Global Sourcing
Case Studies
Sourcing on Right Tracks
Managing a 49,000 miles long railway track, with over 36,000 employees spread across 28 states could be a challenging task. Our client, one of the largest railway companies in the US, has been playing a vital role in connecting a large number of individuals and businesses through this vast network for the last 150 years. About five years ago, the company decided to leverage on outsourcing to manage the complexities of its business in a cost-effective way. It wanted to transform its business model to create a best-in-class infrastructure, combining the latest in technology and business processes.
Business Challenge
The railroad industry, being one of the oldest industries, has not been very progressive in terms of its IT usage. Government regulations, lack of control over revenue management and a conservative approach of doing business have all posed a hindrance. Building a scalable technology solution for a large railway company was in itself a challenge. Before it decided to go for a revamp, the company was highly dependant on a group of contract workers for its IT needs with limited control over cost or time schedules and room for better alignment of business with IT.
The client wanted to move from this approach to a more process-oriented model. It was looking at leveraging outsourcing to manage costs and IT deployment in a more effective and efficient manner. But the organization's lack of experience in outsourcing and more so in dealing with an offshore outsourcing vendor was delaying it from taking the plunge.
Partnering with Infosys
The client set out to look for an offshore IT vendor capable of delivering high quality software solutions. Infosys was selected because of its exposure to the industry, proven delivery track record in other industries and the process capability maturity. However, in the initial phase, client's approach to sourcing was rather cautious due to the fear of losing control. In order to manage the outsourcing relationship, the company created a governance structure, where five people would constantly monitor the entire operation.
Cultural Adaptation
Being its first experience in offshore outsourcing, it was natural for the client to have its doubts. And Infosys went that "extra mile" in clearing all the doubts. Besides demonstrating its capabilities in predictability, profits maturity and project management as part of the Global Delivery Model, Infosys created a special program to bridge the cultural divide between the two countries. An 'India Day' was celebrated in the US to help the team learn about the unique Indian culture and way of life. This helped improve mutual understanding and gain respect for each other.
Step-by-Step Solution
After making an assessment of client's needs and existing structure, Infosys rolled out a series of applications tailored to meet its requirements. A number of existing business processes were automated, while some new innovative applications were also created. The Track Measurement and Analysis system, for example, was a customized solution created for managing and improving tracks. This is also useful in analyzing the possible reasons of derailment and preventing them. Another system was designed to help track the inventory and repair information of all cars and locos. Several other business applications were created in areas like Time Keeping, Finance and Revenue Management, Safety Systems and Reference files system, which enables the client to maintain a central repository of corporate and industry carrier data. In order to manage an over 36,000-workforce, a number of HR applications were also developed. Infosys' team worked in sync with HR and Payroll divisions to roll out the Mechanical Manpower Planning System, to process manpower updates, on a real-time basis. Specially customized applications for managing job bidding, crew layoffs, personnel management, compensation and rewards etc. were also developed.
Delivering Business Value
The relationship that began with a number of apprehensions has transformed into a strong partnership over the last five years. All the projects delivered till today have been rated above par level on various quality parameters like on-time delivery, budget compliance, accuracy of estimation and quality of software. Interestingly, Infosys has also been awarded for "Best Cultural Fit."
Automation of key business applications and streamlining of operations has resulted in improving accuracy & timeliness and generated savings worth $325,000 in operating expenses. As a result, the company has been able to utilize its resources for more strategic business initiatives. In value terms, this relationship helped generate savings of more than $20 million. The company has been able to reduce expenses by 35-40%. With increased confidence in Infosys' capabilities and delivery excellence, the client has also involved Infosys Consulting in some niche areas of IT business consulting.
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