Outsourcing to Synechron

• Outsourcing positioned as “strategic partnership”

• ACOM began with Pilot/Beta run with fraction of work passed to Synechron– HTML development– Quality Assurance (QA) testing

• Contracts Finalized and Signed– Hourly Rate / Minimum quota of hrs per month– Outlined Platforms and Browser Compatibility requirements– No formal SLA parameters– Ad hoc turnaround time – project based

Initial Oursourcing Work ProcessInclude Diagram of process

Challenges:• Tech director overworked and bottlenecks created• PMs attemp to bypass process to complete their projects on time• Re-work is necessary as PMs don’t always communicate tech work

in apropriate tech specifications

Process Breakdown• PMs “too cool” for a project plan• Timing Issues

– Creative design team took up too much time– Trickle down of stress to developers– Created a “NOW” culture a Agency.com

• Internal developers were seen as a bottleneck• PMs began communicating directly w/ Synechron coders

– Created misunderstandings & frustration– Communication Chaos – Inefficient– Quality of work declined – outsourcing not transparent to Agency.com clients

• Agency.com hired 2 more IDs (Associate Tech Managers) to coordinate between PMs and Synechron

Working with SynechronPROS CONS

Significant cost savingsMinimul 70K annual salary for NY-based experienced tech developer vs. $25/hr outsourced

24 hour development shop due to time differences

Excellent quality of work

Change of process challenges

Management overhead

Communication difficultiesEcho & static over telephonePrimary method was Instant Messaging (IM)

Cultural IssuesAccent difficult to understand“Yes” men & womenLanguage barriers: misinterp

Externalities & Outsourcing Expansion

• External Environment– Economic downturn

– New CEO at Delmonte – lost largest account ($3 mil revenue)

– Lost new business pitch for Zagat

– Budget cut by MARS for Fling candy bar

• Cost cutting strategy via outsourcing expanded– Began to outsource Flash & .Net development work

– Layoffs of 7 employees (Tech Directors & Associate directors)

– 1 Synechron QA employee moved to Chicago - $50/hr

Case Synopsis Via OSM

.

0

1

2

3

4

Time

Stage 4

Stage 3

Stage 2

Stage 1

Stages

Leverage Offshore

Cost Strategy

Experimental Stage

Offshore Bystander

Management at Acom followed the Offshoring Stage Model created by Carmel and Agarwal

Now Acom is between Stage 3 and Stage 4

Have Speed, Agility and Flexibility

Took advantage of time zones differences

Have Deeper Localization

Have not built Global Network of Knowledge

Process Improvement Opportunities

• Acom Management executed the first 4 steps of Robinson and KalaKota’s offshore strategy with proficiency.

– Analyzed offshore goals and set strategy– Created offshore delivery model– Negotiated offshore contract– Designed Service Level Agreement (SLA)

Improvements:o Managing the Transition: Specifically Acom needs to improve Communication

Management. o Manage the Relationship for Maximum Value o Measure Performance Improvement