VideoA vendor should also be able to accommodate clients that may want to expand the portfolio of services they outsource and establish a more-extensive, long-term relationship with the supplier. "More and more," says Gartner analyst Debashish Sinha, "there's a shift from viewing offshore outsourcing as a tactical, low-level method of saving money to seeing it as strategic." As a result, the outsourcer's capabilities and awareness of a client's total needs become paramount.
Even if you decide offshoring is not for you, you may be involved with it nonetheless. American IT services and consultancies — including Accenture, Hewlett-Packard, EDS, Computer Sciences, and IBM Global Services — are offshoring with a vengeance. Accenture, for instance, operates in the Philippines and India, while IBM has operations from Mexico to India, including Canada and China. "We started using offshore capabilities for our internal applications in the mid-1990s," says Mike Dawkins, general manager of global operations for IBM Global Services, "and three or four years ago we incorporated our commercial customers. We believe we can meet any of the price points of competitors, including Indian companies." —L.McC
A World of Differences
What are the major challenges your company will encounter in offshore outsourcing?
Source: NeoIT
- Managing communications
- Managing project timeline or budget
- Integrating with internal applications and processes
- Managing change requests and scope of work
- Negotiating contract terms
- Understanding the differences among services providers
- Understanding and quantifying benefits
- Getting buy-in from management
Oh, Canada
For those who don't want to venture far from home, there's yet one more option to consider: near-sourcing. With this approach, you send your software-development projects and related IT work over the border to Canada. The advantages? "The workforce is much closer to what you'd find in the U.S. in terms of skills, and their legal system is similar to ours, which is important in resolving any disputes," says I-4 research director Mike Gerdes, who notes that courts in other countries such as India can take years to deal with a civil case. Travel time is less, the time zones match, and Canadians are generally price-competitive with more-distant outsourcers. That is, as long as the Canadian dollar remains valued well below the American greenback. —L.McC.
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