For Sourcing & Vendor Management Professionals

September 29, 2011

the Importance Of Evaluating your Vendors training Capability: What you Need to Know
by Stephanie moore with Chris Andrews and Kelsey Stone

the Infosys Global Education Center Highlights Why training Is A Competitive Differentiator

ExECUt I V E S U M MA Ry
As technology services demand begins to outstrip supply even in huge IT labor markets like India sourcing and vendor management (SVM) executives need to evaluate and re-evaluate their global IT services vendors training capability. Recent college graduates and new labor market entrants cant contribute productively to your IT services provider without significant training. In addition, a dynamic technology landscape requires programmers and technologists to constantly update their technical and domain skills. Vendors that dont have internal state-of-the-art training capability cant attract the highest caliber employees, nor provide clients with a consistently high-quality and meaningful deliverable. Infosys is one IT services vendor with a state-of-the-art approach to employee training. SVM executives should use Infosys approach as an example of how to effectively evaluate service providers strengths and weaknesses. EVALUATE VENDORS TRAiNiNg cApAbiLiTy by cOmpARiNg iT TO THE gOLD STANDARD Infosys, whose business success is directly dependent on its ability to scale a high-quality workforce, figured out early that training was a key business enabler (see Figure 1). The only way for Infosys to grow its revenue was to hire more people and to train those people to deliver the services Infosys clients were demanding. In 2005, Infosys consolidated all of its training and education activities to a new university-like campus. This 337-acre complex in Mysore, India, is now called the Narayana Murthy Center of Excellence and houses the Global Education Center (GEC) (see Figure 2). Infosys takes its training very seriously, estimating that it dedicates $184 million (not including the initial investments in the GEC) toward training every year. In addition to providing the requisite core training, the luxurious facilities as well as its boot camp cum finishing school curriculum are strong incentives for scarce and ambitious college graduates trying to select an employer.

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the Importance Of Evaluating your Vendors training Capability: What you Need to Know
For Sourcing & Vendor Management Professionals

Figure 1 Infosys Growth

Revenue (US$ billions) $4.7 $4.8

$6

$4.2 $3.1 $2.2 $.754 $.414 $.545 $.121 $.203 1999 2000 2001 2002 2003 $1.1 $1.6

2004

2005

2006

2007

2008

2009

2010

2011

Number of employees 150,000 120,000 90,000 60,000 30,000 0

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source: Infosys
60423 Source: Forrester Research, Inc.

September 29, 2011

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the Importance Of Evaluating your Vendors training Capability: What you Need to Know
For Sourcing & Vendor Management Professionals

Figure 2 the Infosys training Facility

Source: Infosys
60423 Source: Forrester Research, Inc.

The Foundational Training curriculum Readies Fresh graduates For The Workforce Most technical university students in India have heard of the Infosys Mysore campus, and many seek employment at Infosys simply to get access to the foundational training that will improve their marketability. As noted in The Wall Street Journal, most Indian college graduates still require extensive training before they can be useful or productive on actual client projects.1 The Infosys GEC has 610 full-time faculty members (about one-third of them have doctorates of philosophy [PhD] or masters degrees), and its 23-week on-campus training program is divided into three phases that focus on more than just technical skills development. The three phases of the foundational curriculum are:

Making the transition from college to corporate. During this induction phase of the program,
the GEC teaches students soft skills that help them transition from students to professionals. They learn how to interact with clients, how to behave in a work environment, how to correspond via email, and how to navigate the highly process-oriented Infosys culture.

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the Importance Of Evaluating your Vendors training Capability: What you Need to Know
For Sourcing & Vendor Management Professionals

Building a strong foundation in software (software boot camp). When students graduate

from college, they do not typically come with a full understanding of basic software engineering and relational database principles or even how an enterprise IT organization works. This phase of the program ensures that every Infosys engineer has the same education in software basics and understands Infosys processes, terminology, and tools.

Developing specific technical skills. Think of this phase as the specialization phase in which

the student learns specific technology or language skills such as Java, COBOL, or Ruby on Rails. Other software services vendors sometimes start their fresher which means fresh college graduate training programs during this phase. They train new recruits in specific technologies and then deploy them to projects. Unfortunately, this method is not sufficient to train a fresher, and some of the quality issues we see coming out of India today are likely a result of similarly insufficient training programs.2

The gEc campus itself Attracts Fresh graduates To infosys Of course, there is another reason that Infosys training programs attract new recruits. The GEC campus itself is a draw because its:

Training and education facilities can accommodate thousands simultaneously. The 1.44-

million-square-foot campus contains 147 training rooms, 485 faculty rooms, 42 conference rooms, seven food courts, five examination halls, two libraries, a bank, a medical center, and a multiplex auditorium. Infosys can train and house 14,000 students simultaneously during its 23week mandatory foundational training sessions.

Recreation facilities beat most 5-star hotels. The GEC recreation facilities include eight tennis

courts; two basketball courts; swimming pools; rock climbing walls; a gym; a bowling alley; and a cricket field, soccer field, and an eight-lane athletic field. Because students stay in Mysore for such a lengthy period of time, Infosys wants to make sure that they are fully engaged.

Training Does Not Stop With The Foundational program Infosys has other training programs for lateral hires and current employees. The company offers these online and at other Infosys campuses around the globe. The programs range from technical to domain to leadership to foreign language to sales training. Particularly impressive is Infosys project management and business analysis training two key skills that Infosys needs to succeed and to deliver services on time and on target to customers. Although expensive, Infosys says that this training stems attrition while simultaneously making its employees more valuable to Infosys and to the customer. Indeed, unlike staff augmentation vendors, whose core value is finding technically proficient people and then leasing them to an end customer, a true IT consulting and services vendors value proposition is about delivering high-quality and functionally accurate outcomes or products
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the Importance Of Evaluating your Vendors training Capability: What you Need to Know
For Sourcing & Vendor Management Professionals

(typically in a cost-effective way). The processes and tools that the vendor uses are critical, but the quality and proficiency of the people are the best lever the vendors have to continually deliver more and at a higher efficiency level. Vendors must not only train all staff members in their processes and enabling tool sets, they must also be able to train them in the constantly changing skill sets necessary to accommodate customers, including new technologies, vertical business processes, project management techniques, new technology paradigms (e.g., cloud and mobile) and platforms, and new development methodologies.

R E C O M M E N D At I O N S

EVALUATiNg yOUR VENDORS cOmmiTmENT TO TRAiNiNg iS cRiTicAL

to accurately assess your vendors training capability, evaluate them using a framework that asks the following questions:

Do they have dedicated facilities for training? OK, so maybe facilities cant all have 5-star
hotel amenities and be the size of a small city; however, every vendor should have dedicated facilities to accommodate the needs of foundational or fresher training. the location and immersion is critical to inculcating core corporate values and ensuring that the training is more than just a tertiary activity.

Do they have dedicated full-time faculty? If so, how many faculty members do they
have, and what are their qualifications? Ideally, you would like to meet a number of these professors. Some vendors use billable bench staff members to train employees, which obviously reduces the cost of training and lessens the margin impact of the bench. the challenge with this is consistency (e.g., as soon as a revenue opportunity opens up, trainers will be pulled); more importantly, the ability to educate others is not inherited, just as coding Java is not an inherited skill. Vendors should bring on professionals certified in the art and science of training others. Skipping this step will decrease the quality of the education, which means the value of the employees work product is likely to be substandard.

What is included in the curriculum? Soft skills training can be as important as technology
training. If a young programmer does not know how to push back on the client or ask good questions, it is very difficult to deliver something that is meaningful to the client. Also, a basic understanding of software engineering principles and vendor processes is critical to developing a high-quality employee. Only after understanding the basics of technology design, build, and integration can a student fully understand the intricacies of specific languages and platforms.

How long is the training program for a fresher? Four to six weeks may be sufficient time to
teach someone how to code Excel spreadsheets, but it is not long enough to train someone how to master Java, in addition to the prerequisites for learning Java. Nor could such a short training session possibly incorporate the required soft skills and process training.

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the Importance Of Evaluating your Vendors training Capability: What you Need to Know
For Sourcing & Vendor Management Professionals

How much training is required for experienced employees? How does the vendor ensure
that this training is performed? Continual training is required to stem attrition and to make vendor staff members progressively valuable as they move up the value chain or pyramid. Again, given that staff members become unbilled when they undergo training, this is an expensive activity, but it is clearly critical for delivering value to the client and employee.

How much money is spent annually on training by the vendor? For large public
companies, this number may be available in annual reports. In any case, the vendors should be able to provide you with this information. Without exception, lack of investment equals lack of a quality product or service for the client.

ENDNOTES
1

Underscoring the major problems with unqualified, yet degreed, labor in India today, The Wall Street Journal recently wrote an article entitled India Graduates Millions, but Too Few Are Fit to Hire. It hypothesized that recent Indian graduates require extensive training before they can be productive for Western clients. And while this is particularly true in the hot labor market in India today, all vendors (not just IT people) that sell professional services in any geography must have state-of-the-art training capability to make sure that their services are delivered in the most meaningful way. Examining Infosys training capability will help SVM executives understand the requirement for training. Source: Geeta Anand, India Graduates Millions, but Too Few Are Fit to Hire, The Wall Street Journal, April 5, 2011 (http://online.wsj. com/article/SB10001424052748703515504576142092863219826.html). The global outsourcing market is extremely volatile today due to the high demand for low cost labor and the finite number of resources available to the market. Sourcing and vendor management experts need to evaluate their suppliers capability and stability in order to reduce risk. See the July 11, 2011, Maintaining Vendor Management Vigilance In The Overheated Global Sourcing Market report.

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