Bringing jobs back home is a hot topic nowadays. While offshore is here to stay, no matter what, it certainly does not mean we should support any type and form of offshoring.

Going offshore to circumvent shortage of local talents, insufficient infrastructure, or to accompany International expansion is certainly very valid. It becomes highly debatable though when going offshore is only dictated by the search of maximizing corporate profit.

I recently read this (not so) funny post in the Chicago Tribune.

The article talks about an experiment by Jack-in-the-Box, the fast food chain, to offshore their drive thru order taking, likely to India, although the company’s spokeswoman declined to confirm the location.

Centralizing this process might make sense, but why offshore it?

These jobs do not require any advanced qualification and the positions could easily be filled in the USA. Locating the centralized team in a tier-2 or tier-3 US city would provide solid savings, and possibly enhance customer experience; taking the extra step and shipping everything to India looks like corporate greed.

I like free market, and fully agree that corporations should take all necessary (while prudent) steps to remain sound and profitable. However, being obsessed by short-term profit always lead to failure.

Just look at the current state of our economy in the USA. It says it all.

Remi
www.vsisoft.com

Business | 4 Comments »

A vast majority of SMBs are either contemplating offshoring part of their IT, or have already done so, often to India or China.

An outsourcing provider focusing on SMBs, I am always trying to refine our market segmentation.

I would classify SMBs looking to outsourcing their development / maintenance into 3 different categories, each of them yielding to very different results:

1. Companies in the first category (the largest one by far) are obsessed by paying the lowest price. I call them the Wal-Mart buyers: they want more for less. When a prospect belongs to the first category, I walk away from the deal, as a deal purely based on cost savings is set for failure. Interestingly enough, the bulk of outsourcing companies are fighting for these customers.

2. SMBs who fall in the second category are often first timers, therefore with a very limited experience of outsourcing. There are so afraid of potential failure that most of the time, they choose a supplier based on its apparent stability: the larger the better. The worst part of this choice is that a SMB is too small to be strategic for a large provider; [I elaborated on this risk last year].

   Being obsessed by the potential downside, they do not pay enough attention to the upside, an attitude yielding to mixed results at best.

3. Companies in the third category usually already have a solid experience of outsourcing, and make their decision based on a series of benefits they want to get from the operation. Unlike the companies of the second category, they want the highest upside possible, and will only work with suppliers that can guarantee their expectations will be met.

This last category is the one on which I focus my efforts; the risk of failure is extremely low, since expectations have been clearly stated at the beginning. In addition, and that is the icing on the cake, there is little competition on these accounts since a very few outsourcing companies are in fact able to demonstrate their ability to deliver.

These customers are fun to work with; the employees assigned to these projects are very loyal and will do whatever it takes to make these projects a success, no need to ask and/or push.

Remi
www.outsourcing-vsc.com

Business | 7 Comments »