6.3 Stabilization of the relationship and residual tensions (1999 - 2000)

6.3 Stabilization of the relationship and residual tensions (1999 “2000)

The challenge to the economic viability of the relationship was accompanied with a growing maturity where both sides showed an increased understanding of the other s problems. Mani described how the condition of both sides speaking ˜past each other (as was evident in the earlier phases of the relationship) was changing:

So we are being forced to think through it. Previously we were saying you are not listening, so people were getting very emotional. Now I think the wrinkles on everybody s forehead mean that people will now listen and I think we will also do some more homework because now we think people will actually listen to us.

Mani gave an example of attrition where there was now agreement concerning the expectations of the other, even though there was a lack of agreement on the substantive contents:

In the last year, I think a lot of people have come to terms, understood what are the gravity or complexities of attrition. So now, although they are very disappointed in the sense that they thought if we did some nice initiatives, made some recognition measures and so on, attrition would significantly go down, they are far more aware that the complexity of the problem is much deeper. Now we understand that attrition is something we have to manage not solve. But I would say it is probably more realistic. We can get into a more meaningful dialogue with people today than we could last year.

This stage of stabilization, as reflected in the common framework for dialogue, was accompanied by other tensions, including the ˜right-angle turn that raised the question of whether MCI should support this turn or help maintain the legacy products. The latter option would help free GlobTel s expensive resources to work on ˜webtone product development, making budgets for dialtone systems a ˜shrinking pie . A sense of stability came as the legacy option was selected. In 1999, many senior staff from both sides who had been responsible for establishing the relationship either resigned or retired (for example, Paul and Ghosh from GlobTel and Mani from MCI). For MCI, 1999 represented an all-time low in the relationship in terms of growth. Ashok (Mani s replacement) described MCI s management as being unhappy with this, especially given the manner in which the rest of the software industry and other parts of MCI were growing. In the context of the ˜shrinking pie , the potential for future growth of the relationship seemed bleak. Stabilization thus seemed temporary, and fraught with its own internal contradictions and tensions.

A summary of the key events and their interpretation is provided in table 6.1, which is then followed by the case analysis.

Table 6.1: Time line of key events in the GlobTel “MCI case study

Time period

Key events

Our interpretation of key events

Basis for interpretation

Initiation phase (1991 “6)

Initiation: 1991

Telecom links rise from 9.6 kB to 128 kB

Work evolves slowly from level 1 to level 2

MCI establishes dedicated lab for GlobTel work in Mumbai

GlobTel invests in replicating Ottawa development environment in Mumbai

GlobTel enhances voice paths from 2 to 5 “8 to support independent work

Number of developers in MCI working on GlobTel projects increases from 10 to 70 and then to 300

GlobTel is one of MCI s top 10 customers and contributes 5 per cent of their overall international revenues

GlobTel locates expatriates in India Attrition is a key issue

Gradual evolution of level and quantum of work

Growing investment in infrastructure from both sides signals building of longterm commitment

GlobTel s attempts to micro-manage resisted by MCI

Historical reconstruction

Growth phase (1997 “8)

Senior GlobTel executives visit Mumbai MCI is designated as GlobTel s ˜brother lab

GlobTel proposes to establish own development centre in India (GSODC)

MCI proposes to increase on-site presence in North America

Work evolves to Level 3, involving the transfer of ownership

Growth in number of programmers “ around 400

Relationship reaches a high in terms of MCI revenue

Attrition seen as a burning issue

MCI see themselves as being ˜included in the GlobTel family

MCI resist GSODC initiative as it will stunt their growth

GlobTel reject MCI initiative as it will increase costs

Increased responsibility and expectations of MCI

GlobTel finds it hard to release responsibility of ownership and control

˜Real time interviewing

Stabilization phase (1999 “2000)

˜Right-angle turn for GlobTel to respond to the Internet challenge

GlobTel decides to use MCI to support legacy systems rather than the ˜right-angle turn

Relationship stagnates in terms of revenues and number of programmers, pessimistic outlook

Stabilization, though not agreement, in understanding of expectations of the other

MCI left holding the legacy systems

Disappointment as a result

GlobTel seeks new possibilities in India

˜Real time interviewing

Global IT outsourcing
Global IT Outsourcing: Software Development across Borders
ISBN: 0521039487
EAN: 2147483647
Year: 2003
Pages: 91
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