I Don't Understand Virtual Captive | ScrumStart

I Don’t Understand Virtual Captive


Technology throws out hundreds of lingos every year. SOA, SAS, Kafka, Python, KitKat, and the list goes on. Few jargons have some story attached while most of them happen to be the lingo of nerds who keep churning out something that might catch the attention of the user community. Thankfully, technology services do not see such exciting names, and therefore when ScrumStart went public with their Virtual Captive delivery model, the first question we often faced was ‘What is this Virtual Captive?’

Founders of ScrumStart Virtual Captive business delivery model have seasoned executives with vast experience in technology services from the software services companies as well as from the IT Captive. They also were on the management side to clearly understand the challenges that were faced by companies with all the available IT delivery models viz. In-house, locally outsource offshore outsourcing, In-house offshore (Captive) and hybrid model. Companies have always faced the most significant challenge from the US that has been at the forefront of change and does not shy away from investing in technology, thereby bringing every possible model into play.

With limited talented and cost-effective workforce within the country, US companies often look offshore to tap skilled, low-cost resources that have traditionally been the forte of IT Service companies. Later, companies started creating their own IT offshore companies in low cost and high talent geographies like India. As per NASSCOM, there are more than 1500 IT Captive companies in India, affirming the fact that ‘Do it yourself’ is fast growing and gaining traction.

When ScrumStart started its first survey, it was evident that CIOs of more than fifty percent of large companies were looking at Captives as their solution for getting better flexibility, transparency and cost advantage, but the real hurdles in making that happen were hidden behind management complexities that were not visible to most of the analysts and consultants.

Related BlogWhy ScrumStart “Virtual Captive” Can Be Even Better Than Starting Your Own Captive of DIY Model

More than 80% of these CIOs were candid in admitting that any such move would potentially rock the boat with existing suppliers playing tricks and forcing them to continue with the status quo. While this appears to be unsubstantiated, the fear was understandable. More than 50% of the CIOs were unable to convince their management and the CFO in particular about the cost benefit. “Most of the consultants normally beat around the bush to give vague answers and never taking one stand” was the comment of a CIO who is still struggling with his management indecision. To add to this problem, rarely any CIO would get access to a real-life captive situation with a detailed cost-benefit analysis. Finally, more than 60% of the CIO had little time and resource to investigate and plan for a captive while they wanted to set up one for their company.

Virtual Captive Solution of ScrumStart took these input and created support work that would provide a qualified business case, capex free operations, transparency, and cost advantage that made it significantly better than every other option. However, understanding that the proof of the pudding is in details and results; POC has been mandated as a recommended start for companies looking for a bigger virtual captive.

Criticality of a captive comes with the fact that if the setup and initial management are not to the mark, it compromises the benefit that could be achieved. Therefore ScrumStart created the best practices and templates that would ensure that any failures are reduced to a minimum. Such templates and best practices primarily focused on creating a culture of working in different time zones and understanding each other’s culture. Finding right leaders, full time or shared is the next step followed with setting up strong and transparent governance thereafter ropes in the intended benefits.

ScrumStart makes setting up a Virtual Captive and transitioning to company-owned captive so easy that the practice can be easily termed as “Setting up captive for dummies.”

Download our latest whitepaper on Virtual Captive Solution.