Live from Delphi - When Your Business Knowledge Goes East

I am attending the Delphi Business and Process Innovation Summit this week and blogging as I go.

Christian de Neef was next up on When Your Business Knowledge Goes East... Key Risks and Benefits of Offshoring Business Critical Applications. Christian gave an overview of various markets for outsourcing and showed how large top-tier companies are moving more and more jobs offshore. One interesting note is that he and several audience members felt that approximately 1.5 jobs are created for each job outsourced thanks to the process style, asynchronous communication etc. That said, many of the companies in India, for example, have strong process maturity around Six Sigma, ISO 9000, CMM etc. Very disciplined on process but this can produce well managed rubbish if you don't watch it. He outlined how outsourcing started with infrastructure then application development now increasingly vertical. Knowledge Processes beginning to be outsourced also. I am not sure I buy this - I think companies are automating these kind of processes rather than outsourcing them (see this section on Business Process Outsourcing (BPO) on my other blog for instance).

His case study was on Axa and their attempt to reinvent themselves by using very fined grained segmentation, targeting with new product packaging and loyalty management (typical insurance strategy - see this section over on the other blog about insurance). They wanted to use a product factory (software to build insurance products), tariff engine (rating engine) and rules engine. But getting the rules right by analyzing code was hard and was outsourced. In this situation the outsourcer said yes too much (underestimated complexity, not enough Axa resources, quality of rules poor). The lesson learned was not to leave the rules in the hands of the outsourcer - well duh! That would be why you should put it in a rules engine! Then your business people can control them and the outsourcer can run the process.

This was more of a case study in how NOT to manage legacy modernization and all these problems are typical when folks try to get legacy rules into a rules engine without thinking about it enough.

Christian was an excellent presenter and I am not saying that just because he gave out Belgium Chocolates! I am speaking tomorrow.

Technorati Tags: agility, BRE, BRMS, Business Rules, decision technology, legacy modernization, BPO