of their most mission-critical IT projects in one of their departments.

And then there’s the SaaS business model – now a major trend among enterprise corporations. Most major SaaS players, such as Salesforce.com provide some form of web-based application functionality. Also known as on-demand, these guys charge their customers on a per-use subscription basis. And it’s a particularly attractive and efficient alternative to on-premises applications because it reduces the significant risks and costs of CRM implementation (and we’re all aware of the success rates of most CRM projects).

The major advantage of SaaS is that it can exist within the enterprise – similar to an ICBM missile silo within a military network – where the silo remains completely self-contained. The great thing about SaaS, from the enterprise’s perspective, is that it allows the business people to operate independently from IT, typically requiring only minimal input from them. It also makes life much easier for the CFO – allowing finance to make on-going payments rather than have to allocate and then justify a full-blown investment.

So SaaS really offers a ‘comfort zone’ solution for both the business and IT departments. SaaS offers the department’s user group a fully-functioning solution in quick time, while freeing IT from the worry and cost of having to implement a large on-premises IT project, or build the application in-house. A typical example of such a success is Salesforce.com, where a rapidly implemented sales force automation solution makes for happy sales staff and company executives alike. A win-win solution for all involved – for the time being. This leads us on to our next stage, ‘The Enlightenment’.

The Enlightenment

One of the great barriers to maximizing the full value of SaaS comes from the very reason the enterprise adopted it in the first place. The ‘silo’ effect means that the on-demand application remains effectively disconnected from the other applications that run in the enterprise, with the result that its information remains compartmentalized.

In the case of on-demand CRM solutions, SaaS software running solo can be viewed as a set-back to the process-driven enterprise, working in opposition to the goals of architects and business process analysts. And as a result, the enterprise, while happy with the fact that their mission-critical tasks are being performed, now begins to grumble.

Add to this the following issues and a re-assessment become almost inevitable:

1. The lack of automation that comes from being disconnected from the enterprise’s in-house applications means more data duplication, more manual entry and more human errors. You can’t even imagine how much enterprises are spending on these problems today!
2. As the on-demand application acquires increasing quantities and quality of information, other departments will want to buy-in and enrich their own applications with this data.
3. With the on-demand application becoming further enriched, your CIO will eventually want to apply some ownership to the system for security’s sake. Whereas in ‘The Comfort Zone’ it was more convenient not to own the system, now the situation becomes reversed.
4. And: With continued growth of subscribers to your on-demand application, eventually the enterprise will want to re-evaluate the license cost structure and subscription fees.

The Re-assessment of SaaS applications

Our enterprise now knows both the benefits and drawbacks of SaaS applications. Essentially the enterprise now needs to transform their SaaS application from a department-level tactical system to an enterprise-level solution to eliminate the duplicated work and manual processes, and to find a way of milking more value from their application and creating a more favorable cost-structure for the long-term.

The enterprise is essentially faced with two choices:

• Find an alternative solution to their on-demand application. This would normally mean going back to square one, with an on-premises solution or home-grown application, and losing all the appealing benefits of SaaS. This is a definite no-go.

Or:

• Somehow, bring their on-demand application more into the enterprise and integrate it with their existing applications.

The Value of Integration

I do believe that integration is really where the greatest value lies. Integration ties your on-demand solutions into your existing business infrastructure and enables both your on-premises and on-demand applications to work together in a way that gives them significantly more power and scope.

With integration, companies can multiply the power and reach of their Salesforce.com, SAP, Oracle JD Edwards, Movex, and other applications, allowing the enterprise to efficiently and automatically share and update information company wide.

Comprehensive information sharing gives both employees and management a fuller and more accurate picture of their overall business. Such a view allows management to make better business decisions, be more responsive to the customer’s needs, and get more efficiency and return out of their business transactions.

Integration Infrastructure vs. Custom Code

A word about custom code. The advantages of integration infrastructure over custom code integration solutions are clear. Custom coding is inherently more risky since it’s a one-off that hasn’t been tested in multiple scenarios. It’s also man-dependent: If you loose your coder after a year on the job, your project may be lost. While custom coding can seem an attractive alternative for some integration projects, the process is also time-consuming and inflexible when changes to the original architecture are needed. Few enterprises have the luxury to wait for their custom-code project while the market continues to evolve and move on. And when changes are required to your business process, or new applications must be added, many of the existing coding threads become redundant and need to be re-written.

Conclusion

So while I recognize that “integration” is a word that may scare many SaaS users and IT staff, the benefits far outweigh the potential fears.

Like in any industry, there will always be vendors out there willing to promise you integration at the push of a button, and who make it appear far simpler than it may be in reality.

The important thing is to choose a vendor that has the project experience to bring to the table a productive tool-set and powerful technology stack that can handle any integration scenario – whether straight-forward or more complex. Remember – the last thing you want or need is to start introducing custom coders and extensive consultancy that will push off your ROI and make you wonder why you didn’t stick with the more expensive and time-consuming on-premises solution. Integration remains by far the more cost-effective and practical solution for the enterprise. And when undertaken correctly, will bring your enterprise – SaaS relationship to the next level. Just make sure to integrate with a partner or vendor who really knows how to deliver on their promises!

About the author: A Swiss based Board-level professional, Avigdor Luttinger helps technology providers achieve their business objectives by leveraging their core competencies and the market opportunities; he is one of the founders of Magic Software Enterprises, and continues to dedicate a significant amount of his time to the company, where he functions as Vice President of Corporate Strategy. With over 25 years of experience and recognized expertise in the software industry, Luttinger is a frequent speaker and contributor at industry conferences and publications, and is also Executive Consultant at APL Technologies & Management Ltd. Luttinger currently covers Cloud Computing, Mashup technology, High Performance Workplace, Application Platforms, BPM and Integration. He holds an MBA from INSEAD in France and M.S. in computer sciences from the University of Lyon.

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Imagine. In the middle of the Super Bowl; in the middle of Wimbledon finals; as the top of leaderboard approaches the 16 th tee; or during the overtime of the FIFA finals… imagine if suddenly, a score of kindergarten children made their way on to the pitch and began playing. Just one running free on the field would certainly disrupt the game would it not?

Your enterprise is a daily competitive playing field

Every day – all day – there is a possibility that someone is trying to find a way to disrupt your business. The threats come in all sorts and sizes. Oversimplified, there are three basic sorts of cyber attackers.

The first we will call “taggers.” Like vandals and those who graffiti walls and buses, this sort of hacker merely wants to show off that they got into your systems. They want to be sure you know they were there. Shutting down email servers; encrypting your files and calling for a ransom; and flooding your servers to keep anyone else from reaching you.

The second sort we will call “wedding crashers.” A great deal more subtle, these hackers enter your system and hope to go unnoticed. They stay and get to know everyone there… their passwords and access, for example. They hope to blend in and while some folks might wonder who they are and what they are doing in your systems, most will dismiss them as “somebody must know them,” and think little more about them. Just like wreckers of a reception, they will eat, drink and enjoy the dance music while mingling as though they belong. They take data like a crasher may take a few of the prized wedding gifts. Some even stand to make speeches by authoring emails sent out in an official capacity. Eventually, enough people will begin to notice and curiosity will cause them to be outed.

The third sort is the most dangerous. We will call these “cat burglars.” These are the most professional of the three and the most diligent. Much time and resources will be spent to “case the joint” – your enterprise. They want to know what are the most precious items you have and where you keep them. Most patient, many find their way in harmlessly enough and “wait in the pantry” until it is safe to come out and start their crime spree. They, most often, never want you to know they were there and will leave a door or window unlatched to enable them to return when they want to. Sometimes, they may not even take anything that you would notice – simply copy things and go. They covet things like personnel records for ID theft; customer information; vendor information; financials and more. A victim may never know the burglar was there, unless they made a mistake entering and/or leaving.

Despite all of this going on (and incidents on the rise) many executives and managers view security as an obstacle to efficient operations and a cost with zero return on investment. Further, security is most often viewed as “the IT department’s problem.”

The bold truth is that it is everyone’s responsibility. Most of the entry points for attackers are directly with the assistance of unsuspecting employees. When a corporate network is used to do discovery on all servers and storage farms, it often finds, to its dismay, gigabyte after gigabyte of music files; video files; pictures stored on corporate assets that are personal in nature to the employee and either uploaded from a flash drive they inserted in their company PC or a download from their mobile phone or directly from the internet. The seemingly innocuous email offer and/or online deal that can’t be past up, is often just what a hacker needed to get into your corporate systems.

No longer are these merely antisocial technology misfits in a dark room relentlessly tapping on a keyboard. There are well funded, professionally trained computer science teams – around the world – who have created and benefited from this new form of internet piracy. The market will dictate the worth of what has been purloined so just take everything one can from you and someone – somewhere will be willing to pay for what a hacker took. An entire economy is operating on a sub-web that is driven by supply/demand and creative ways to take virtual assets and turn them into cash.

A little off track but the fact remains that everyone has to be sensitive to the need for security. Participate in the creation of security policies and procedures with empathy toward the best balance between operational excellence and a secure environment. A representative from every function should actively contribute to the Security Incident Response Team (SIRT) that comes together to manage and mitigate risk. Explore and identify the “Who? What? Where? When? And How?” regarding the breach and the ways to ensure it cannot happen again. The challenge is to ensure sensitivity is present to how actions in one area have impact on others. The cure should never come at such an expense to a function or functions as to hamper their ability to succeed.

It is an art form to facilitate and optimize the potential for the enterprise while delivering the most effective and comprehensive security. This requires all of the players on the team to play their part. When there is a breach, Legal may need to be involved to assist in managing the potential damage; HR may be needed to address the impact to employees; procurement and finance may be affected; and even if not directly impacted by the breach, all members need to be present to ensure the cure doesn’t do more harm than good.

The return? This question comes up a great deal. Do you recall the last time the power went out in the plant or in your offices? People went home, right? Generators are cost justified by loss productivity.

Now can you recall the last time the e mail server went down or the network was unavailable? Most people went home right? The loss is quantifiable. Now, if all the files on your shared servers were abruptly encrypted by an outside force so no one could access them… how long would it take before people went home? How much time would it take to shut the servers; reformat the drives and restore backup files to the drives? Not to mention the amount of work that has to be redone from the period of the last back up. If an entire department was unable to function for a complete day – salaries and expenses could be calculated easily enough but the work that would have been performed has a value. The cost to redo the work can be figured but the intangible still has value – opportunities lost; disappointed customers; brand impact; lost sales; and more.

Expectant parents pack a “go bag” and rehearse the fastest routes to the hospital. No differently here should enterprises have a Security Platform Plan; an Incident Response Plan; a Remediation and Recovery Plan and a Review of Existing Plans to ensure that this particular sort of breach (and those related) are included and addressed going forward… a well-defined AND DOCUMENTED cycle must exist.

So, the next time you see graffiti covered walls; suspect party crashers or try to figure out where to hide the coffee can with your emergency cash in it… here is hoping these feelings you will carry with you to ensure your organization’s well-being.

About the author: Global Technology Executive with strong business and financial acumen. Strong ability to link marketing strategy and results directly to overall business strategy and company financial goals. Keen abilities to develop strategy from in-depth analysis of buyer and/or customer insights. Documented program development skills, from advertising to digital presence across all relevant marketing channels. Possesses excellent influencing skills and able to drive consensus. Able to recognize and articulate a future direction; provide strategic direction, and have the ability to direct global and localized products, brand, advertising and related specialties while managing budgets. A strong track record of new product development and demonstrated ability to forge strategic alliances with key partners. Accustomed to driving results and delivering return on investment.

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How global uncertainty drives business, commercial and pricing models?

With rising global uncertainties which have emerged over time, fueled by the recession of 2008 came new operating and business models including cloud computing. Business Processing Outsourcing (BPO) came in much earlier to that, perhaps due to the previous recession and evolution of technology.

The traditional model of customers having to bear huge upfront cost for implementing large scale transformation programs and subsequent operating costs over time became the not so preferred model. The need for elasticity and opex based models gained further momentum. Conversion of capex based pricing into opex based, where upfront costs are recovered over time on a certain basis such as a per Virtual Machine or per transaction with cost of capital built into could be one theme for large service providers who have the financial ability to do this, withstand, successfully deliver and reap the benefits of being a true transformation partner. Taking this further, a catalog based pricing with options to mix and match offerings is another within this. On top of this simulating across different volumes of transactions or other unit of measurement such as Virtual Machines meant a nightmare for the pricing modelers as well as procurement departments of the customers who need to look into the future and guesstimate the demand to support the service providers in building a model and quote. All this has given rise to something very interesting for the customer. Equally on the other side, customers need to provide some ramp up assurances over time to the service providers with a tight governance model on both sides, in order for the service provider to be able to meet commercial goals while unleashing the transformation.

Not all transformation programs run their full life and meet their stated objectives, many fall by the way side for so many different reasons that one could write a book. In such scenarios, the service provider should in fairness get compensated for upfront costs remaining un-recovered for having taken the risk and tried best possible endeavor to make it a success.

Decision making and implementation has to be quick even though the planning is for the long term. It is somewhat like running a marathon, but at the speed of multiple sprints so as not to lose focus on the long term goals as well as celebrating tangible short term success along the way, thereby retaining continued sponsorship for the overall program.

The other not so related thought that comes to mind is why cloud is not being spoken about extensively in the Finance and Accounting (F&A) BPO space. After all, the so called key F&A processes such as Accounts payable (AP), Accounts receivable (AR), General Ledger (GL) and Fixed Assets (FA) are so noncore to the finance function of the customers in the first place, which is why they go the BPO way towards the goal of reducing the cost of running the finance function as a % of revenue. These are clear candidates for being moved onto cloud based computing environment, typically a public cloud. Similarly processes around procurement and other horizontal offerings can certainly be looked at being moved the cloud way. Some extra ordinary mix and match of technologies, tools and providers are available in the Cloud space, which should be evaluated, selected and implemented along with the now over mature cost arbitrage based process and workflow automation tools, to get miles of first mover advantage for new customers or take existing customers to the next level of transformation.

Data privacy and security are key in cloud no doubt, but there are global best practices and standards around this which service provider are more than eager to implement.

Outcome based pricing is another area which is dreaded by most except commodity services as in the infrastructure maintenance space or low end BPO space where outcomes can be defined with ease and measured without ambiguity. Taking a true partnership approach, all the pitfalls of outcome based pricing needs to be overcome and progress needs to be made vigorously by service providers in this direction far beyond these two areas, with customers ready to share the benefits when outcomes are realized and the times are good without taking it away from the service provider. Continuity of account management & governance on both sides over a long period of time is very crucial here.

Fear of failure must be overcome, in order to succeed. And innovation, with relentless pursuit to implement it and showcase commercial success is a must.

Another aspect that comes to mind is how to deal with service. Today everyone wants to sell something to you and run away. When it comes to service, it is either expensive in the form of Annual maintenance contract (AMC) or spares, or the product goes obsolete much earlier than not so long ago, requiring a mandatory replacement. While in the IT world, this is natural, as technologies evolve, in the non IT space, it is important that products are made like the good old days where the product would function its stated purpose for many years or decades to come and there is reliable service around it. In general, today’s products are not built to that last very long as they used to be decades ago. Most of the spares within it require to be replaced at certain prescribed intervals or risk the warranty lapsing and the value of the product, such as a car, keeps going down very rapidly. While this means big business for the car manufacturers in the form of revenues from after sales spares and dealers on account of servicing and selling these spares, the end customer actually ends up buying a consumable in the form of a car, rather than an asset, as in the past. Similarly in IT, there is a need to build robust technology which will last a very long duration of time. IT when taken in its total cost of ownership is actually very expensive and hence this theme holds lot of importance.

IT should be used to solve world’s major problems such as food security, healthcare and natural disasters in a much more intensive, long term oriented and cost effective way than it is today and there should be lots of opportunities if this happens.

IT spend within emerging economies has to go up manifold and yet be affordable in such highly price sensitive markets and thereby enhance quality of living where most of the world’s population resides.

The last 2 themes will further help in reducing global economic uncertainty which is what this article started off with.

About the author: Rajesh R N

Result oriented and with rounded experience, Core strength is in creative, analytical and advisory roles spanning delivery, consulting and finance to help build high performing teams and also enjoy individual contributor roles.

After graduating from the St. Joseph’s College of Commerce, Bangalore University, Rajesh became a Chartered Accountant from the Institute of Chartered Accountants of India. Thereafter Rajesh went to U.K and underwent his Masters in Business Administration (M.B.A) from the Aberdeen Business School at The Robert Gordon University through a full time program.

Rajesh has close to 24 years experience since graduation, of which the recent 15 years were in the IT and ITeS industry involving roles in Program Management of large global complex transformation programs, Commercials and Contracts Transitions management, Solution design, Management Consulting. The remaining years are in Business Advisory services, Corporate Financial Management, Accounting, Auditing and Taxation in diverse industries such as oil and gas, property development, consulting firms, floriculture and bio tech. View Rajesh’s short bio

Outsourcing and offshoring projects: It is autumn; we are in the Indian city of Pune. Twenty Indian project managers, business analysts and software engineers have gathered in a training room. They want to learn how they can successfully bring the cooperation with a customer whose team is distributed across Germany and the United States back on track. At the moment, however, every single one of them is frustrated. The global programme, in which they work, is destined for disaster.

Uncertainty adds to frustration

Collaboration with that client began last spring with such vigour and enthusiasm. But now everything is just sluggish. The programme manager has already been replaced, and the projects associated with the programme are being rescheduled. Uncertainty adds to frustration. The overall mood is strained, emails are responded to in monosyllables and conference calls are cancelled at short notice. The Indian team members ask: how can the transfer of know-how take place under such conditions? How are we to work cooperatively with the customer at all?

For their company, a world-renowned Indian IT service provider, a lot is at stake. The programme has a volume worth of almost twenty million dollars. An early stop would not only mean a financial loss. It would also damage the reputation of the company, which, of course, would be expensive to repair.

After lengthy evaluations, considerations and due diligence, the client, a multinational pharmaceutical company, has decided to finally outsource its core applications to the Indian company. Up to now, the pharma company has been buying software development services from another vendor in India. These included a few non-critical applications and databases in a pure offshoring model. But this new, comprehensive programme involves the heart of the company’s IT.

For many of the pharma company’s IT staff the core applications are “their babies”. The company’s executive board, above all the CIO and the CFO, have decided that it is time to entrust this now grown-up child into foreign hands. Their objective is to save costs and, at the same time, take a technological leap forward. This can be achieved by not only transferring know-how to the new Indian partner, but also by systematically organising a reverse transfer of technology, processes, best practices and skills.

At the training in Pune, I ask the Indian team to form small working groups and ask them to write down, in an unadorned fashion, where the shoe pinches. Here are the results:

• “We get the feeling that the client teams in Germany and the USA are not treating us at peer level.”
• “Our client does not share the big picture with us. But we need to know it in order to deliver the work we committed to.”
• “We are never clear about their expectations.”
• “We’ve been told several times to be more creative and self-driven. But when we become proactive, our colleagues in Germany and the USA do not welcome it.”
• “They don’t have confidence in our capabilities.”
• “It is difficult for us to understand their accent in the English language.”
• “They seem to value time and deadlines above everything else!”

Ten days later I meet the customer team in Frankfurt (Germany) and a week later the one in Cambridge, Massachusetts, United States. These teams participate in the same training, but with a reverse angle. How do the customer teams experience the cooperation with their new Indian colleagues? What do they find difficult? Where do they need help?

Their answers are as sobering as those the Indian team gave:

• “Our Indian colleagues seek approval from their management for everything we ask of them.”
• “Since we started working with the Indian service provider, micro management at our end has grown considerably!” · “The Indian team only delivers what was specified as a requirement. There is no thinking beyond that boundary.”
• “It’s bizarre: when we meet with the Indian team to discuss progress, only one of them talks to us. The other members of the Indian team sit, listen and nod approvingly.”
• “We have different expectations of when a piece of work is considered finished.”
• “I guess their English grammar is impeccable. But it is really difficult to understand spoken Indian English.”
• “Our Indian colleagues usually meet deadlines but the quality is often poor.”

Three dominant, recurring patterns

When reading these quotes, one might conclude that outsourcing to India was generally not a good idea. In those twenty years since I have been involved with outsourcing and offshoring projects to India, I have come to realise that there are three dominant, recurring patterns.

In the first pattern, a package of activities is curated to prepare both employees and the organisation for the upcoming changes. Employees are carefully brought up to par for collaborating with colleagues in India. Such preparation has to address the operational model as well as the intercultural dimension of the partnership.

In the second pattern, the outsourcing company organises merely a handful of informational sessions concerning how outsourcing should ideally be approached, who is responsible for what, and who the outsourcing partner is. What I also see quite often is that presentations are made about where the outsourcing partner is located (e.g. India), that country’s political and economic environment (e.g. democracy, free market) as well as key features pertaining to culture and traditions (e.g. importance of family, national festivities like Holi and Diwali, spicy curries, etc.). Such presentations are often made by staff members from the outsourcing partner company. It is, of course, true that Indians know their own country the best. But, do they have the acquired skills to view the implications of their native culture on professional life through the eyes of a foreigner specifically based on focussed research, deep realisation and extensive experience?

In the third pattern, I’m called in when the roof is already on fire. Outsourcing projects are often approached as a purely technical, organisational and financial undertaking. The underlying assumption is that planning, processes, technology and lower costs will inevitably lead to success. While decision makers involved in this pattern do hear and read that there are also “soft factors”, they decide to address these if and when they become wildly disruptive. In reality, however, inefficiency and dissatisfaction fester for quite some time until they suddenly erupt.

In all three patterns the people involved need to be approached based on their professional, mental and emotional standing with regards to the outsourcing programme. Those who have fears and reservations need to be informed about potential problems and failures. In my experience, it pays off to be totally honest. This is particularly important in the case of India because there is much confusion in the West about certain cultural characteristics in India (e.g. human rights, inequality of the sexes, caste system, etc.). This is the basis to show that you can solve problems which typically arise when outsourcing, and that it is realistically possible to develop a successful cooperation. Fearful pessimism must be paired with realistic optimism.

Outsourcing to a faraway country and deny any cultural difficulties

Those, on the other hand, who only see a fantastic opportunity in outsourcing to a faraway country and deny any cultural difficulties need to be informed of possible problems. They also need to know how to address such problems. This is especially important in the case of India due to the fact that many people from the West easily become enchanted by this country. I have often seen that people actually project many inner desires on India and thus romanticise it – even in a professional context. Euphoric optimism must be paired with informed realism.

And, finally, it must be made clear to both groups that neither active nor passive sabotage of the project will be tolerated.

The case being presented above belongs to the third pattern: fire in the roof. I was called by the pharma company to develop a curriculum for intercultural competence. I trained hundreds of employees in Germany, the United States and India, and supported the change management team at various levels.

It is a truism that many outsourcing projects nowadays are spread across multiple geographies and are virtually organised. But regardless of whether a project team is globally distributed or sits in a building just around the corner, it has become rare that all team members belong to the same ethnic, national or cultural group. Multiculturalism has become the norm, and so has the demand for intercultural competence.

Although outsourcing and offshoring have matured over the past 20 years or so, program and project managers from North America and Western Europe still struggle to appreciate their Indian colleagues’ approach to work. Reciprocally, Indian team members often feel disengaged when working with their counterparts in the West.

When, on the one hand, companies and people from India and, on the other, Europe or the United States cooperate, there will usually be intercultural conflicts. In most cases that has to do with one of the following five dimensions:

1. Hierarchy

One of the first things that Western Europeans and North Americans experience when cooperating with teams in India is the importance that seniority, status, and hierarchical order enjoy in India. A manager’s door is not always open, Indian employees stand up when a boss or client enters the room, and a team member without leadership role refrains from expressing contradiction to a leader’s statements. Still today, the heritage of the caste system subliminally influences thought and behaviour.

2. Leadership

Many people from the West learn the hard way that the leadership style common in Europe and North America (such as involving the team in decision-making), is not shared by all cultures around the world. In Germany and the USA you apply a participative style to managing employees. The individual is expected and expects to assume far-reaching autonomy. In India, however, many managers and employees alike prefer a more authoritarian style.

3. Communication

In most cases, I know the person from the West feels that he or she communicates sufficiently with colleagues in India. Anything more detailed would be leading up to cumbersome micro-management! The person from India, however, gets a creeping feeling that important information is being withheld. He or she feels as if they were at the bottom of the “food chain of communication”.

4. Time management

In Indian mythology there is a concept which suggests that your soul has a time budget of 311 trillion years to realise what it has been destined for. Also, there is the widespread notion that every soul lives through numerous incarnations on Earth. Even though individuals in India might not remind themselves of this concept in everyday life, its mythological power has an impact on the way work is approached. Depending on a situation’s context the individual may award spiritual fulfilment more importance than schedules and technical perfection. In most industrialised countries in the West, on the other hand, behaviour is moulded by Abrahamic mythology.

An individual has limited time at hand (one incarnation), and time is perceived by many to be a limited resource. Depending on a situation’s context, adherence to deadlines and delivery of perfect work may be valued more than oneness with creation!

5. Quality assurance

There is no absolute measurement for quality. Rather, it always refers to a given context and certain conditions therein. The benchmark for quality is set rather high in Western industrialised nations. People and corporations live in a largely well-functioning and at times luxurious environment thanks to rich financial means. Countries, however, which are only at the beginning or in the middle of their industrialisation refer to a standard of quality that is subjectively good, but poor from an industrialised or economically almost saturated viewpoint. These different perspectives have a deep impact on what kind of results engineers strive for.

Of course, everyday life in big metropolitan cities located in India is becoming increasingly more modern and progressive. More and more highly educated and far-travelled Indian citizens share values characterized by openness to the world and critical distance to traditional social norms. However, the majority of the approximately 1.2 billion Indians continue to adhere to traditional values and customs. With good reason: their cultural identity is based on a history of civilisation reaching as far back as at least 5,000 years.

This article was first published in Outsource #36.

About the Author:  Waseem Hussain is the Founder & CEO of a services company with a specialization on business with India. Before, he was the business manager of a globally operating outsourcing company, after heading a joint venture between a Swiss and an Indian software development company. His key strengths are quickly grasping the clients’ situation, crafting executable strategies and implementing steps towards success.

Swiss-Indian Co-operation in the Area of Offshore Software Development

In the mid 1990s, large corporations in Europe and the USA realized there was a huge lack of skilled software engineers. The need to solve the Y2K problem within a short timeframe, combined with unsuccessful education policies of the respective governments were two of the major causes for the increased demand. In addition, the gaining impetus of globalization produced a common management dogma:

„Speed up at high tech but low cost, and grow along large scales.”

Also Subcom of the erstwhile National Transport Group (NT Group) followed this trend. To quote a senior manager’s public presentation: “The Customer is demanding more, faster and at better prices while Subcom is struggling to recruit specialists in reasonable time to satisfy this demand.”

The demand was met with supply from India, where it was mainly the private sector which promoted its capabilities. The Indian suppliers offered their  services with a high sense for customer satisfaction and very attractive pricing (supposedly  up  to  60% cheaper than in the client’s economies). The offered know-how was said to be mature  and  readily  available.

Subcom’s strategy to overcome its  resourcing  problems was to enter a strategic co-operation with  a newly formed company called Indian Software Services Company (ISSC). In 1999, a  frame  agreement ‘for the provision of computers services’ was signed, followed by a MOU  (memorandum  of  understanding) on the formation of a joint-venture and, subsequently, a business co-operation agreement. The joint-venture agreement was signed in the year 2000, through which ISSC was to hold a block of shares of 60%,  and  Subcom  40%.

About the Author: Waseem Hussain is the Founder & CEO of a services company with a specialization on business with India. Before, he was the business manager of a globally operating outsourcing company, after heading a joint venture between a Swiss and an Indian software development company. His key strengths are quickly grasping the clients’ situation, crafting executable strategies and implementing steps towards success. View his short bio