The entry of Menorah, one of the largest insurance companies in Israel, into the pension market has created a surge in demand for BI services from the company's IT department. Matrix Global has created an offshore Business Intelligence (BI) delivery team that provides high quality information at a lower cost. Menorah was established in 1935 and has remained a central player in the Israeli insurance market. In 2008, Menorah was the fifth largest insurance company in Israel in both revenue and assets. The acquisition of Mivtachim has turned it into the leading pension fund with over $5.3 billion in assets. Revenue from insurance is $924 million and from pension funds another $713 million. During 2007, Menorah continued with M&A activity acquiring a mid-sized insurance company and a large insurance agency. The entry of Menorah into the pension market has created a surge in demand for services from the company's IT department. Integration of core systems together with a huge increase in BI reports required by business managers, clients, and regulators has created a delivery problem for the BI development team in particular. Annual report demand soon rose to 150 different reports covering a wide variety of business parameters. The Menorah Mivtachim experience is a case in point. The need to limit contract headcount and focus internal BI developer resources on core business innovation was the main business benefit. Menorah Mivatchim resolved management and QA issues by employing onsite experienced team leaders. This coincides with what is widely perceived as a best practice in offshoring, namely the hybrid development environment. This approach means that some key staff are sourced from within the organization - as in Menorah's case - to manage projects and act as business analysts liaising with the companies LOB project owners. Although this reduces labor cost savings, but it increases deliverable quality and the communications between business, IT management, and the offshore vendor. Proportions of internal personnel relative to offshore team range from 10% to 25% depending on the project lifecycle and development subject matter. These proportions are also evident in Menorah's experience. While technical issues such as communications and security are more easily resolved, offshore staff quality is much more difficult to manage. Issues such as turnover, skills, and training are critical to the success of the service. Menorah's experience with previous contract labor was approximately a 2-year turnover rate, which was deemed as too fast for a plausible development strategy creating heavy demands in terms of training and learning curve expense. The ability of Matrix Global to provide a stable team complete with in-house advanced training capabilities significantly increased the attractiveness of the service for Menorah.

About the author

Co-Authored by Ziv Mandl, CEO and founder of Matrix Global. Under his leadership, Matrix Global has grown in a few years to become a major development center Software Outsourcing and serving clients in a wide range of technologies like SAP BI and ETL testing.