The Value Algorithm for Maximising your Skills Mix

Introduction

The Value Algorithm provides a way for clients to look beyond the initial price point and ensures that they are getting the best value out of their professional services relationships, be they on a long-term outsourced basis or for short-term consulting project engagements.

Scope

*Provides the foundation for understanding how to pull the value algorithm levers to ensure the best performance from their engagements.

*This report focuses on four issues of the value algorithm: offshore balance, mix of seniority, productivity and how to pay.

Highlights

In-house teams invariably have very senior and experienced staff performing some fairly basic tasks alongside the deployment of the high-end skills that justify their relative employment costs. Through effective knowledge capture, resource pooling and resource planning, service providers should be expected to re-balance the skills mix over time.

Offshore outsourcing, as with all long-term relationships, is a journey on which both client and vendor go together. Many will never reach the endpoint intended, and several will see the endpoint change before they get there, requiring continuous re-evaluation and collaboration to keep the relationship and delivery model evolving.

Reasons to Purchase

*The Value Algorithm provides he foundation for getting more value, and better performance out of outsourced relationships.

*Provides examples of how best to shift the mixture of offshore/onshore roles, and mix of senior and junior roles to save more money.


Report Highlights

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Overview 1
Catalyst 1
Summary 1
Methodology 2
Executive Summary 3
Offshoring is a journey 3
Tackling the mix of seniority is crucial 3
CMMI style approaches are more holistic than KPIs 3
Choose pricing models for the specific situation 4
Table of Contents 5
Table of Figures 6
Table of Tables 7
Introduction 8
Moving beyond price: the value algorithm 8
Aims of this report 10
Offshore Balance 11
Getting the best out of the offshore 'mix' 11
Managing offshore mix 12
Establish shared goals and collaborate 13
Mix of Seniority 14
Achieving an optimum resource mix 14
Tackling mix will pay the biggest dividend 15
Productivity 17
CMMI as a surrogate for productivity assurance 17
Industry standards 17
Productivity gains through CMMI 18
How to Pay 20
Get the right change from the pricing model 20
No shortage of commercial model options 21
Working the Value Algorithm 23
Challenge your commercial management 23
APPENDIX 24
Further reading 24
Ask the analyst 24
Orbys consulting 24
Disclaimer 24
List of Tables
Table 1: Notional resource mix 14
Table 2: Modest Offshore component and high senior role mix 16
Table 3: Greater proportion of offshore and more junior roles 16
Table 4: Productivity gain potential between CMMI level 1 and level 3 19
Table 5: Elapsed time to progress from CMMI level 1 to CMMI level 3 19
Table 6: List of potential pricing model options 21
Table 7: Pricing category pros and cons 22
List of Figures
Figure 1: The value algorithm 9
Figure 2: Vendor views of 'ideal' offshore delivery mix 12
Figure 3: Typical constraints to optimum outsourcing 15

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