Competing with analytics by taking analytics offshore

- (Tanvi Mudhale - C052)

1. What lessons can be learned by this firms experience with setting up an offshore ABPO?
To take advantage of labour arbitrage opportunities by outsourcing analytics
operations in countries where labour cost is comparatively cheap.
To have diversity of skills for ideal global workforce.
To outsource locations near to onshore markets to take advantage of time zones
and ability of analysts to travel.
To have clear guidelines on Intellectual Property (IP) as to what can be used and
what could not be by APBO management to serve competitors.
Creating set of roles and responsibilities for onshore and offshore analysts to avoid
conflicts between them which can hamper productivity.

2. What did this firm do right and what are some of the decisions that upon reflection do not
appear to have been well thought?

The firm did following things right:

Hiring VP who had experience in developing risk models and statistical analysis and
idea on setting up offshore ABPO.
Decision to setup offshore ABPO taking advantage of labour arbitrage opportunities.
Consolidation of analytics resources onshore and giving Knowledge Transfer sessions
to offshore analyst team making them understand backroom operations including
analytics.
Having diversity of skills from different geographies.

Decisions that were not thought well are:

Setting up centralized captive offshore ABPO management it resulted in conflicts

with the onshore analysts as ABPO management had rights to redeploy offshore
analysts to different teams. Onshore analysts got defensive on their jobs and talked
negatively of offshore analysts productivity when they realized they will be replaced
with lower cost offshore resources.
Spin off backroom operations including analytics to private equity firm without
discussing the deal with firms analytics leaders.
No clear guidelines on Intellectual Property (IP) as to what can be used and what
could not be by APBO management to serve competitors.
Having offshore ABPO (India and China) far from the onshore markets resulted in
time zone issues, travel issues and cultural differences.