Quality Summit 2010 – Using quality as a differentiator

Sri Lanka’s somewhat late foray into the now saturated IT/BPO industry has had our local industry scrambling to identify a differentiator that would set apart the country from the rest of the entrants, including the countries currently dominating the industry such as India and the Philippines.

Highlighting quality as this distinguishing aspect, the Quality Summit 2010 organised by the Sri Lanka Association of Software and Service Companies (SLASSCOM) with the support of ICTA was held with the aim of bringing together the industry giants in the persuance of quality as a differentiator for the Sri Lanka ICT-BPO sector.

The summit was a premier event that focused on the need for enhancing quality across organisations. For the first time it brought together about 80 IT/BPO companies and over 250 quality practitioners under one roof.

Bringing together a diverse panel of industry specialists to address the gathering which included noted Indian experts in the field and representatives from some of Sri Lanka’s own successful organisations such as Eurocentre DDC, HelloCorp and Virtusa, the summit consisted of two parts.

The morning was dominated by the main session consisting of several demonstrations and speeches from key members of the industry and the afternoon of four in-depth track sessions held simultaneously. The track session were conducted by KPMG, QAI, Experimentus and Digete Inc.

Creating robust, vibrant ecosystems

The first to address the gathering at the morning session was the keynote speaker of the event, founder and CEO of Quality Assurance International (QAI) India Navyug Mohnot, a global management consulting and workforce development organisation.

His speech aptly titled ‘Quality as a Differentiator’ covered many fundamental aspects of the global BPO industry and what Sri Lanka should strive towards when looking to build a quality business ecosystem.

Listing out the stakeholders in the country who need to get involved in order to achieve this which included the Government, CEOs and CIOs of companies and other professionals in the industry, Mohnot stressed on the importance of building an ecosystem that will be able to support further growth in the future.

“The national view should be to build a quality business ecosystem. It must be remembered that Sri Lankan company X is not competing with another country but that it is in fact the different ecosystems that compete in the world. Therefore building a robust, vibrant ecosystem is an absolute necessity in order to compete,” the CEO said.

In order to build an ecosystem of this nature, there are several aspects that should be available beforehand such as education and training, the necessary capital, standards and framework, industry promotion and Government and legal intervention.

Drawing on the example of India which basically went from zero to being a 50 billion dollar BPO industry, Mohnot explained that although quality was certainly important, it was a variety of things that helped create a thriving industry of this nature.

The country itself needs to concentrate on creating a tipping point which would in turn draw people. To get to this tipping point, however, there need to be in place business ecosystems that can be deconstructed to see if all the components of the ecosystem are in place.

Speaking first on the national level of building business ecosystems, he then worked his way down to the organisational level questioning if quality as a differentiator although a necessary condition, was a sufficient one on its own.

“A lot of the activity going on in Sri Lanka at the moment is about getting standards and setting variation control – this needs to be done but it needs to be done quickly so that you can move on to process engineering in a more profound way than it is being done now,” the founder of QAI explained.

From process engineering, Sri Lanka should look to move onto the next stage even more quickly which is where the world is at right now, in the phase of design engineering – re-engineering and innovation.

Quality should be upheld to the highest standards through all these processes but they should all be done quickly in order to catch up with the global industry.

IT organisations also need to work on seeing what the business strategies work according to the objectives of your company, said Mohnot, as in some cases there may be some sequencing required for the strategies to work for the specific strategies of the company.

“Let’s do CMMI,” was his advice, referring to the process improvement approach Capability Maturity Model Integration that helps organisations improve their performance.

He admitted that it wouldn’t count as much of a differentiator as there were already 4468 organisations that have it but it is still needs to be done as it is good for companies.

“It must be noted that CMMI alone is not enough,” he warned. “It is a great model and I strongly recommend it but companies need to do it quickly and move onto more holistic strategies.”

Customers will always ask for more and competition will always do more, the CEO of QAI India said quite rightly laying emphasis on the importance for the country’s companies to move fast too keep up with the world’s huge pace with the organisations doing some deep thinking in terms of sequencing and implementation for quality within their operations.

Mohnot summed up his speech with some checkpoints for Sri Lankan companies to keep in mind.

“Innovation is the key for Sri Lanka to leapfrog into the world scene – to make itself that niche that customers will pay for lies not in the volume game but in the differetiator game,” he reminded.

He stressed on creating operational and business excellence to achieve differentiation, to close out in the lower needs to move forward.

There is no question about Sri Lanka becoming a global leader, he said positively, adding that it’s just about when and how fast it will happen just like it has happened in other places across the world.

Does quality mean investing in getting certifications?

Next to step up to the podium was the COO of HelloCorp Mohamed Hisham who delivered a case study based on the impact of quality in BPO practices to the audience.

The COO drew heavily on the example of HelloCorp itself, which was established in order to cater to Sri Lanka’s fast growing BPO market as a non-captive BPO. Not seeing themselves as a big player in either Sri Lanka or in the world, the company simply looks to overcome their challenges by making quality a priority.

When HelloCorp was incorporated back in 2002, it expanded rapidly to employing around 300 people at one point but after redoing their business model, made drastic cuts reducing their workforce to a mere seven members.

“If quality is to be a differentiator, each client needs to feel that they are being respected and heard, customer requirements and best practices should be incorporated and most importantly the customer needs to be able to rely on the provider to deliver at all times while keeping to quality standards,” Hisham said.

To achieve this, it helps for an organisation to have defined quality processes and a continuous improvement process in order to be flexible and offer to customise without hassle.

BPOs in India are currently hiring thousands of people, something the largest BPO in Sri Lanka would not be able to achieve even years from now which is why investing in quality and making it a primary selling point is a must.

Hisham then asked the vital question – does this mean that investing in quality means getting quality certifications? Yes and no was the cryptic answer to the query.

While obtaining certification is important, it needs to be backed up by essential primary factors such as proper human resources, the right technology, relavent training and development and getting to know the client’s quality needs.

“The return of this is being an employer of choice, you will be able to attract quality clients and create more interesting offerings. Just keep in mind that you don’t necessarily have to be the cheapest provider to grow the business,” the HelloCorp COO reminded.

Once again reflecting on the systems followed by HelloCorp, Hisham admitted that in the battle between quality versus efficiency, the organisation tended to lean towards quality as a more vital priority while at the same time trying to balance efficiency – although this model may not work for all organisations, it has so far proven to be successful for the BPO.

When nearing the end of his case study, the COO once again spoke about making quality part of the organisational culture, understanding the challenges of a multi disciplinary BPO service deliverer and the importance of investing in quality.

He finally also encouraged all organisations to work with consultancy partners as HelloCorp had done the same and this had proved imperative to them in terms of growth over the past few years.

Improving quality via processes

Following a much-needed tea break, next in the line-up was the guest speaker the Manager of IT Advisory Practice KPMG Kishan Kishore, who spoke on how process can ensure quality.

First detailing all the challenges faced by organisations such as lack of communication, maintaining consistency and sustainability and how best practices can be repeated across organisations, Kishore explained that this could all be addressed through processes.

Going right down to basics, he kicked off by defining what a process really was, identifying it as a series of steps that transform inputs to outputs. The IT Advisory Practice Manager made it clear that the best way of representing a process is via a process map as processes can be well established and understood through a process map, serving as a training aid to understand the complete process.

He then went on to describe a process framework, outlining its uses for those unfamiliar with it. “For the organisation to perform well, all processes related to support, engineering and business activities need to be implemented. The CMMI model is an example of an integrated process framework. You choose the best practices from all the process frameworks based in what is suitable for your organisation based on your business needs,” Kishore said.

He then highlighted two parameters that could bring down customer satisfaction - residual defect rate (defects identified by customers) and scheduled deviation

Stressing on the importance of looking to bring this down, Kishore listed out how this could be done via code reviews, review processes and testing processes in a proactive way. Look to manage the project productivity, for the residual defect rate to go down during the testing process itself, he suggested, pointing out that if the skill of the programmer is good the defects injected will be lower.

It is important to define the parameters on which the project is dependent on which can be done at various hierachical levels of the organisation. It also needs to be understood that just setting the business objectives are not sufficient, proper direction needs to be provided as well.

Framework implementation brings about many benefits such as ROI, but Kishore had a word of advice for companies looking to implement this.

“Don’t try to adopt a framework just because another organisation is doing it. When you are deploying a framework it is not necessary to implement the whole thing –just choose what tools are necessary for your organisation,” he said.

Battling in a global market place

The CEO of Eurocentre DDC Mano Sekaram was next and like the HelloCorp COO, Sekaram too described Eurocentre’s journey since its establishment in 2000. With offices in Norway, it caters to a predominantly European market and mostly Scandinavian countries at that.

“I was once asked why we choose to conduct business in that part of the world and I responded that it was because it’s too cold for the Indians to get there,” Sekaram said jokingly, drawing much laughter from the audience and likewise the Indians present at the summit.

Calling the BPO industry a global market place when they first ventured into it with over a 100 countries presenting themselves as outsourcing destinations, including Palestine and Fiji, the CEO rattled off some statistics, stating that there were over 5,000 companies worldwide in the global IT/BPO outsourcing industry, half of which were located in this region, i.e. Asia.

Low cost destination means low quality was the perception that Eurocentre had to battle when they first started out. In order to mitigate this perception, they chose to make quality the foundation of their business differentiator and although they have now, 10 years down the line, brought in new differentiators, quality still remains the main one.

Sekaram said that through his experience, he could say that the best people in the industry are required to build a quality based organisation. When developing a culture in the initial stages there has to be investment in training and a passion to deliver quality.

The second stage is about institutionalisation, the third compliance and partnerships and the fourth is to be able to quantitatively manage everything. Eurocentre, according to its CEO, is currently in the stage of innovation – tool integrated processes and automation.

He also proudly revealed that Eurocentre was the first Sri Lankan company to be CMMI certified. The Eurocentre CEO too encouraged the implementation of frameworks as it offers an organisation predictability.

“It allows you to calculate schedule variances, effort variances, etc. In our case we now have zero critical defects at customer delivery and customer satisfaction index has grown by leaps and bounds. Our billing rate when we started was $12 per hour but we have now been able to raise it to $50 per hour,” Sekaram stated.

They were also able to double their rates without adding a single new person to their portfolio. “We need to build an ecosystem where everyone can achieve what we have in order for Sri Lanka to move forward,” said Sekaram.

Some lessons learnt through his decade with Eurocentre were shared with the audience towards the end of his talk. Measure, was his first word of advice as “if you can’t measure your performance, you can’t improve”.

“Challenge everything and change in accordance with the rapidly evolving environment. Encourage complete transparency within the organisation and engage an expert,” were his final words of advice – “get help and learn from others”.

Importance of testing to improve quality

The Consultancy Director for Experimentus Ltd., a leading software quality management consultancy based in the UK, Geoff Thompson was next, kicking off with the rather hard task of defining what quality is and listing out a couple of different types of quality such as conformance quality, specification quality, comparative quality and so on, differing depending on the product.

Another thing to focus on was that quality comes with a price and although quality approaches don’t always guarantee a quality product, for example, the Toyota recall, it does improve the chances of being able to deliver a quality product.

“Quality is a perceptual, conditional and somewhat subjective attribute and may be understood differently by different people,” Thompson said quite rightly, comparing a mobile phone, an Aston Martin and a computer to distinguish the difference in quality expectations for different products.

Another rather sad but true fact that he brought up was that with IT solutions, good quality tends not to be noticed but that it is instead products of poor quality that get talked about.

There is no clear-cut answer for what testing really entails; early test pioneers saw testing as a defect removal process but today it’s not so much about defect removal, instead it’s about stopping the defect altogether – a prevention process.

Many activities have now been put into place to ensure the quality of the final deliverable product including quality assurance checks, quality gates, quality controls, etc.

“Implementing testing right from the beginning of the product life cycle reduces the entire timeline of the delivery of the product; therefore it should be embedded in the software development lifecycle,” Thompson suggested.

Reviews have shown that 70% of the defects found in production can be directly related to merely poor requirement and the cost of the faults escalate over the process of developing the product.

It also showed that planning and estimating tend to be the weakest link in testing. It must be kept in mind that the estimates made need to be explainable and/or defendable, should encompass everything, should identify and enable all external dependencies, check planned estimate/activities against actual and be able to take corrective/control action if needed.

“Just keep these in mind – know your stakeholders, have agreed test goals and objectives, present data in the right format and remember not to slip into jargon,” Thompson, said wrapping up.

Choosing Virtusa

The last presentation for the morning was delivered by the Head of the Engineering Team at Virtusa Chandana Ranasinghe.

Virtusa is an example of an organisation that started with a single person and evolved to be a firm with 250 plus employees, focusing on value and innovation.

“We have been developing new models in order to gain some traction in the market. Virtusa has also chosen to work backwards – working with universities to gain traction. 93% of companies in the country are operating at low or medium level of quality assurance maturity at the moment whereas the successful 7% have achieved significant reduction in reduction in overall IT costs,” he explained.

He too encouraged companies to start testing early, stating that firms currently spend less money on prevention and early detection and more money on rework. Ranasinghe promoted Virtusa in this field, promising to put a firm within that 7% through the use of the Virtusa testing model.

By Cassandra Mascarenhas