1. Creating Customer Value
My understanding with my organization
EPGP 2009-10 - Term I – End Term Project Submission
24-Oct-2009
Instructor: Prof. Ashish Sadh
Submitted by:
Rajendra Inani – Roll # 27
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2. Table of Contents
1 CREATING CUSTOMER VALUE – TOPICS COVERED IN THE CLASS - SUMMARY....................................................3
2 BSIL - ABOUT THE COMPANY – ITS ORIGIN AND GROWTH.................................................................................4
3 BUSINESS ENGAGEMENT MODELS....................................................................................................................5
3.1 DELIVERY MODELS.....................................................................................................................................................5
3.2 BUSINESS MODELS.....................................................................................................................................................6
3.3 PARTNERSHIP MODELS................................................................................................................................................6
4 HANDLING CUSTOMER COMPLAINTS ...............................................................................................................7
5 SEGMENTATION, TARGETING AND POSITIONING..............................................................................................8
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3. 1 Creating Customer Value – Topics covered in the class - Summary
Following topics were covered during the Term I, of EPGP class. As per my learning during this term in
this class, I have tried to map them with my last organization - Blue Star Infotech Limited (BSIL), where
I worked as part of offshore software delivery team.
1. Approaches of organization towards customer
a. Developing a marketing oriented organization
b. The case of complaining customer
2. Customer value creation (Key decision areas)
3. Understanding the elements of customer value creation
4. Opportunity analysis for value creation
5. Analyzing buyer’s behaviour
a. Complex decision making
b. Low involvement purchases
c. Industrial buyer behaviour
6. Segmentation, targeting and positioning
7. Dealing with competition
8. What is a product
9. Product line management
10. Managing services
11. Pricing decisions
BSIL is a software services provider company having 1300 plus employees with 5 software development
centers in India (at Mumbai and Bangalore). It has sales offices around the globe with majority of
business coming from North America, Europe and Japan.
Most of its sales go through Industrial Buyer Behaviour, as most of its clients are medium to large
organizations, which need customized software development or implementation. BSIL do not offer as
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4. such any specific software application product of its own, but mostly either in custom software
development for its end client business needs or implementation of a large enterprise software
application.
Pricing of BSIL services are driven through market rates of particular software services as it does not
have any niche software of its own. But, in long term client relationship management, it is able to drive
better resource rates and continue to leverage on the same.
BSIL have competition with middle tier (second tier) software industries from India and overseas. Mastek,
Polaries, Cybertech etc. are similar companies (Rs 100 to 500 Cr. annual turnover), who’s business
model and skill matches with that of BSIL. Client while making decision for awarding a business usually
compares among these companies.
2 BSIL - About the company – its origin and growth
The origin of Blue Star Infotech dates back to 1983 when the International Software Division (ISD) of Blue
Star was founded at SEEPZ, Mumbai. The period between 1983 and 1989 was crucial as the foundation
for its long -lasting relationship with Hewlett - Packard was established during this period.
The period 1990-1995 was a milestone as it saw the company building relationships with a growing
number of overseas and domestic customers and expanding its offices. In 1991, ISD ventured into the
domestic Indian market. In March 1990, Blue Star Infotech acquired a 100% owned subsidiary in USA
called USIN International Inc later renamed as Blue Star Infotech America, Inc. Over the next few years,
ISD executed several prestigious domestic projects for leading Indian companies such as Tata Electric
Company, Bajaj Electricals, Castrol India, and Boots Pharmaceuticals. During this period, it further
expanded its relationships with Hewlett-Packard and 3M.
The year 1998 was remarkable for Blue Star Infotech with the HP relationship turning into a major
engagement with the setting up of an ‘Extended Office’ in ISD’s new facility at Bangalore. Another
accomplishment in 1998 was the ISO 9001 certification awarded to ISD. On 1st September, 1998 Blue
Star Infotech set up its 100% owned subsidiary in United Kingdom.
Blue Star Infotech’s strong performance and the fast growth pace of the Indian IT Services industry, led
the management to unlock the company’s untapped value by deciding to demerge resulting in the
formation of Blue Star Infotech in 2000. In 2003, Blue Star Infotech was successfully assessed at SEI-
CMMi Level 5. Blue Star Infotech was re-assessed at CMMI Level 3 v1.2 Release in October 2008
In September 2009, Zinnov ranked Blue Star Infotech 12th among 100 top R & D service providers
across the US, India, China and Eastern Europe, that were reviewed across 18 parameters grouped into
the major categories of financial strength, people strength, operations, innovation, expertise and business
models.
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5. Blue Star Infotech enjoys long-term relationships with most of its customers. It has a distinguished list of
customers across different industries such as Manufacturing, Financial Services, Travel, Retail,
Technology, Life Sciences and Engineering.
3 Business Engagement Models
Customers, in today’s global marketplace, require the flexibility to choose from a variety of engagement
models or develop a custom model. Based on the need, Blue Star Infotech works with each of its
customers to establish these engagement models. Its standard models are structured along 2
dimensions: Delivery, Business and Partnership Models.
The Delivery Model provides a client with options to determine the right framework for the engagement
and the Business Model defines the commercial arrangements for the engagement. Based on one’s
business needs and long-term strategies, this would help the client to make the right decision or even
customize these further. Partnership model mostly helps in overseas market to acquire new business.
3.1 Delivery Models
Delivery Model
Offshore Extended Office
Development (EO)
Center(ODC)
Offshore Development Center (ODC) - The ODC Model, utilized by customers seeking a long-term
engagement, is dedicated to servicing the customer and customized to the customer’s needs – in terms of
infrastructure, staffing and security. Such a model has a number of benefits such as: longevity of the ODC
staff, high-level of familiarization with the customer’s business and improved productivity and efficiency
over a period of time. It also offers the option of selecting either a Dedicated ODC or Shared ODC.
Extended Office (EO) - The EO model is a virtual extension of the customer’s IT arm. In this model, the
offshore staff access the environment provided by the customer through secure connections. BSIL takes
responsibility for the EO resources but the infrastructure is managed by the customer staff directly. This is
normally utilized when it is not possible to simulate an environment offshore due to prohibitive costs or
availability of capacity or high-security requirements.
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6. 3.2 Business Models
Business Models
Time & Material Build, Operate &
Fixed Price (FP) Co-Sourcing
(T&M) Transfer (BOT)
Fixed Price (FP) - The fixed price model can be employed when the scope and specifications are
reasonably clear, and not subject to frequent changes. For customers, this is a low-risk model, as it
guarantees delivery of defined scope within the stipulated time and cost. In this model, BSIL take end-to-
end charge of the assigned scope.
Time & Material (T&M) - This model is most suited when the scope is not well-defined or evolving or if
there is a strong overlap between Blue Star Infotech and customer staff or frequent switching of
priorities/tasks or if the customer requires flexibility in the size of the team. While BSIL take the
management responsibility for ensuring the deliverables, the customer has control over their work.
Co-Sourcing - This model is typically used by customers requiring a limited number of engineers offshore
with complete management control. In such a model, the pricing arrangement is lower than a typical T&M-
based ODC.
Build, Operate and Transfer (BOT) - This model is typically used by customers having a long-term
vision of establishing their own operations in India. It enables them to rapidly setup an offshore center by
partnering with BSIL, and later transfer it to themselves as their own subsidiary.
3.3 Partnership Models
Partnership Models
Delivery Partner Business Partner Strategic Partner
Business Partner - To expand its market addressability, BSIL offers a Business Partnership model to
companies that offer IT, Consulting and Software Quality services. In such relationships, both partners
are able to expand their market reach by leveraging the combined services portfolio, customer base, skills
and delivery centers.
Strategic Partner – BSIL’s Strategic Partner program seeks to forge alliances with leading product
companies in the following areas: Value-added resale of their products, implementation and support.
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7. Through this program, BSIL engages with leading ISVs in building product capability, product marketing,
customization, professional services and post-implementation support. Its consultants also undergo the
requisite certification processes in order to ensure top-quality services to its customers.
Delivery Partner - For companies with niche technical capabilities and resource base but with limited
market reach, BSIL offers a Delivery Partner model. In this model, BSIL leverages the technical
competency and resource strengths of its partner to execute the various projects. This model creates new
opportunities for the Delivery Partner, exposure to international projects and access to BSIL’s best
practices and CMMI/ISO-based delivery models.
4 Handling customer complaints
BSIL being in a service business, handling customer complaints in a customer friendly manner is one of
the top priorities of the organization. Majority of its projects run under offshore development centre, where
the offshore team has to interface with clients around the globe round the clock. Thus, the company
trains its employees on cross cultural sensitivities apart from having a strict policy to be customer friendly.
Thus, in an event if any deliverable is having issue despite being error at client part, there is always a soft
corner approach towards client, viewing the long term relationship with client. There have been many
instances, where company has provided free support after warrantee period on certain deliverables, or
travelled its employee to client location overseas on its own cost to support a client during a crucial client
business event.
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8. 5 Segmentation, targeting and positioning
Details of BSIL offerings are shown in the following tree diagram. Overall the company’s business is divided into following different “Line of
Business” (LOBs).
Services
Enterprise Travel & Independent
Product Services
Services Hospitality Testing Services
Product
Business Process Competency
ADM Services Microsoft Solutions Oracle eBusiness Consulting Mobility Testing Services Health Sciences Telecom Engineering ISV Services
Intelligence Improvement Centers
Services
Travel Technology SaaS Enablement Transformation
IT Roadmap BugZapper Mobile Computing
Services Center Services
Industrial Cramer
Process Consulting Hospitality Services Product Testing Sunset Services
Automation Competency Center
Process
Specialized Testing Embedded Expansion Services
Prioritization
Product Evaluation Test Automation Integrated Systems Bootstrap Services
Application Portfolio Managed Test
Assessment Centre
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9. Product Services - utilized by ISVs and hardware technology vendors, are delivered on a
collaborative platform, and use a variety of development methodologies such as Scrum, XP, Iterative,
to enable BSIL’s clients to deliver their products to the market in the shortest possible time and at
least cost, without compromising on quality and scope. Blue Star Infotech has an unblemished track
record of having maintained Intellectual Property for its technology clients.
Enterprise Services - are a combination of business process consulting and application
management services that collectively address the end-to-end IT needs of an enterprise thereby
enabling them to focus on what is core to them and leverage the mature practices of a CMMI/ISO
certified delivery organization. BSIL’s VAR partnerships with leading ERP vendors such as Microsoft,
Oracle, SAS and ProClarity provide it with that added advantage, enabling BSIL to deliver value to its
customers.
Travel and Hospitality Services provide organizations servicing both leisure and business travelers
with solutions and services that help improve operational efficiencies, increase distribution channels
and reduce costs through connecting directly to CRS and inventory databases and harnessing
technology.
Independent Testing Services - a suite of ‘low risk-high impact’ offerings, enables CXOs to deliver a
reliable and robust solution to their users. It provides an un-biased perspective on the quality of a
solution, thereby taking up the role of an Independent Certification authority and enabling the CXO to
focus on more critical parts of the development life cycle.
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