In the past two decades, I have delivered over $600 million of enterprise-scale IT programs primarily in the financial services sector. In most instances, I bought testing/QA/QE from an internal shared services organization with a large offshore component. In that time, I saw markets collapse and companies go under due to poor decision making. With examples like Blockbuster vs Netflix, it is either adapt or go out of business.
With what I know and the positions I’ve held, I sit here today thinking what would happen to me right now as the COVID 19 pandemic rages in India and other off-shore locations? First, my QA supply chain would be broken, second, my program would be seriously delayed or even fail, and third, my fixed program costs would keep adding up.
This begs the question to current QA executives, what are you waiting for? Re-shore QA now! Remove these risks for me. Improve my resiliency. Take back sleepless nights of watching the sunrise and provide stability for the company and yourself.
It is not a question of ‘if’ you re-shore, that bus has left the station. It is not even a question of ‘when’ you re-shore. The pandemic in India and other ‘off-shore’ geographies means your FI has already re-shored your call centres and your BPO. Your application support and QA capabilities have been severely degraded. You need to make serious decisions and start these transitions now. The real questions seem tactical – ‘how’ you transition and ‘who’ you pick as an on-shore partner.
The ‘how’ and ‘who’ is not easy. It is complicated by uncertainty whether to view this as a temporary or permanent situation.
Where does that leave QA executives?
- Re-engineer the QA / QE function as part of the transition,
- ‘Skinny’ the function to meet top-down cost reduction targets in the range of 35% or more,
- Assess and manage a demand-side reduction focused on critical application support and ‘run the bank’ projects,
- Scale-up to deal with the seismic shift to digital channels
- Pay attention to the many Human Resource issues and opportunities
The pandemic is going to be around for some time, and the lag effects will be mostly seen in countries such as India.
What should you do?
Plan for a permanent re-shore of your core QA function to a supplier partner who has a North American QA/QE platform and a re-shore lead with executive leadership experience. Pick a partner who can show successes in re-engineering the QA/QE function, and work with them on a shared risk roadmap of re-shoring and re-engineering. Use this as an opportunity to do financial re-engineering of your outsourcing agreement incorporating on-demand and outcome-based QA.
This will dramatically reduce bench cost and provide performance metrics aligned to your cost reduction targets and uncertain demand-side. And explore re-badging opportunities with your partner so critical employees and capabilities are saved.