CSC: Expanding Global Delivery Network
Global IT services company, Computer Sciences Corporation (CSC) has expanded its global footprint significantly with multiple locations spread around Eastern Europe, Latin America and Asia. Having recently received recognition for being one of the top global providers of service in the industry, SSON spoke to Grant D. Marques, VP Global Strategy, World Sourcing Capabilities, CSC about their strategy, looking to Lithuania as one of his most recent success stories .
*View all content in the Lithuania: Northern Europe Service Hub for 2015 Series
SSON: Grant, why did CSC choose Lithuania as a location to outsource or to work as an outsourcer from?
GR: Several years ago CSC made the decision to further expand our global footprint beyond our already well established base in India. We recognized the value of offering our clients a delivery capability comprised of more than just their local region plus India. So in making the decision to expand our global delivery network we focused on specific and strategic high value and emerging markets, one of which was Eastern Europe. We considered several options within the region and ultimately we chose Lithuania based on the availability of skilled labor and the presence of various languages that we required to support our target client market. It’s also an attractive economic environment and an easy place to do business.
SSON: How does the Lithuanian operation fit in with the global CSC strategy?
GR: Every year we take a look at the landscape and review our strategy and where we are in the world, and then where we would like to be in the world. A few years back we set our sights on Eastern Europe, on certain parts of Asia and on Latin America. And so as part of our Eastern European strategy, Lithuania is one of a few different locations that we leverage for specific client needs.
SSON: So where are you now on that road in world domination?
GR: [Laughs] We’ve expanded our global footprint significantly since we set out to do that. We have multiple locations spread around Eastern Europe, Latin America and Asia, so we are well down the path. We’ve gotten recent recognition for being one of the top global providers of service in the industry in part as a result of these efforts. But this is the type of journey that’s never over, it’s constantly being revisited. Every year we review our strategy, we set our objectives for the various geographies and we always look at new emerging markets and keep moving forward.
SSON: Grant, CSC has made acquisitions - is this part of the Global Strategy to spread your global footprint?
GR: We have made acquisitions; that’s one of our strategies for growth. It depends on our objective and it depends on the region, so we have to ask if there is an appropriate business that is already in a marketplace that is compatible with our objectives? If it is acquirable, then we’ll go down that path. In the case of Lithuania we did this through organic growth and we just started from the ground up.
SSON: So what customers are you serving from the Lithuanian location?
GR: Primarily we support a range of clients from our Nordic region which spans multiple industries. So we have a client base in the transportation industry, specifically the airlines. We also have a Telecom base, insurance and financial services support, some facility services and the media industry services in general.
SSON: Do the type of services you offer dictate the location you work from?
GR: Absolutely. One of our objectives, when we determine where to set up operations or the best location to execute work from really, is to understand and leverage the indigenous talent and the various capabilities in industries that are prevailing in a region. We focus our efforts on tapping into that talent. We strive to provide the best overall value for our client by putting the work in the highest value location for their specific engagement. This doesn’t mean that we can’t bring new capabilities and expertise into a region, we do that on a regular basis as well, but we really try to take advantage of the depth of skill and capability that’s already present within a location.
SSON: How did Invest Lithuania help you to set up services in Vilnius?
GR: Invest Lithuania has actually been fairly instrumental in helping us to establish relationships in the Lithuanian business community. And I've had the personal pleasure of meeting Prime Minister Kubilius, the Minister of the Economy and other important business leaders that support us in our efforts there. Invest Lithuania extended their support to CSC as we’ve further developed our strategy to expand and leverage our capabilities within that country.
SSON: Grant, you also have experience in implementing operations for CSC in India and other global regions. From this experience, what key elements are required to make a new location work and become a success?
GR: Good question! I've set up, managed and run operations in several different regions around the world, and what I've found is that it’s just really of critical importance to understand the culture of a region. I find that although we all share the same fundamental human values, whatever motivates an individual in one country may be completely different from another. When CSC enters a new area, we don’t simply set up shop and throw the doors open and expect to be successful; we work really hard to understand what the local values and the culture of a region are. And then we also take steps to introduce the people of the region to the culture and the values of CSC. So every time we do this, each location really maintains its own cultural identity, but it represents the same CSC standards of ethics, integrity and industry leadership around the globe.
We also work hard to become part of the community and to give something back. So wherever a CSC operation is located, we participate in programs that are designed to keep our workforce engaged in community activities. An example specific to Lithuania, recently we were honored to receive the American Corporate Citizenship Award from the US Baltic Foundation, and that was specifically for our charitable work with the Pabrade Children’s Center as well as our participation with the American Red Cross in local blood drives.
SSON: In the last two years different headlines have come out of the US which questions the role of outsourcing jobs from the US. Firstly, we had protectionism, more recently the US proposal to increase the cost of business visas and that it may be cheaper to keep back office services in the US now rather than actually going abroad. Have such headlines affected your business strategy or is it all hot air?
GR: It’s a very legitimate question. I would say that early on in my personal experience of outsourcing and offshoring, I was one of those hold-outs that thought that ultimately this was bad for America and I had a lot of concerns about it. But I will honestly say that over the last decade and half the original vision of putting the work in the best location for the work, and the movement of one particular type of work from one country to another, doesn’t necessarily mean the end of the industry in the country that it’s moved from. It simply means that there’s some roles in our industry that are more suited to offshoring and some that are best delivered locally. Having a truly global delivery capability means that all of those jobs continue to expand and grow. So I don’t think it’s a threat per se for the local workforce in any country where some of the work happens to be moved to another location, not in any way.
SSON: And what about the theory that some of these services are now cheaper to operate in the US than actually move abroad?
GR: Well, again, I think it comes back to putting the right work in the right location. Recently I was chatting with a client and they were asking me similar questions about how we decide where to do certain work. And one of the things I said to them was that if it was just about cost we’d all be having this conversation in Indonesia right now.
It’s really about value. So certainly there are going to be things that will be more efficient to do in the local region, but there are an awful lot of other things that can be done cheaper and distributed globally, it’s about putting the right work in the right place.
SSON: How long does it take from deciding on a location such as Lithuania to going live with services there?
GR: Lithuania was a case of organic growth as opposed to an acquisition, and it took us about 6 months from making the decision on Lithuania to the time we were up and running. And actually according to plan, within just about a year from going live we outgrew our first facility and have moved into a larger one.
SSON: What red tape issues do you face before making an outsource location work?
GR: There are always challenges and actually six months is pretty good for organic growth. Challenges range from some very simplistic things when you go into a new region, such as determining where the best physical location for the office is and establishing the norms and standards for paying rent, that sort of thing. Then there are more complex issues, such as understanding locally available economic incentive programs and how to best leverage those to optimize the value for CSC and our client base. So resolving these types of questions and everything in between is where having relationships with organizations like Invest Lithuania is really valuable. You have to have somebody that you can lean on to use their knowledge and experience within a region to avoid preventable mistakes that could otherwise happen.
SSON: Having operations in 90 plus countries, CSC has experience in managing necessary compliance and tax for each region. Can you tell us how you went about that in Lithuania?
GR: There’s a highly complex maze of regulatory and legal requirements that you have to navigate your way through, our approach is to partner our own experts with the appropriate local council, so we can perform that navigation. At this point in CSC’s history, we’ve been in business for a little over fifty years now, we have the experience and knowledge to know what questions to ask, and generally speaking, we know what answers to expect. So I think the strategy that’s worked well for us is to find a good reliable partner, to bring our experts in, ask these questions and then adapt our strategies and plans accordingly so that we can get to market as quickly as possible, but never to sacrifice the high ethical standards of CSC as a company.
SSON: You’re hoping to expand to anywhere between 300 and 400 employees in the next few years. How do you deal with attrition and what’s your secret to holding on to talent, if you have one?
GR: Attrition is a topic that is near and dear to my heart. When I was sent to India that was one of the big things that CSC, like all companies, had to deal with. I mentioned earlier that I find that what motivates people in different countries can vary, but there really is only one concept and that one concept is that our people want to feel that they’re adding value, and they want to feel that their personal contribution is recognized. So, it’s relatively straightforward when it’s part of your culture to make sure that every day we celebrate our successes as a team and recognize personal contributions. We strive to provide opportunities for growth for our employees, that are both challenging and rewarding for them personally, as well as bring value to our client base. And then most importantly we always treat each other with respect, I think if you do those three things and they’re really ingrained in your culture, attrition pretty much takes care of itself.
SSON: For anyone who is considering moving services to either the Baltic State, Eastern Europe or India, what challenges can they expect to encounter and any advice to overcome them?
GR: I think, it’s going to sound a little bit like a cop out, but Lithuania has been a very easy place to do business with. We’ve gotten a very broad range of support. I think the thing that needs to be kept in mind is that it’s a smaller market; it’s a smaller labor pool. We always look at both our clients’ go to market strategies as well as what our competitors are doing in the market, especially when we’re going into a smaller market, because we’re for all intents and purposes competing for the same talent. But as far as Lithuania goes, there really have been no surprises, other than the same global economic challenges that every other place in the world has had to deal with in the last two years.
Another advantage for Lithuania is the current government leadership is motivated to attract foreign business, particularly Western business, and they’re very amenable to working with companies such as CSC, to make sure that we succeed. And it’s a great time I think right now to become part of that movement.
SSON: Some might say locations like Ireland were very accommodating in the early 90s, then prices went up and so businesses have moved out of Ireland to the next cheaper location, such as Eastern Europe. Does every location run that risk?
GR: Absolutely. But it doesn’t have to happen. It’s a very relevant question. The
reason that CSC has an organization that is constantly evaluating the world is in response to that phenomenon. There are going to be instances where a country evolves itself out of the competitive landscape, but the challenge, I think, for countries like Lithuania, other Eastern European countries and frankly for India and places that have come before, is to constantly keep sight of the value that they bring to the industry. If it’s just about cost, there’s always going to be somebody cheaper coming along.
SSON: Grant, thanks so much.
GR: It’s been my pleasure.