Tag: centers of excellence

Automation Introduces New Business Risks | Sherpas in Blue Shirts

Automation has the essentials for introducing different kinds of business risks and risk at a different order of magnitude. The new risks manifest differently and have greater consequences than in a normal business process. The issue is the difference between type 1 and type 2 errors.

  • Type 1 error. This is a normal error such as making a mathematical error on an invoice. The consequences are that you would under-bill or over-bill a client. Once you reconcile the error, you may have lost a revenue opportunity or may have to rebate the client for the difference in overcharging.
  • Type 2 error. An example of this situation is that you under bill all your clients. The consequence is often 10X or more the impact of a type 1 error.

We at Everest Group have discussed with clients this impending shift of business processes to a far more automated landscape where type 2 errors are inadvertently introduced.

In a previous blog, I talked about automation bias and how people tend to blindly come to accept or believe whatever comes out of an automated tool. This makes the likelihood stronger that type 2 errors would occur.

On an industrialized services basis with broad-scale business processes, we must be aware of type 2 errors and guard against them. This is why many of the leading firms that are looking at adopting automation, cognitive computing, and robotics are considering implementing a Center of Excellence (CoE) to help the business understand the changes that accompany automation. A CoE can help educate employees to guard against automation bias and type 2 errors that could inadvertently be institutionalized in automated approaches to business processes.


Photo credit: Flickr

Captivated by India Shining | Sherpas in Blue Shirts

The land of lush green plains and abundant forests, formidable high mountains and long rivers, and an ethnic cultural diversity unparalleled globally — this is how many of us Indians would describe the uniqueness that is our country.

However, when a client asked us the other day, “What is unique about India as an offshore location for captives?” – we knew he was looking for domain-specific answers.

India has always had the reputation of being a cost-effective offshore location. Further, per NASSCOM, the annual tertiary graduate pool in India is expected to hit 4 million this year, almost one-fifths the population of Australia.

However, cost and talent form only one part of this large and growing story. Large scale, specialized (or “exotic”) talent, mature positioning in the global services landscape, and a large and growing domestic market add to India’s aura.

With almost 700,000 technically qualified people graduating annually, India is the ideal location for any company looking to establish its design and engineering captive centers. In fact, global aerospace majors Boeing and Airbus are in process of setting up units in India focused on simulation, analysis and virtual manufacturing. While Airbus intends to make India a hub of unique offerings not provided elsewhere within the global organization, Boeing plans to develop critical technologies through collaborations with top tier research institutes including the Indian Institute of Science.

Additionally, given that India is one of the largest and most mature locations in the global services space, it is only logical that the country is considered a strategic destination to locate offshore Centers of Excellence (CoE) for global sourcing. In fact, many financial services firms are scaling up their captive presence in India to leverage the advantages of locating their sourcing CoEs in close proximity to service providers.

Interestingly, computer maker Lenovo has emerged as a pioneer in offshoring its global marketing and communication activities – which are generally considered country- and culture-specific, non-offshorable activities – by leveraging India for:

  • Talent availability — a creative and experienced marketing team with a drive to running operations from the India hub
  • Third-party vendor willingness — an advertising partner prepared to synthesize its team in India

Finally, and most importantly, India is in the midst of an economic boom and a resultant consumer revolution. It is a period in which low-cost mobile technology in rural areas is as popular and far reaching as iPads and iPhones in the metro cities. It should thus come as little surprise that the same companies that looked at India as a services delivery destination a decade ago are now making every effort to develop customized products and solutions for this “demand hub.” Take, for instance, GE Healthcare, which launched a revolutionary $1,000 portable ECG device for rural India designed, developed and assembled in GE’s R&D center in Bangalore.

Given these domain-specific advantages that India offers, not to mention the beautiful surroundings and rich cultural heritage (a source of continuous attraction), we are left with little doubt about India as a unique and highly compelling offshore location.

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