1	"Offshore-Development with Customer Development Center" Offshore-Development with Customer Development Center 16. December 2005
2	Content Goal Model of Cooperation Setup of an Off-Shore „Development Center“ Price Model
3	Goal Because of high cost pressure, many customers are looking for a business partner for dealing with IT-Projects through the whole process from Drafts to Rollout with unified Management and professional Project Management methods offering an attractive Cost/Benefit ratio a long-term binding of workers in the running project should be guaranteed.
4	Goal (other criteria) We have worked out this offer, besides basic criteria, under consideration of following goals: Building of a long-term cooperation strategy Availability of highly competent employees Execution of the development process in mixed teams with customers Simple and formal dealing through one contractor Stepwise building of „Development Centers“ Reduction of development costs through step-by-step transition from „On-Side“ to „Off-Shore“ Development Success-oriented business model with stepwise takeover of legal responsibility through the contractor
5	Model of Cooperation Role and Duties of Cydrel Consulting Cydrel Consulting represents the roof over the Firms: the only partner for communication with customers provides the employees in consideration to project needs takes direct and full responsibility towards customers management and coordination of all development processes Stepwise building of „Development Centers“ organizational technical (i.e. Network connection) Competence (partly technical, emphasis: Development standards) especially structuring the specifically required competence at General Cybernetics (i.e. Project and customer specific courses for employees)
6	Comparison to the currently available models of cooperation among IT service providers Model A Purchase through Recruiting-Company (pure Body-Leasing) faster access to different of resources + partially competitive rates for developers + only conditionally long-term Binding - often long chain of companies in between - often only Know-How of individuals without - the company as Back Office Often difficult management because there is no - single company responsible for the service
7	Comparison to the currently available models of cooperation among IT service providers Model B Strategic cooperation with large IT consultancies faster access to different resources + generally higher average rate - long-term binding possible + IT Consultancy can take responsibility in great extent + dependence - different company cultures -
8	Comparison to the currently available models of cooperation among IT service providers Cooperation according to our model not until the completion of the „Development Center“ faster access to more resources - At start of work preparation time of 2-3 months needed for putting together a Team on site in the range of i.e. 15-25 workers - decreasing costs as a function of time while building at the same time competence of the „Off-Shore“ Partner + long-term binding possible + The partner can take over, increasing with time, the responsibility + Full integration of customer‘s processes, standards and company culture +
9	Setting up of a Development Center Setup of a „Development Center“ takes place in phases, which take about 3-6 months. Steps are built on top of one another. The setup is designed deliberately on a longer period of time to: 1. give customer a possibility to opt out without great risk at any time 2. create one underpinned basis for management of other projects The setup takes places through Cydrel Consulting parallel with the project. The progress will be constantly reported. Planning and all single steps are arranged and agreed to together. Customer has the possibility to get involved at any time.
10	Setup of a „Development Center“ first steps Phase 1 Setup of the Cydrel Consulting management team in the first month without participation of General Cybernetics. Then, selection and education of employees of General Cybernetics accordingly to project needs and integration in the project on-site. Starting with the second month until the end of the first phase, setup of a development area at General Cybernetics. Making of a basis for long-term „Off-Shore“.
11	Setup of a „Development Center“
12	Setup of a „Development Center“ Phase 1 1. Setup of a basic training of employees Development processes, project controlling and reporting, quality management Project-specific development Know-How: technical architecture, use of software development environment, Project-standards, Configuration management, ... Project-specific technical Know-How 2. Build of the process model Work out the relevant documents/drafts, check their up-to-date status and updating if needed. 3. Hardware prerequisites Specific development computers obtain, configure and make available and ready at General Cybernetics. Setup of and access to development environment and customer’s host
13	Setup of a „Development Center“ Phase 1 4. Software prerequisites fulfillment Provide and install development licenses Work out concepts for data exchange and mutual update in Master Repository in Germany and implement the „off-shore“ Configurations management accordingly 5. Organizational prerequisites management Establish the technical support Establish technical architecture Sign Service Level Agreements with others involved in Project at the customer side Define the general project organization with the integration of the off-shore part
14	Setup of a „Development Center“ Phase 2 Project execution with Off-shore part: About 50% of employees that were deployed, in Phase 1 of the Project in Germany, are going back to the Development Center and are added there in ratio 1:1 with other employees. In addition, creation of Management resources at General Cybernetics After the successful completion of prerequisites (1.-5.): Start of the first Off-shore project part. Simultaneous creation of other teams in Germany Doing a part of the service at a fixed price.
15	Setup of a „Development Center“ Phase 3 Raising the percentage of involvement through General Cybernetics „On-Side“ as „Off-Shore“ Management and execution of other „Off-shore“ partial projects Extension of the Team in Germany Doing other projects based on fixed price Completion of the setup of „Development Center“ as prerequisite for execution of other Projects
16	Setup of a „Development Center“ off-Shore Part An Off-Shore – part of about 46% can be reached on the basis of the following values gathered from experience and framework: (Example for 5.000 PD)
17	Price model Following price model considers all personal expenses that are required for the completion of Development Center in three phases. Additional expenses that are required for the setup (training and coordination) of employees On-Side and Off-Shore but do not raise directly the performance in the project, are taken into account in the average day costs. The same is valid for the expected travel expenses. Additional expenses for Hardware, Software and other technical necessities are project-specific and cannot be determined at the present time. Therefore, they are not contained in the total price and must be calculated and identified for each project.
18	Price model Average daily expenses in a project (at 30% customer part, calculation of external expenses)
19	Price model Additional expenses for setup of a „Development Center“ through a German company
20	Main points of this Model: Significant reduction of expenses compared to usual development expenses in Germany. Greater competence in Project management at supplier side through which is the project risk contained in the normal range. Simplified formal contract dealing through only one company (Cydrel Consulting). Possibility of a price wise favorable execution through cooperation with General Cybernetics On-Side and framework of the “Off-Shore” Concept. Possibility of binding some employees in project management in mixed Teams, creation of a long term Know-How through that and ability to manage single project independently. As a result, a „Development Center“ is created with specific project requirements of the customer. This can be then used on a long term basis by the customer. Geografical location of “Development Center“ within Europe, less travel times and costs. Better integration of infrastructure with the customer
21	Main points of this Model: Long term saving potential Example calculation: In a Project with total expense of 5,000 PD can be saved about 1.05 million € through the use of a „Development Center“ (38% of the expenses are saved maintaining the same performance.)
22	Contact Cydrel GmbH. Bismarckstraße 144 D-66121 Saarbrücken Dr. Joseph Binder E-Mail: joseph.binder@cydrel.com joseph.binder@gencyb.com Fon: +49 (173) 886 0286 Dr. Lazar Bojanic E-Mail: lazar.bojanic@gencyb.com Fon: +381 (64) 112 4988 Web: http://www.cydrel.com