Eye on Offshoring: Assessing the Suppliers

Scott Warren, INS   Today’s Top Stories   or  Other Outsourcing Stories  

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June 13, 2005 (Computerworld) -- In my last article ["Eye on Offshoring: Aligning IT Strategy With the Business Strategy," QuickLink 54512], I addressed aligning IT's offshoring strategy with the business strategy. Once you've completed that step, it's time to start assessing the landscape for suppliers of offshore services. First-time offshorers will find this can be a bit of a daunting task, since the market is still developing, and the range and quality of choices is, at best, very broad and uneven. For this reason, I highly recommend that a supplier-independent consultant be tapped for assistance in this crucial process. Going it alone has many pitfalls not easily recognized by those new to this strategy, including the following:

• Perceived moral and ethical issues. A supplier-independent consultant looks solely at the business issues, not the moral and ethical issues associated with moving jobs offshore.
  
• Lack of global knowledge. Even multinational corporations with operations in hundreds of countries typically silo departments and/or business units geographically. Good supplier-independent consultants follow trends globally and aren't tied to any specific region of the world. They are just as knowledgeable of recent trends in the Czech Republic and Argentina as in India. This is beneficial when creating a country- and location-specific "domain model," which specifies technologies appropriate to that country/location.
  
• Focusing on existing suppliers. Companies sometimes form a comfort level with existing suppliers and try to fit them into opportunities that aren't really a good fit. Worse yet, to get the business, the supplier allows this to happen. Supplier-independent consultants will take existing relationships into consideration but will look objectively for the best business fit. In addition, because of their breadth of experience, they are knowledgeable of all key players and their business models.
  
• Limited understanding of cultural implications. Americans, excepting those who have traveled extensively, tend to be a bit isolated from the world outside their borders. A consultant specializing in offshoring has worked in many cultures and can guide U.S. companies through the morass of what to do, how to do it and, most importantly, how to fix it when a cultural faux pas occurs (and it will). Working in a culture where "yes" can actually mean "no" or "maybe" requires skills that are foreign to most Americans.
  
• Little knowledge of governmental regulation and process. A global consultant will have knowledge of the governmental processes in the locations where offshore services are to be deployed. This is most helpful when dealing with government-run telecommunications carriers. When a government carrier brings 15 individuals to a meeting, identifying which person is the true decision-maker can be a difficult task, especially if they all are dressed in military uniforms. Here is a clue: It isn't always the oldest or highest-ranking person in the room.

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