The distribution of power in outsourcing era is changing
Filed in archive Point of view on May 21, 2007
Large organizations are now used to outsource all their IT needs to an integrated IT service providers. The conventional success trick of "Outsource non-core and Focus on core" is now a commodity statement and giants like Accenture, EDS and IBM have grown dramatically as a result of this trend but something else is going on in China which is changing the outsourcing scene little by little.
The reason lies in the relative portability of IT services compared to 10 years ago. Now that companies find it easier to switch to companies in India and Singapore so why shouldn't they? And as a result many European and American service providers find their high-value contracts broken pretty easily.
Logical Conclusion: In order to survive against the wave of Asian outsourcing services, Innovation is the key. Cost is not the only motivation for outsourcing; companies will also need innovation in the processes and enhanced learning. This is usually possible through high investment in new technologies and R&D and that's what established service providers should give their clients.
If this can be done, I myself don't think that the Asian companies can capture more than half of the market in the long run. What is your point of view?
P.S. I got the cool photo above from Mayforth website.
Tags: outsourcing offshoring supply chain scm india china accenture ibm eds 2007 supply+chain
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Response from:
hln
(05/30/07 7:13pm)
Response from:
Offshore outsourcing services
(05/19/09 12:39am)
Outsourcing will save you a great deal of money and it is the only option to lead you through the turbulent financial storm. India, China, Philippines etc are some of the hot destinations in the realm of outsourcing.
Regards,
http://www.saibposervices.com
Offshore outsourcing
Regards,
http://www.saibposervices.com
Offshore outsourcing
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I realize the offshore concept is more far-reaching than mere software development; my mother is constantly complaining about phone tech support from software companies. But I think it all boils down to quality. If there's a tech support person providing phone support who can't be understood, that's another quality issue.
About 5 years back, my boss at the time said that we tech folks shouldn't worry about whether we'll have jobs - we should focus on the fact that if the offshoring trend continues, we'll have DIFFERENT jobs...meaning that we'll be doing much more analysis and less development. That's not necessarily a bad thing. The problem is that the quality issue permeates the software product as a whole, right down to the error messages.
I could go on, but I think I've made my point.