With more than 1300 IT Captives and the number only increasing, India stands out as the most preferred IT captive location for global corporations. The Do It Yourself (DIY) is catching up fast with most of the large companies who are going all out with removing the existing contractors. They are either establishing or growing their captives. CIOs and CFOs state two clear reasons for such a shift – One being ‘Cost reduction’ and second being ‘Investing in their talent.’ Companies that have been already dealing with offshore workforce through their service providers find it easy to transition due to their familiarity with the geography and to work in different time zones. The challenges of a DIY, however, are more than what meets the eye. ScrumStart did a study and came out with the five major areas of concern that can potentially eliminate any cost advantage that comes with the DIY model.
1. Initial Investment & long gestation:
Initial High Capex can be a big dampener to the DIY model of setting up a captive operation in an offshore location. To add to this, the regulatory formalities, setting up own office, the overlap of knowledge transfer, the hiring of overhead staff and long hiring cycle pushes the ROI to an average of three years. ScrumStart ‘Virtual Captive’ makes it very easy for companies to get a quick start where these starting issues and the need for Capex to start are taken care of by ScrumStart. Expert team and a template of success ensure a far quicker start and an ROI that is always less than one year.
2. Attracting right talent:
A new company finds it very difficult to attract talent on their payroll. The lack of branding and size makes acquiring talent more expensive while retaining them is another challenge. Average of 25% attrition is a common phenomenon in a new captive setup. ScrumStart has a permanent base in India apart from Finland, UK and the USA and a good brand image that attracts good talent. The Talent academy adds to this flexibility where fresh graduates are trained and put in the system when they are productive for their clients. An expert team that is drawn from product groups, as well as the partner ecosystem, ensures that difficult to find talent is made available quickly for short or longer duration as needed.
The success of a captive entirely depends on the governance of the project. An experienced onsite and offsite program management team is difficult to assemble for most of the companies. A less experienced team can lead to failure or suboptimal outcomes of a captive agenda. ScrumStart has years of experience in doing this primarily for a captive success and ensures the best return on investment for every virtual captive program. Automated platforms and CXO level team ensures that program governance is set in and achieves its mandate earlier than planned.
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DIY works well for operational work, but when it comes to one-off innovation, lack of resources and inability to assemble just the right team for the given time is a challenge. ScrumStart focusses heavily on innovation that is supported by its R&D labs in Helsinki and India. With an ecosystem of partners & best resources at hand, ScrumStart provides an edge that very few partners can.
5. Cost Advantage:
The primary motivation for DIY is the cost advantage that ScrumStart gives even better through ‘Trust Pricing Model’. With Transparent cost-plus pricing structure, shared rare top talent, zero tax, and regulatory compliance concerns ensure ScrumStart as cost-effective as own company captive. The most significant advantage of ScrumStart that makes it better than DIY Captive is the quick start and zero CapEx that starts giving the return on investment within first year itself as against three years for own company captive.