Intelenet Gains Brownie Points With Enterprise Architecture Re-Tooling

Summary:

Caught in-between lowering revenues and static costs, the global recession squeezed Intelenet Global. CTO Rajendra Deshpande could help but it would require fixing the backbone of a business built across five continents and 41 global locations.

Highlights:

The organisation realised savings of Rs 290 Lakhs on capex and Rs 490 lakhs on opex.The hardware resources that were released as a result of the initiatve were redeployed for new business following six months.

Reader ROI:

How a single view of the enterprise can lead to cost optimizationHow constant communication with stakeholders can prevent a project from being sabotagedHow to manage a global project team

A frown crossed Rajendra Deshpande’s face as he strode into his cabin and slammed the door behind him. He tried to quiet his mind but he kept hearing the voices of his CFO, LOB managers, and other members of executive management. Their voices had that haunting quality that came from being echoed off the walls of the conference room where they had just concluded their monthly meeting. But to Deshpande it also seemed like they were provoking him in that way that spirits do and their message was clear: Do your bit to add value to the business. The CTO was perplexed to say the least. It was early 2009 and the global recession had begun to steamroll Intelenet Global’s profits. Past strategies, he knew, would not bear fruitful results. He needed a new tack, but in what direction?

As his mind circled the question, like a dog chasing its tail, his frustration forced him off his chair and toward a window. Outside, the broad expanse of manicured lawn calmed him. And in his mind’s eye Intelenet Global’s growth chart appeared before him and gave him comfort.Deshpande had grown with Intelenet Global since its inception in November 2001. He had been there when the company was only 25 strong, and provided back-office services from one facility in India. And he had been there as it metamorphosed into a leading global provider of BPO services with over 33,000 employees and a global footprint spanning India, the US, Central America, the UK, Australia, Mauritius, Philippines and Poland. Its 41 delivery centers served clients from BFSI to services and from IT to telecom. All of that in only 10 years.

Part of that growth came inorganically, in the form of acquisitions of other BPO players like Sparsh. Deshpande reminded himself how the company had also acquired some problems with the buyout including inefficiencies and information silos. But Deshpande had bigger problems now. “The recession was looming large. Many of our customers moved from being FTE (full-time equivalent) to a transaction model.  Overall revenue dipped but costs remained the same, which made costs glaringly large. It became imperative to counter cost pressures without impacting business operations or customer experience,” says Deshpande.

At that moment, he was reminded of an earlier conversation he had with CFO Susir Kumar (currently MD and CEO) and suddenly he knew how he could ‘do his bit’. If he could weed out internal inefficiencies in his department, Deshpande sensed he could rationalize costs, lower the cost of new projects–and actually impact the company’s EBITDA (earnings before interest, taxes, depreciation and amortization; an indicator of a company’s profitability and therefore of the efficiency of its operations). Eager to fix the problem, he summoned a team meeting.

We looked at our overall IT cost. We applied the 80: 20 rule and identified the top 20 capex and opex components because these had the most potential for cost rationalization

Regroup! “‘Don’t cut to the bone but make sure we get the flab out of IT’,” was the diktat Deshpande remembers giving his team during that meeting, which, he says, was the genesis of a enterprisewide architecture re-tooling. Although he didn’t know it then, that project would overtake his life but would give management a “single view” of where the organization was, where it wanted to be, and what had to be done to get there. The idea and the enormity of the job it called for would have made the most hardened IT vetaran blink. It asked for a study and near-complete revamp of the IT architecture of a company with operations in five continents. A project of this size and scope could derail a business if it failed to maneuver its multiple challenges. It was transformation in its truest sense and Deshpande knew his management would baulk at the notion. He was right. “Since we wanted to bring about so many changes including consolidation and centralization, and augmentation, management was concerned about its impact on business,” says Deshpande. But Deshpande had anticipated their apprehension. He created a strong business case, which focused on shrinking costs, a key concern area during the recession. “The moment I talked to them in a language of cost consciousness and assured them that the consolidation would free up many assets which would then be available for new business, they were convinced. Of course, I also assured them that none of this would interrupt the business,” says Deshpande. With management’s clearance out of the way, Deshpande buckled down to the job of drafting the project’s blueprint. First, he formed a core team of subject matter experts and IT leaders across 36 global sites. Their job was to take stock of the company’s technology inventory and review its IT architecture. “We looked at our overall IT cost. We applied the 80: 20 rule and identified the top 20 capex and opex components because these had the most potential for cost rationalization,” he says.

We looked at our overall IT cost. We applied the 80: 20 rule and identified the top 20 capex and opex components because these had the most potential for cost rationalization

Moving the Pieces Around The real killer in a project of this size and spread, Deshpande knew, was poor execution. There was plenty of room for error given the number of stakeholders, their cultural differences, and the distance that separated everyone. From day one of the project, Deshpande knew his days would be filled with the taxing job of getting everyone on the same page, aligning different forces, and getting everyone to buy into his vision. He says that there were about 15 people who challenged the status quo. Deshpande’s response was persuasion and he did a lot of it: On an average Deshpande says he had 10-hour marathon meetings. “People asked whether the project would work with all of this work being done at the same time. There was also a cultural disconnect and so I had to stress on communication. That is what turned the tide in our favor,” he says. All the talking also drove another agenda: Articulating the project’s goals effectively and repeatedly. On a project this big, word from the top has a tendency to fade out as it ripples to the end of the chain of command. And that necessitates constant repetition. Deshpande says another key to success was building a sense of urgency. And he did that by chalking out a 100-day program (July 2009-October 2009). The team started with an evaluation process. They were tasked with collecting data on their verticals (Internet, communications, systems and printing) across the organization irrespective of their territory. Then they created diagrammatical representations of all the technology components that had the potential for optimization. This, says Deshpande, helped them identify glaring gaps. Both the constant communication and the 100-day plan made it easier to implement an unsual project management approach Deshpande chose to take. “Indian companies have a habit of employing a project manager onsite but in Western countries they manage projects remotely. This is a cultural disparity,” he says. Since the project team was not present onsite it was important—he advises other CIOs attempting something similar—to keep all channels of communication open. He, himself, had to communicate with his team on a day-to-day basis. “We communicated with them on a continuous basis and made them a part of the entire exercise. That created a positive impact and busted the myth that you need to have a project manager where the actual project is being implemented,” says Deshpande. Today, Deshpande adds, no one on his team limits themselves by local views. Deshpande’s final piece of advice is getting business input. “I strongly believe that people who are close to your function tend to overlook details. Getting another person into the thick of things (business) will lead to double checking and challenging each others beliefs.” New Lifeforce All the planning and lost weekends (Deshpande says they worked for 10 weekends to ensure changes were made without affecting SLAs) bore fruit. Intelenet’s new, agile and cost effective IT architecture saved the organization Rs 2.9 crore in capex and Rs 4.9 crore in opex. The hardware resources that were released as a result of the initiative were redeployed for new business needs and lasted for six months, he says. “It allowed us to centralize our inventory of assets and gave us more visibility into IT asset for capacity assessment,” says Deshpande. The Internet capacity consolidation resulted in the removal of redundant circuits. And the new, single view of enterprise architecture optimized software license utilization, and allowed extra licenses to be used for new projects. “The single view of enterprise architecture helped us achieve our financial goals without compromising good customer service and growth,” says MD and CEO Kumar. It also helped consolidate teams working in silos and create a central helpdesk which optimized resource utilisation and reduced manpower. “We consolidated our printing requirements using an outsourced print management model. And yes, we achieved greater control over per FTE IT cost and contributed significantly to EBITDA,” says Deshpande.