Industry reports hail India as the fastest
growing IT and ITES hub. It is expected to capture over 70% of
foreign businesses by 2010, backed by the skills of over 250,000
Global companies today are outsourcing numerous knowledge oriented
processes to vendors situated in various parts of the world.
According to a report, this business is expected to reach USD
17 billion by 2010, of which USD 12 billion would be outsourced
to India alone.
Apart from India, countries such as Russia, China, the Czech
Republic, Ireland, and Israel are also potential vendor countries.
In the future, it is envisaged that off shoring has a high potential
as it is not restricted only to Information Technology (IT) or
Information Technology Enabled Services (ITES) sectors and would
also include other sectors like Intellectual Property-related
services, Business Research and Analytics, Legal Research, Clinical
Research, Publishing and Market Research.
Amongst all this frenzy, companies need to take a step back
and examine factors that influence selection of a vendor when
business is being outsourced.
Choice of Country is a key component in selecting a vendor as
there is a large knowledge pool and a significant cost arbitrage.
Countries like India, Philippines and China are front runners
in providing these services. The nature of work demands advanced
analytical and specialized skills. India today is one of the
best markets for highly analytical skills. It is estimated that
over 95% of the staff in these sectors in India are at least
graduates in engineering, finance, market research, fluent in
English and possess a ready familiarity with providing off-shore
high value added services.
Quality of Management of the organisation in a global world
and managerial talent is a critical factor in selecting a potential
vendor. Ideally, companies should ensure that the management
team has deep industry knowledge in the sectors that are being
Along with a strong management, Financial
Stability of a company
is a key factor. It is important that the vendor is suitably
financed to be able to withstand the uncertainties of business
besides being able to fund expansion as your business grows.
One of the ways to select a partner is to request for a pilot
project. In other words, Proof-of-Concept this is applicable,
especially in the banking and finance industry. These short-term
pilots ideally allow both clients and vendors to assess the viability
of service deals and areas and to fine-tune deals which typically
stretch over 5-10 years.
Finally, prepare a comprehensive list
of questions for the team which will eventually manage the ‘knowledge process transfer’ and
insist on a detailed teleconversation with the various members
of the team to ascertain knowledge levels. This implies Drilling
down the Research team.
Infrastructure is another critical part
of the customer’s
value and supply chain. The focus is providing strong delivery
capabilities which will assure global clients and provide them
with seamless trouble free service. Vendor’s needs 24/7
fail proof connectivity to collect data, perform secondary research
and transmit data globally. This will provide the vendor reduced
time to market for product development and enable effective servicing
of global clients.
Off shoring is an inevitable organizational innovation and it
will continue to grow in popularity, while offering multiple
gains. Understanding the abilities of the vendor to deliver present
and future requirements of the organisation becomes the underlying
benchmark for choice of partners in your business.