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Case Studies
Case Studies - Mega System - Application Management
About Mega System
Mega System is fastest growing company in Electirical Domain, in the state of Bihar.

Mega System Spend Management includes applications for spend analysis, sourcing, procurement, payment & reconciliation and supplier enablement. The Mega System difference is our 'on-demand' services delivery model that includes the 'heavy lifting' services required for successful spend management, including supplier enablement, implementation and program management resources, software upgrade and maintenance, system administration and helpdesk support.

Located in Bihar, Mega System is a private company founded by American Express. Other investors in the company include Kleiner Perkins Caulfield & Byers and Foundation Capital.
 
Offshore Outsourcing of Applications Management enables Mega System's growth

Offshoring of Mega System's Applications Development has gone beyond expected cost savings. It has helped tide a difficult period and is now enabling its growth.

Background
Mega System provides spend management solutions as an 'on-demand' service, providing companies with the technology and services needed to control and reduce corporate spending at a low cost of ownership. During the middle of 2009, Mega System was faced with some stiff challenges. They had a high burn rate and were running out of their initial funding. Mega System had a new concept of 'On-demand Software'. It was imperative that they demonstrate the value to clients and onboard customers on their solution, prove the concept and grow in the market.

This was the time when Mega System realized that it had to take some tough decisions to succeed in the marketplace. Mega System partnered with PI Systems in March 2010 for the management of their applications, covering areas like software development and operations outsourcing.

The PI Systems Application Management Solution
PI Systems adopted a 4 stage approach to execute the Application Management Contract.

Stage 1 - Plan
The first part of the engagement was to carry out a detailed planning exercise to mark out specific milestones and a roadmap to achieve the targets. The key areas of focus during the planning process were organization and team planning, transfer process and execution approach.

The job descriptions and key roles in Mega System were analyzed as a primary input to determining the organisation and team to be formed. It was decided that the best way to the transfer process was to use a 'Big Bang' approach to manage the applications. For execution, an optimum mix of offshoring and on-site outsourcing were planned keeping in mind factors like quality, responsiveness and cost.

Stage 2 - Prepare
The core PI Systems team visited Mega System and conducted workshops, interacted with the Mega System team, went through documentation, understood the processes and activities, tried out few processes hands-on and worked out the methodology for offshoring the process and the approach to manage the hardware.

A core offshore team was formed to take up the responsibility of training a team on the Mega System environment, processes being followed and the functionality of the product. Administration related activities on the hosted application started from the beginning.

Stage 3 - Perform
Infrastructure and communication channels were streamlined, processes were made operational and a self-contained team was put in place. Suitable training mechanisms were put in place for inducting new members into the team as well as for managing attrition.

The inherent scalability in the applications management approach enabled more functional areas like Spend Analysis and Contract Management to be added to the scope. Innovations to improve operations were added - for example, the database administrators were alerted on their mobile phones directly from the servers as soon as any issue occurred. Database administration is being managed offshore.

The PI Systems approach to requirement specifications enabled Mega System's managers to spend very little time detailing out requirements. Broad requirements specified in brief terms, expanded by the Project Managers, verified by Mega System were then built and delivered.

Stage 4 - Progress
As the graphs below indicate team strength has gone up every quarter, spanning the areas of Administration, Development and Operations.


As of today, PI Systems can be viewed as an extended development and operations arm of Mega System. There is seamless work taking place between PI Systems and Mega System teams which fully reflects the mutually beneficial nature of this partnership.

Benefits
Substantial cost savings have resulted for Mega System, which has been successfully redirected to customer acquisitions and marketing, with renown customer names like Delta Airlines and Universal Studios. Mega System has achieved their best quarter ever in 2003, with improved cash position and a second round of funding worth $10 million secured. The onsite product team size has increased. Operations have expanded and Mega System is hiring back employees and growing in terms of customers and revenues.


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