Some summer sourcing soundbites

August 11, 2008 | Phil Fersht

Outsourcers Hone European Savvy:  Niraj Sheth, of the WSJ, comes up with some compelling examples of how the leading Indian outsourcers are training their staff to understand European business etiquette.  With a weak dollar and tight economy, the offshore leaders are increasing their focus in the high-cost European countries, where expensive currencies, high wages and a challenging economic climate are driving outsourcing to the top of the agenda.  However, it's not quite as simple as adding americanisms to English...

Carl, a German customer, gave Indian programmer Koshal vague instructions to get a report done by the end of the month. Koshal, expecting to receive more details -- such as what the report should cover, what method to use in his analysis -- and a firmer deadline than "the end of the month," didn't deliver on time.

A programmer attending the class defended Koshal, arguing Carl should have sent out a reminder, as would have been customary in India.

"Why would Carl have to remind anyone?" replied Ms. Ashok. "He doesn't have to. He's German."

China: Low Cost No More: Jason Busch (pictured here) picks up on some recent examples as to why Jason BuschChina is no longer a low-cost provider and is rapidly moving up the manufacturing food chain.

Foxconn will be opening new factories in low-cost markets like Hungary and India to reduce the pressure caused by cost increases

(I assure readers that Jason is far more of a corporate hippy than this picture suggests)

(Sarcastic News Flash) Public Sector HR Needs to be More Strategic:  Mark Stelzner offers a hilarious viewpoint on some new research into the woes of public sector HR.  Maybe Lockeed Martin has the answer? (said without a hint of sarcasm).

The Top 10 Problems with Outsourcing Implementation (And How to Overcome them) : Over on the excellent Shared Services and Outsourcing Network (SSON), Shawn McCray of TPI comes up with some spot-on reasons as to why so many outsourcing engagaments hit the skids:

Clients tend to put off making decisions about the retained/governance team for multiple reasons, including:

  • All energies and efforts are focused on “the deal” in terms of contract terms, conditions, and pricing, with no time/resources devoted to post-contract issues.
  • Clients may postpone making staffing decisions and communicating changes until they are sure about the final outcome of the outsourcing agreement.
  • Clients expect that since they are outsourcing the work, the service provider will take care of everything and the client can “wash its hands” of ongoing management responsibilities, resulting in a lack of governance staff.

Shawn - we can bleat these lessons until the cows come home, but will they listen?  But thanks for pounding-out the common sense...

Outsourcing the Offshore Operations : Businessweek's Steve Hamm has become the mainstream business media's authority on outsourcing over the last couple of years and articulates well the movement away from captives in this article. Nothing new to many of us here, but he articulates to a mainstream audience why it no longer makes a lot of sense for many firms to continue to invest in their own offshore operations:

There has been a steady drumbeat of similar large deals in recent years, but industry executives and analysts say the pace is quickening—driven by currency swings, the increased costs of doing business in India, and the need for some Western financial services to raise cash to handle shortfalls elsewhere.

Steve is currently finishing up a global tour - you can access his travel blog here.  Well worth reading.

 

 

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesIT Outsourcing / IT Services

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