Consider the Source

Catching Up or Staying Ahead?

Today's blog on the HP/EDS deal comes from Peter Allen, Partner and Managing Director, TPI.

The marriage of EDS and HP is not about catching IBM, as has been commonly reported, but about staying ahead of Google, Amazon and Dell, while emphasizing services over effort.

Look at the bigger picture: there are only two clear leaders covering the broadest spectrum of outsourcing services.  IBM and Accenture cover the gamut of IT and business process services, including many industry-specific processes for airlines, retail, pharmaceuticals, and banking. The nearest pursuers are in India: Infosys, TCS and Wipro.

The combination of EDS and HP is one step short of having the sort of coverage enjoyed by IBM and Accenture, but three steps ahead of everyone else.

European Roulette

Today's blog on European outsourcing comes from Duncan Aitchison, Partner and President of TPI’s operations in EMEA.

You would think that a shift in global outsourcing demand away from the U.S. would be accompanied by an increase in outsourcing activity in Europe. Surprisingly, this has not been the case.

If one looks at the Total Contract Value (TCV) of private sector outsourcing transactions conducted in Europe each year since 2003, the amount has been consistently around the $40 billion level.

What is more interesting, however, is the pattern of outsourcing activity at the country level within Europe.

Europe remains a challenging market for any business. It doesn’t behave as a definable, targetable concentration of homogeneous demand.  It is a collection of diverse countries and regional markets with different cultural and linguistic characteristics, as well as a variety of legal and industrial structures. Together, these factors influence what is bought, where, and how it needs to be sold.

Listening to the Buy-Side

Today's blog on TPI's Americas Sourcing Leadership Exchange (SLE) comes from Peter Allen, Partner and Managing Director, TPI.

Falling quickly on the heels of our Americas Sourcing Industry Conference (SIC) held for service providers, we conducted our latest Americas Sourcing Leadership Exchange (SLE) for buy-side participants last week in Chicago.

What can one learn from spending a couple of days with almost 200 executives who are actively involved in the outsourcing business proposition and battling the recessionary markets of 2008?  Plenty.

Despite some of the popular conjecture about a slowdown in the adoption of outsourcing, this was our largest SLE ever, and the attendees generally expressed a desire to become ever MORE active in using outsourcing to achieve greater variability in their corporate cost profiles.

Many of the attendees, whether in the planning stages or actively managing existing arrangements, were keen on achieving even greater flexibility in their costs.  The discussions around captive operations, shared services and internal optimization received considerable air time when considered in contrast to outsourcing.

Think Outside the Indian Sourcing Box

Today's guest blog on outsourcing in Latin America comes from Melany Williams, Partner & Managing Director, TPI Innovation Center.

With a wave of buyers of outsourcing services looking to Latin America, the habit of moving your business 7,000 miles away needs evaluation.

The appreciation of the Indian rupee by more than 11 percent against the U.S. dollar this year and the rise of the Canadian dollar is causing many companies to consider diversifying their offshore portfolios. India is facing constraints such as wage inflation, talent attrition and infrastructure strains, and Latin America is increasingly becoming the alternative “go-to” location.

A number of factors support setting up a Latin America operation: most countries in the region have stable social and economic environments, the necessary infrastructure, intellectual property rights, and free trade agreements including NAFTA that make sharing data in core business applications across borders possible. These regions are more appealing now than a few years ago and successfully migrating IT and business service support functions requires a balanced view of risks and opportunities.

Identifying the 3C Provider

Today's blog on the future of outsourcing comes from Peter Allen, Partner and Managing Director, TPI.

A new breed of service providers will emerge to service outsourcing demands in the coming years. Called the “3C sourcing framework,” we expect a relative equilibrium with emphasis on cost, capacity and capability.

We see the characteristics of the 3C framework applied with equal emphasis to internal service delivery organizations as well as the selection of external providers. In fact, the criteria may be the ultimate determinant of service delivery strategy for a broad range of technology-enabled business functions. Here are some of the characteristics clients look for in their prospective service providers:

A Rising Tide Lifts All Boats?

Today’s guest blog on European outsourcing comes from Duncan Aitchison, Partner and President, EMEA, TPI.

The outsourcing market has seen a near seismic shift over the last two years in the geographic profile of market demand. No one is standing still.

For the majority of the past three decades the United States has been the leading buyer of outsourced services. In fact, just five years ago it comprised 66 percent of the outsourcing contract value. By the end of 2007, this picture changed dramatically. The United States accounted for less than 30 percent of the global contract value while Europe led by 50 percent in the same period.

So how has this change impacted the service provider community and the European heritage providers in particular?

Contact Center Offshoring: Putting the Brand at Risk?

Today's guest blog is from Mike McMenamin, practice leader, Contact Center Advisory Services, TPI.

A popular cocktail conversation topic these days is culture shock experienced during exchanges with foreign customer support center representatives. The language nuances are fodder for both humor and frustration, and case for offshoring skepticism. Countless consumer-oriented businesses are resisting offshoring services for fear that the backlash from consumers will tarnish their brands.

The Precision of Terms – The Service Delivery Family

In a prior blog, I outlined a few of the phrases and terms that people use to refer to outsourcing and offshoring from a strategic context. Today, I want to dig into the more specific words that are used to discuss outsourcing and offshoring.

Here we go …

It’s a Sourced World After All: Scenarios for a Recession

Sid Pai’s recent blog on a likely U.S. slump led me to conclude: Globalization means that contagion spreads quickly and broadly -- a large country’s pain causes the world to ache -- and the resulting economic fallout induces near-sightedness in senior executives. Recession leads to shifts in outsourcing trends, in turn requiring realignment of IT and business process strategies to take into account newly created risks and opportunities.

SHORT-TERM SLOWDOWN?

Today's blog on the effect that a U.S. recession could have on the outsourcing industry is by Siddharth A Pai, Partner & Managing Director, TPI India.

Despite the subprime crisis, most commentators, self included, doubted predictions of a U.S. recession a few months ago.  This confidence has steadily eroded. Concern about the global economy is mounting - the International Monetary Fund (IMF) has slashed its forecast for U.S. growth and warned that no country will be immune from a "global slowdown."  The U.S. Federal Reserve has announced stimulus packages of over $150bn and is cutting interest rates.