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Who are the best providers for applications and digital services in the Belgian market today? What about infrastructure and cloud services? What are the key trends around IT sourcing? #partnershipbenchmark
Updated: Feb 16, 2021
The banking industry is facing disruption like never before. Small and nimble competition is appearing on the market with smart products at amazing speed. Digital is key, and speed is of the essence. The management of ING Bank decided that the only way to stay ahead of competition was to go Agile – across the entire organization. And in doing so, they have become one of the first few traditional businesses to have adopted Agile inspired by the Spotify model. At the same time, ING decided to consolidate its IT sourcing in a co-sourcing and co-managing relationship with 3 strategic service providers.
On May 28th, we invited Rocky Woestenborghs who is Head of IT Advisory Products at ING Belgium and Netherlands and was at the forefront of this program to share his experience with us. Rocky leads a team of 700 highly skilled engineers across 3 countries. Supporting him was Alok Chaurasia, Cognizant’s Client Partner for ING during this journey. This web meeting was organized by CIONET and S-Square.
In parallel to the decision of going Agile, ING decided to restructure its IT Sourcing model. Staff augmentation with many providers evolved into strategic co-sourcing with 3 partners (Cognizant being one of the three). ING considers the external staff as “an extension of our IT organization”. It is not an outsourcing or managed services model, but a strategic co-sourcing model. The internal and external staff work as “one integrated team working within the ING Operating Model”. Currently, the IT team is 50% internal and 50% external. In a natural way, scope and platforms get assigned amongst the three providers.
The joint teams operate in the ING way of working: one method of working, one integrated way of measuring performance and one way of managing people. All internal and external staff get classified and grow in the same Dreyfus skill classification model.
This model creates transparency but also requires more from the service provider - ING expects all external resources to be at least at Competent (Level 3). This is different from the standard pyramid approach in a traditional model and requires the service provider to organize differently.
When working with the external partners, ING wanted access to talent and skills and the insights/ assets of global service providers. But at the same time it wanted cost efficiency. Leveraging Offshore was important and ING applies Distributed Agile. Currently, onshore / offshore ratio with the strategic partners is 50/50 with the offshore services being delivered from India. The intent is to further grow the offshore ratio. ING and its partners want an empowered offshore capability – they have offshore agile coaches, the next step being offshore proxy-Product Owners. A considerable travel budget was reserved to establish the working relationship with the offshore teams during the initial years. Each ING lead spent time in India working side by side with the offshore staff and like-wise having offshore staff working onsite on a rotation basis.
Alok gave his perspective on how to make such an offshore collaboration successful from a service provider point of view: besides the technology, infrastructure and governance (daily stand up calls) – what is more important is high level of trust, transparency and strong relationships at the individual and team level. Communicate and share the business goals, make sure that the service provider teams at offshore get the big picture and the ING staff works hand in hand with the offshore staff. That has resulted in a high level of ownership with the offshore teams that makes a positive difference - more outspoken, more pro-active, more engaged.
Rocky highlighted the energy and focus that has been put in to achieve this level of relationship: always stress the common purpose, strong governance and communication and strong focus on people management. Each strategic partner has an internal ING “sponsor” (to mediate, to create opportunities, etc.). There is executive level governance and long term commitment from ING towards the three strategic partners - both on the existing platforms and evolution to new platforms.
ING is a very good example of bringing the relationship with the service provider to a strategic level. Consolidation towards a strategic Co-Sourcing with selected partners that work under the client’s agile operating model is a clear trend within the Financial Services industry or others using Agile at scale. This is confirmed by the survey done during the webinar, the results of which you can see below. In other industries like consumer goods or industrial companies there is also a trend of supplier consolidation and strengthened collaboration, but its is more towards Managed Services rather than Co-Sourcing.