Outsourcing a Business Intelligence (BI) Program

Description
Outsourcing a Business Intelligence (BI) Program

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Outsourcing a BI program 1 TATA CONSULTANCY SERVICES

Outsourcing a Business Intelligence (BI) Program
Narayana Murthy, A.K. Balaji, Shreyas Sontakke
Abstract

Today ICT systems have evolved into a valuable means of creating, continuing and enhancing business value. As the world
economy witnesses increased liberalisation and expansion of global trade, corporate houses are expanding globally and
moving their manufacturing bases to cost-effective locations. ICT systems have enabled this transition, increasing the
overall competitive factor by integrating far flung supply chains and at the same time enhancing focus on customers. The
advent of internet technologies further catalysed these changes.
As a result of this, expenditure on ICT has shot up. Organisations today mandate their CIOs and ICT Directors to develop
innovative strategies to drive down costs without compromising on the returns. ICT Outsourcing is one such strategy
organizations are adopting to remain competitive and profitable.

Business Intelligence (BI) is a powerful business solution which is universally adopted by organisations to harness their
organisation wide data assets into meaningful and actionable business information by applying a standard set of tools,
technologies , processes and methodologies. BI initially started off as a tool for providing business information. Today it is
an integral part of every industry vertical with its ever increasing sophistication, criticality, functional richness and reach in
the organisation. BI applications cater to strategic, tactical and Operational levels of an organisation providing information
at near real time with 24x7 availability. Hence, Organisations are under pressure to deliver high quality, timely and
actionable information to the right users, at lower operational costs .These translate into key drivers for outsourcing their BI
program.

BI outsourcing is executed in a generic 3-phased approach which can be termed as 3T-Model i.e. Transition,
Transformation and Transfiguration. People, Process and Technology form the core operational drivers of t his model. The
key objective is to equip the outsourcing partner with the requisite knowledge to manage the BI program, identify the areas
of improvement and define a roadmap for future enhancements and up gradations of technology and process models. There
should be a well-defined monitoring mechanism and governance model should be in place for the success of the program.
A steering committee should act as pivotal pin in driving the entire program. . The scope of this paper is to examine the key
drivers for Outsourcing a BI program and touch upon the generic execution models of outsourcing, outline an approach to
outsource an entire BI program highlighting the challenges and steps to be taken for the sustenance of this program

Introduction

Environmental, organizational, and technological factors create a highly competitive business environment in which
customer is the focal point. Furthermore, these factors can change quickly, and at times in an unpredictable fashion.
Therefore, organisations need to react frequently, quickly and effectively to both the challenges and the opportunities
resulting from this new ever evolving business environment. Because of the pace of change and the degree of uncertainty in
today’s competitive business environment organisations are expected to operate under increasing pressures to maximise
productivity yet reduce costs .

Reacting to highly competitive global markets, organisations push for adaptation, innovation, and cost reduction while
stressing on achieving enhanced customer satisfaction/ retention. Today ICT is at the heart of efforts to promote and
achieve these goals . ICT underpins the operations of organisations to integrate far-flung supply chains, and increasingly
link their business processes with the customers’ needs. It has permeated manufacturing, wholesaling, retailing, and
business services. ICT today covers every aspect of the organisation from the personnel department to end-customers. ICT
is also a catalyst for fundamental changes in the structure, operations, and management of organizations and supports the
business objectives such as: improving productivity, reducing costs, improving decision making, enhancing customer
relationships and developing new strategic applications. ICT has evolved from a mere/one-off support function to critical
backbone system for business.
With ever increasing global free trade, making the world smaller in terms of market-reach, organisations are moving their
manufacturing facilities to cost effective locations. Hence dependency of business on ICT for sustaining and expanding

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business in the complex and diverse scenarios has grown enormously. The growth and advancement in internet
technologies have further catalysed this change and increased dependency of business on ICT.
As a result ICT costs have witnessed a sharp increase in recent years. Organisations now have to strive to innovate in
downsizing the ICT spending at the same time maximising the returns. Outsourcing is today being seen as an effective
solution to achieve cost benefits on ICT spending without compromising on the expected benefits.

Evolution of BI as critical business solution

Business Intelligence (BI) is a powerful business solution which leverages the existing organisation wide data assets to
produce meaningful and actionable business information by applying a standard and proven set of tools, technologies,
processes and methodologies. BI and EPM applications today are aggregating and summarizing large volumes of data
residing in various applications across the organisations to provide meaningful dashboards and scorecards which aid the
business decision-making process. Organizations are today using these applications to develop efficient strategies for
creating sustainable differentiators.
The last 2 decades up to the early nineties saw the implementation of data warehousing and BI applications with data
feeding the data warehouse from disparate custom-built legacy systems. BI tools were principally used as static reporting
tools . They were considered to be marginal technologies catering to senior management as decision-support systems. They
were expensive and considered niche products . The late 90’s saw the emergence of the term ‘Business Intelligence’. Since
then BI has become a business solution which enables organisations to gather, cleanse, integrate, store and distribute vital
business information.
With successful implementations of Operational Data Stores (ODS), Data Marts (DM) and Data warehouses across the
organisation, demand and usage of business information from these applications grew, leading to the development of tools
and technologies for building:
- Dashboards,
- Scorecards
- Advanced Data visualization applications
- Problem specific mathematical models and analytics

BI applications today cater to the information needs at three distinct levels in an organisation:
- Operational
- Tactical
- Strategic

With an increasing need to narrow the gap between strategizing and implementation there is a growing demand for BI
applications to provide information in near real t ime. BI usage in Logistics department of Retail business is an example of
critical systems requiring 24x7 availability.

Key Drivers for Outsourcing BI Programs

With the evolution of BI as a business critical application, business users started demanding a 24x7 availability of these
applications. Applications have to operate under stringent service level agreements (SLAs) to:
- Provide high quality of data at lower operating costs ;
- fulfil complex business demands;
- within minimum possible response time

Apart from the above demands and expectations from business, ICT teams also have to address the following challenges:
- Increasing and varying business requirements due to market environment, reorganisations etc.
- Lack of consensus on organisation wide standards and guidelines
- High total cost of ownership, lack of availability and skills
- Lack of agility to adapt to the changing business needs
- Increase time to market thereby losing the competitive edge

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All these can be translated into key drivers for outsourcing as mentioned in figure 1.

BI Outsourcing Models

Organisations are initially hesitant to outsource their BI applications because of the critical and sensitive nature of the data.
The complexity of these applications which span out across different geographies can prove to be a deterrent factor for
outsourcing. There are diverse generic execution models which the customer organisation can choose from, when realising
their outsourcing program.
TCS is successfully managing various
outsourced BI programs with its Global
network delivery models.
Adjacent figure 2 depicts the various
models to be chosen depending upon
the scenario which fits to a given BI
program.

1
THE TCS “GLOBAL NETWORK DELIVERY MODEL”
The Network Delivery Model offers a full range of servicing profiles: from task-
specific partnership to “factory”-like scale.
• High Scale
• Broad range of skills
• Full range of capabilities
• Servicing all types of clients
• Highly Mature
• Medium Scale
• Localized Services
• Servicing all types of clients
• Selected capabilities
• Very Small Scale
• Focused Services
• Typically single client focus
Luxembourg
Peterborough
Phoenix
Morbio
Figure 2 : TCS GLOBAL NETWORK DELIVERY MODEL

Round the
clock
Support
Competency
Program
Rapid
Development
&
Deployment
Reduced
TCO
Skill
Availability
& Scale
Comprehensi
ve
Knowledge
Base
Proven
Methodology
Standardized
Delivery
Framework
Key Drivers
Figure 1: Keydrivers of Outsourcing

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BI Outsourcing Approach – 3T Model.
The process of Outsourcing BI programs can be broadly explained as a 3-stage process which we depict in a ‘3-T
Model ’ described in Figure 3. The 3-T model constitutes 3 distinct stages in the BI outsourcing process which are:
Transition, Transformation and Transfiguration. People, Process and Technology form the core operational drivers
of the 3-T model. This model is derived from the TCS proprietary BIDS
TM
Methodology which is being followed
in all its BI outsourcing solutions. BIDS
TM
leverages the TCS Networking delivery models like Onsite, /Onsite-
Offshore, Onsite-nearshore -offshore, etc in implementing the outsourcing solutions. The methodology and approach
to outsource multi-geography and multi-business domains will be dealt in a sequel to this paper. The success of the
entire BI outsourcing program depends upon how these three factors are addressed.

Approach and Governance model for Outsourcing program:

In any BI program there will be multiple projects/Initiatives which will be at various stages in the project life cycle and will
accordingly need a different approach. At a broad level these projects can be classified as follows:
• Steady state projects (will primarily require App. Maintenance & Support)
• In-flight projects (need to identify suitable check points for outsourcing)
• Take off projects (projects which are in the initiated phase and can are most suitable candidates for outsourcing in
the initial phases)

Robust and effective governance and monitoring framework is essential for the success of the outsourcing progam. At the
start of the outsourcing program, a steering committee should be formed which oversees the overall program. This should
consist of management representatives from both the outsourcing partner and the customer organisation. This should also
constitute an executive sponsor from the customer organisation. A Program manager with a strong BI background should
work closely with the steering Committee to define the future BI roadmap for the organisation. This roadmap should
clearly articulate the vision and high level implementation plan for outsourcing the BI program. Steering committee should
form a governance team clear roles and responsibilities to monitor and drive the transition, transformation and
Transfiguration phases of the outsourcing program.
Governance team should define and follow
clear process framework which will drive the
outsourcing program through the different
phases of the adopted model (3T model).The
various phases in the 3T Model are as
follows.

Phase I: Transition

The principal objectives of this phase can be
stated as:
• To develop expertise (functional and
process) in the applications
• To finalize the standards and procedures
for the maintenance phase, including
change management
• To evaluate the understanding and
demonstrate the capabilities of
outsourcing partner.
• To define and fine tune the governance model for the outsourcing program
• To ensure the suitability and validity of the execution model with the envisaged vision and objectives of the BI
outsourcing initiative
-
Figure3: Outsourcing – 3T Model
P
ro
c
e
s
s
P
e
o
p
le
Steady
State
Engagement
Framework definition
Operational
Influencers
Outsourcing
phases
Knowledge
Transfer
Primary
Support
Secondary
Support
Technology

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Step I: Engagement Framework definition:
At the start of the transition phase, the schedule of meetings to be held with the SME’s and IT experts is drawn out, based
on the transition plan
This foundation step focuses on analyzing the existing BI applications in terms of functional areas they cater to, the
technology stack, standards and processes followed for maintenance of these applications and relevant skill sets of the
existing team. The emphasis is on capturing the ‘AS IS’ Business and IT processes of the BI applications. Future roadmap
of BI applications should be reviewed and validated by the outsourcing partner if they are already present. If not, the
outsourcing partner will have to be identified during this step. The Operational influencers and the key deliverables of this
phase are described in the figure 4 and figure 5.

Step I I : Knowledge Transition:
The objective of this phase is to acquire adequate and detailed application-specific knowledge to enable the new team to
provide production support and maintenance. This phase will involve the transition of the BI applications, the associated
Software and Hardware environments and existing maintenance standards and processes. The outsourcing Steering
committee/ governance team should review the understanding of the new team through the following
- Exit tests/mock tests of the outgoing team
- Play back sessions where the incoming team demonstrates their current understanding through
presentations workshops etc.
- Review the transition documentation prepared by t he new team.
Key deliverables from this step and t he operational influencers are as shown in figures 4 and 5 respectively.

Phase II: Transformation:
Step I I I : Secondary Support
As a first step towards the takeover of the support process, subsequent to the knowledge acquisition, the project team will
obtain hands-on experience on the application maintenance processes by working along with the existing team. This step
enables the new team to get acquainted with the AS-IS processes and procedures. This step will give the required
confidence to all the stake holders about the capability and domain knowledge of the new team as well as effective
transition of the knowledge base.
The outsourcing Steering committee/governance team should assess the understanding of the new team based on:
- Feedback from Outgoing consultants
- Evaluation of the deliverables
- Support levels (in the new step-up)
- Number of escalations during this period.

Step I V: Primary Support
Once the new team meet the ‘crossover criteria’ in the secondary support, it should step up as the primary support with the
outgoing team lending the secondary support. At this stage, the new team should address the service requests directly. The
outgoing team should monitor and review the new team’s operations. During this phase the recommendations and process
improvements suggested by the outgoing team and other stakeholders, should be validated and agreed upon by the
incoming team. These inputs coupled with a workshop of all stakeholders should enable the new team to achieve an
organisation wide consensus on the future roadmap. The artefacts and the key operational drivers for this step are depicted
in figure 4 and figure 5.

Phase III: Transfiguration
Step IV: Steady State
Once the new team passes through Transition and Transformation phases , it transfigures itself into a new SLA based
operational environment. These SLAs should be arbitrated between the business, ICT and outsourcing partner at the
initiation of this phase. This is the steady state or regular maintenance phase of the BI systems. This phase focuses on the
activities and processes required for maintaining the existing BI applications (Fig 4).

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A well-defined governance model and clear communication processes are the key operational drivers for the success and
continuance of this phase as well as the outsourcing program thereof (Fig 5).

Monitoring and Governance for the Transfiguration Phase:
Once the organisation passes through the phases of transition and transformation, project team transfigures itself into a new
SLA-driven operational environment. A well-defined governance model should be put in place with the roles and
responsibilities clearly defined and documented for the success and sustenance of this Program. A clear communication
mechanism should also be in place.

Communication processes
Frequent/Periodical teleconferencing with the team at Onsite/Nearshore/Offshore should be conducted to monitor new
developments and the progress.
- Weekly status reports from the Outsourcing partner to the steering committee.
- Periodical dashboards
- Sharing of all defects and issues found at onsite and offshore.
- Teleconferences and/or videoconferences between the teams to discuss and resolve open issues.
- Regular knowledge sharing sessions via teleconferences and workshops
- Single point of contact at onsite/nearshore/offshore.

Monthly steering committee meetings should be conducted to evaluate the progress and discuss new engagements in the BI
Program.

Key Considerations in Outsourcing BI Programs.
Any model or solution comes with its own advantages and challenges. The success of the model depends upon how
effectively the advantages are maximised and the challenges are addressed.

Partner Selection Parameters:
Technical, domain and program management competencies of the outsourcing partner are one of the key considerations
organizations need to address while choosing their outsourcing partner. It is imperative that the chosen partner has the
requisite skills and previous experience to successfully manage such a program to achieve the desired objectives of the
outsourcing initiative.

Likewise, if the evaluation of the outsourcing partner is not done in a holistic perspective, taking into account features
unique to that particular organisation, the entire program may result in sub-optimal benefits. The outsourcing partner may
fail to deliver the goods as envisaged and mutually agreed upon. Hence organisations should evaluate the suitability of their
outsourcing partner by considering the following parameters:
- Domain/Business expertise (Functional knowledge)
- Capability to scale up and down the team as per the requirement (flexibility)
- Capability and Maturity of the processes followed (approach, experience and rigor)
- Security assurances (Both physical and data security)
- Commitment by the supplier
Transition
Peopl e
üSystem study
üProfile of maintenance team
üDemonstrate the capabilities
üTo meet the cross-over criteria
üForm steering committee
üDefine Transition Governance model
Process
üStudy of the Business processes,
üMaintenance operational processes
üEscalation mechanism
üAS-IS Review
Technology
üStudy of the Tools used,
üIdentification of software upgrades
üAS-IS review
Operational Drivers
BI Outsourcing
Transformation
People
ü Incoming consultants to do
üSecondary&Primary support
üTo meet the cross-over cri teri a
Process
üFinalise the maintenance process
üEscalation mechanism
üFi ne-tune/update the BI roadmap
Technology
üIdentification of software reqmnts
üUpdate the Technology&
Performance Improvement roadmap
üEstablish network connectivity
between Offshore& Onsite
ü(If applicable
Transfiguration
Peopl e
üTrained consultants
üNew Governance model
üPlan the implementation of
technology and Process roadmap
Process
üFine tuned Operational processes,
üPreventive, Proactive reactive
maintenance
üDefined and fine tuned SLAs,
üDefined and fine tuned escalation
mechanism
üDefined Communication model
üTechnology
üIdentified Software upgrades
üPlan the implementation of defined
roadmap
Figure 5: Operational drivers in 3T Model

Knowledge
Transfer
Secondary
Support
Primary
Support
Steady State
Highpriority
fixes without
escalation
Playback
Presentation
Updated
ProgramPlan
Updated AS-IS
Document
Updated
Maintenance
Manual
Updated
Process and
Technology
Road map
Fixes
Change Request
Enhancement
Status Reports
Implementation
plan of the
defined road
map
ProgramPlan
Document
Architecture
AS-IS BI
Document
Process and
Technology
Road map
Knowledge
Transition
Doc.
Engagement
Framework
Definition
Low priority
fixes without
escalation
Maintenance
Manual
Updated
Process and
Technology
Road map
Figure 4: Deliverables in the 3T model

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These can be evaluated with the certifications the suppliers have achieved like BS779 certifications for Security and CMM
for process maturity, client references as well as on the basis of site visits. The success of the program lies predominantly in
the selection of the partner according to the unique needs of the organisation and the capabilities of the outsourcing partner.

Security:
A business intelligence (BI) solution across industry verticals, manages business critical data sourced from across the
organisation. The prime deterrent for organisations in partnering with an outsourcing partner for maintaining and enhancing
the BI solution is concerns on data security, especially when outsourcing to an external location. Organisations fear for the
security of their critical data leading to erosion of their competitive edge, and rightly so. Security considerations can be
classified as Physical, Network and Data. Risk and their mitigation strategies are described as below.

Physical Security (of Offshore Location)
Apprehensions regarding physical security at offshore development centres (ODC) is one of the key deterrents for
organisation considering outsourcing. A dedicated offshore development centre, with all possible physical security
measures and completely governed by the customer’s security standards and policies can be set up. This ensures that
security is maintained to the satisfaction of the client. Another option is for organisations to demand that the Outsourcing
partner get their offshore locations to be certified by independent international bodies or consortiums , for example like the
one that develops security regulations and models like BS779 etc.

Network Security
Another key security concern for the outsourcing organisations is Network securit y. The outsourcing partner should ensure
that the entire network is safe from malicious attacks and network failures. Outsourcing partner should take adequate
measures like Data encryption, implementation of comprehensive anti-virus policies for the network security.
Comprehensive Back up and Disaster recovery plans should be in place.

Data Security
Organisations expect their outsourcing partners to provide a robust and effective security model which will govern all the
development centres (DCs) involved in the outsourcing initiative (Fig 6). Organisations should also insist on a competent
authority to conduct a periodic assessment of this model to ensure on-going effectiveness. This would ensure that the work
carried out at offshore locations is not only secured with respect to data and software, but also with respect to hardware and
general security measures.
Use of dummy data
Hypothetical data can be used for all development and testing activities before the role out (Refer Fig 7). Once rolled
out, the support activities can be moved to the onsite location. This is usually time-consuming and requiring close co-
ordination from the organisation and the outsourcing partner to produce real life test data.
Restricted Production access:
Access to the live or production data should be restricted to only a few members in the maintenance and development
team.
The above considerations can be used in isolation from each other or together, thus forming a strong security
framework.

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O
D
C
Security
Model
SecurityPerimeter
D
um
m
y
D
a
ta
Security
Core
Figure 6 : Data Security

Figure 7: Security measures in Development
Usage of Live Production
data at Onsite location
Usage of past and skewed
Production data in
Acceptance environments
Usage of dummy data for
testing at Offshore
(development environments)
Contractual Trust
Competence Trust
Goodwill Trust

Organisational, Social/Cultural and Linguistic Considerations:
A global, multi-geography BI implementation and its support may result in diverse cultural challenges and
differentia l reporting requirements while working in different time zones.
Organisational Considerations:
• Geographical location of the outsourcing partner: If the offshore location is prone to frequent civil strife or
military escalations, this produces a serious ris k for the continuity of the IT services to the business, hence
while selecting the offshore locations the political and geographical factors should be suitably studied and
organisations should demand a foolproof Disaster Recovery (DR) and Business Continuity plans from the
Outsourcing provider.
• Social /Cultural Considerations
§ Cultural differences (Organisational, social and geographical) between the outsourcing partner and organisation
provide a serious deterrent for the success of the outsourcing program.
This should be addressed both by the outsourcing partner and Organisation by:
§ Organising workshops which disseminates the information about each other’s culture and sensitivities
§ Organising training or cultural forums appraising each other’s dining, social etiquette etc.
§ Encouraging free communication between the both parties , promotion of team-spirit solves more than
95% of these issues.
§ Resistance to change: organisation should communicate and be transparent to its employees when
starting the process of outsourcing especially when it involves job losses, and changes in roles.
§ Business users and employees should be apprised about the outsourcing partner and involvement of foreign
consultants (generally the case in case of off shoring). We have even encountered instances of end-users
delet ing emails from foreign consultants as spam.
§ Implementation of Structured SLA approach.
§ When the BI/IT is in-house, consultants are used to working informally with few documented procedures or
SLAs. But when outsourcing is introduced there will be a more structured SLA -based approach which may
lead to irritation between the outsourcing partner and the employees or business users.
§ Organisation should be transparent and educate the concerned stake-holders on the business p rocesses and
the roles and responsibilities towards SLA compliance both by the outsourcing partner and the employees.
Ling uistic Considerations
§ Language forms another major barrier especially in European countries where the official language of
communication is other than English.
§ Both Organisation and Outsourcing partner have to address this by training their consultants in the language
that has been accepted as the primary means of communication.

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Conclusion

Highly competitive global markets, organisations’ push for adaptation, innovation, and cost reduction on ICT
systems lead to Outsourcing as an effective solution for BI program. The ever increasing demand on BI applications
for high quality data at lower operational costs and evolution of BI into a critical business solution has necessitated
organisations to outsource their BI programs . The 3T model is a suggested process framework which Organisations
can adopt while outsourcing their BI programs. 3T model is derived from TCS’ BIDS™ BI program management
methodology. 3T Model comprises of Transition (which involves the knowledge transition of the existing systems),
Transformation (which involves the initiation and completion of the handover of the BI systems), Transfiguration
(which includes achieving the steady state and enabling future growth).The key considerations while outsourcing
their BI programs are selecting an appropriate BI partner, Security aspects ( Physical, network and data) and
organisational, social/cultural and linguistic challenges.

Every model or solution comes with its own risks, the implementation success lies in how effectively the challenges are
addressed and the benefits are maximised. Outsourcing BI program can help organisations achieve significant cost savings
as well as giving them an inherent flexibility in managing the program coupled with a ready availability of requisite skills.
The organisation will achieve an overall reduction in TCO and improved ROI. Despite some challenges, we have seen BI
to be a definite candidate for outsourcing. The outsourcing of BI program is a global and proven concept across industry
verticals. Organisations which have adopted flexible and applicable process frameworks have benefited enormously from
such initiatives. It is important to select the right outsourcing paper where the customer organisation and outsourcing
partner need to work closely as one team. The overall approach should be to “Think Big” and transit in steps and
subsequently build a steady acceleration in the overall outsourcing next paper will present how to outsource and Manage BI
programs on a global scale and

Disclaimer

The contents of this paper present the personal views based upon the experience of the authors while executing and
managing outsourced BI Program.

Authors would like to thank Mr. Shirish Kulkarni (Europe BI Practice head for TCS) for his valuable input in shaping the
article.

About the Authors

Narayana Murthy,
Narayana Murthy holds a Masters degree in Computer Aided design and Manufacturing. He has been with Tata
Consultancy Services for over 6 year leading and implementing the BI Outsourcing solutions across various
business domains of Manufacturing, Banking and Retail. Currently he is leading one such implementation in
Europe.

AK Ba laji

AK Balaji holds a Bachelor of engineering degree in Computer Science. He has been with Tata Consultancy Services for
over 10 years. He has wide experience and knowledge in Data Warehousing. He has been driving BI outsourcing solutions
across various business domains of Airline and Retail in the past 5 years.

Shreyas Sontakke

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Shreyas Sontakke holds a Masters degree in Management and Bachelors in Electrical Engineering with over 7 years of
experience in software development at Tata Consultancy Services. Over half of this period was spent on major projects in
the Retail Data Warehousing area, involving BI Outsourcing with American and European organizations.
.

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