Vestas Services Philippines, Inc.

Establishing Application Services in Manila, Philippines

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About Vestas History

1898:Blacksmith H.S.

Hansen arrives in Lem

1945:VEstjysk STaalteknik

A/S becomes VESTAS

1979:

First turbine after

agricultural vehicles, etc.

1987:

Vestas

Wind Systems A/S

1991:

Turbine no. 1,000

2004:

Merger: NEG

Micon & Vestas

2005:

Ditlev Engel, CEO

2010:

Wind. It means

the world to us.

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About Vestas Vestas at a glance

Today, we have installed over 46,000 turbines in

69 countries around the world.

Vestas’ track record >>

A truly global IT organisation

Almost 650 employees world-wide (about 25% in Global Shared Service Centre)

4 main HUBs: Denmark, Manila, Portland, Singapore

Represented at more than 40 different locations

• 49% Denmark

• 25% Manila

• 1,6% Singapore

• 6% USA

• 18% other (incl. Singapore 2%)

• - 30 different nationalities

Gender segregation:

• Male employees: 76%

• Female employees: 24%

• Male leaders: 74%

• Female leaders: 26%

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Agenda

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1. Strategic decision

2. Manila

3. Initial build up and consolidation of operations

4. Build up of Application Services development

capabilities

5. Lessons identified

Content of presentation:

Agenda

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1. Strategic decision

2. Manila

3. Initial build up and consolidation of operations

4. Build up of Application Services development

capabilities

5. Lessons identified

Content of presentation:

Strategic decision

November 2009 – Introduction of plan – build – run terminology in Group IT

200 additional employees needed during 2010 – majority in Q1

Decision to pursue low cost sourcing countries for fast and inexpensive ramp-up

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Background

Strategic decision

Analysis of options:

Vestas decided to establish a captive IT center in order to remain in control of technologies, knowledge, employees

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Background

Offshore Outsourcing Internal Offshoring

Advantages

Cost saving Cost saving

Access to better and always improving

technologies

Process control remains in-house

Ability to benchmark to industry

standards

Process and solution knowledge remains with

the organization

Demand management Employee retention – talent management

Limitations

Less transparency Higher cost compared to outsourcing

Relationship becomes crucial to long

term success

Demand management

No direct control over resources Lack of internal motivation for being successful

IPR Communication and R&R

Offshore Outsourcing Internal Offshoring

Advantages

Cost saving Cost saving

Access to better and always improving

technologies

Process control remains in-house

Ability to benchmark to industry

standards

Process and solution knowledge remains with

the organization

Demand management Employee retention – talent management

Limitations

Less transparency Higher cost compared to outsourcing

Relationship becomes crucial to long

term success

Demand management

No direct control over resources Lack of internal motivation for being successful

IPR Communication and R&R

Strategic decision

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Selection process

Strategic decision

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Countries in scope

Agenda

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1. Strategic decision

2. Manila

3. Initial build up and consolidation of operations

4. Build up of Application Services development

capabilities

5. Lessons identified

Content of presentation:

Manila

103 million people live in the Philippines – 12 million in Metro Manila

80 million mobile phones in use, 6.7 million land lines

Highly influenced by Spanish and American culture

Primarily Christian (Catholic) population (92%)

Political unrest in the Southern provinces around Mindanao and the Sulu sea – not influencing operations in Metro Manila

Natural disasters occur, but is only influencing operations rarely

Time zone is GMT +7

Makati City (Vestas location) is one of the main business districts in Manila

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Some facts

Agenda

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1. Strategic decision

2. Manila

3. Initial build up and consolidation of

operations

4. Build up of Application Services development

capabilities

5. Lessons identified

Content of presentation:

Initial build-up and consolidation of operations (1)

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Overview of events

Nov 2009

• Analysis and selection

Dec 2009 - Jan 2010

• Implementa-tion

• Legal entity

• Initial recruitment

Feb –Dec 2010

• Build-up

Jan 2011

• Build-up and maturing

Q1

• ITSC

• ITOC

• XA Operations

Q2

• Server support

• Network support

• SAP support

Q3

• Microsoft development

• SAP development

Q4

• Global responsibility for ITSC and ITOC moved to Manila

Agenda

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1. Strategic decision

2. Manila

3. Initial build up and consolidation of operations

4. Build-up of Application Services

development capabilities

5. Lessons identified

Content of presentation:

Build-up of Application Services development capabilities

Critical factors to be considered:

Internal bias

Creation of success stories in order to demonstrate capability and potential

Process adherence (in order to succeed with distributed software development – DSD)

Knowledge transfer

Advantageous in captive centers compared to offshore outsourcing

Allocation of funds and time

Time and patience

Talent retention

Paramount to be able to retain talents in captive center as well as in main center in order to

succeed with above key factors

Target/Drivers

To establish the Manila office as a development hub

To utilize existing management structure in order to avoid additional overhead16

Internal offshoring

Build-up of Application Services development capabilities

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How to work – Distributed Software Development model – Virtual teams

Minimum requirements:

Effective communication between project

members

Virtual Co-location tool to enable

knowledge sharing, code sharing etc.

Full compliance with a consistent process

Agenda

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1. Strategic decision

2. Manila

3. Initial build up and consolidation of operations

4. Build-up of Application Services development

capabilities

5. Lessons identified

Content of presentation:

Lessons identified

DK:

Change management in DK need to be carefully planned and executed. PH can easily be seen as a treat to employees.

Virtual line management not to be underestimated.

Establish of Host Management concept

Get the right tools, Telepresence, Video conference and OCS.

Equal treatment, no A and B-team. Invest equally in teams.

Be open with your ambitions, there is nothing to hide.

Allocate your “best” man to be on site, good signal both in DK and PH.

PH:

Start with the low-hanging fruits.

Most skill sets are available in the market

Basic requirements are in place for Application Services to establish hub

Internal referral can be used but all applicants need to be screened carefully

The lack of local management can pose a risk in terms of efficiency but will add overhead

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Lessons identified cont.

PH:

Remain in control, but do it with cultural understanding.

Try to measure efficiency, closed ticket, OSS etc.

Tight contact via local DK-manager to Danish Mngt team.

Start to network with other foreign companies, lot’s to gain/learn.

Develop business continuously via local externals etc, don’t be satisfied there are more to do.

Watch out, the recruitment approach/process is different!!!

Get yourself a local partner, it will prevent you from mistakes.

Misc:

Need for collaboration tools in order to successfully establish virtual teams

Application Services presence in Manila can potentially improve the SIM process

Strong Process adherence is key

DSD model must be considered in relation to PEM

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Thank you for your attention

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