Outsourcing: Transforming the World of Business, Driving Globalization

Entrepreneurial Outsourcing in a Flat World

rom Outsourcing Insider 

Contrary to what some naysayers of outsourcing are saying, the industry is alive and well, and it seems that it's going to stay for a long while yet. As mentioned in a previous article, competition in outsourcing is becoming very stiff now, what with the industry expanding, as is what professional services firm Pricewaterhouse Coopers surmised in its Jan, 2010 report. Everyone wants a piece of the cake, but when everyone's toting the same salver, it's a bit difficult to decide to whom to give a piece to.

Which then begs the question: What strategies are some of the outsourcing companies employing now in order to differentiate themselves from the competition? Well, taking a look at the recent outsourcing news, here's what we found:

They're Forming Partnerships

"Strategic partnership" is the term, and that's what these companies are doing now, take Fortify and Keypair Technologies, Liquent and TAKE Solutions (NSE:TAKE), Hexaware (NSE:HEXAWARE) and EBaoTech, or the most well known of the bunch, Wipro (NYSE:WIT) and Main Street America Group, who all announced new strategic partnerships on March 4. All of these companies forged their strategic partnerships to help them broaden their reach and improve their offerings.

They're Refocusing their Business

The very nature of outsourcing is that it allows you to focus on your business; outsourcing companies themselves should already be experts with this. Thus, it wasn't so surprising when the news came out on March 4 that Convergys (NYSE:CVG) had sold their HRM line of business to NorthgateArinso. With this move, Convergys will be able to focus on their business, and as their CEO, Jeff Fox put it, "[the move] provides an opportunity for Convergys to focus our investments and efforts on growing our Customer Management and Information Management businesses." And Convergys is not the only one who's refocusing their business. Infosys (NASDAQ:INFY), on March 5, made it known that they are now planning on having a third of their revenue come from new services such as cloud computing and platform-based offerings. This is in line with adopting a ‘pay-per-use business model' wherein customers will be paying only for what they use, and what results they achieve. As Infosys' CEO Senapathy Gopalakrishnan so ably put it, "It increases the risk, and the way we can make money is when the platform is shared. We can't make money on a single deal because competition will make sure that our margins are very less. And you have to remember that we need to share these revenues with other vendors." By focusing on less ventured waters, Infosys is ensuring that they'll get a nice foothold in that market.

They're Going Green

Going Green is now a big issue in many countries, including the United States and this doesn't just go for the big companies. Even right down to the home makers, people are finding the environment a big issue and a noteworthy cause. Which is why the move done by Xerox (NYSE:XRX) company, ACS, merits one for the books as an effective strategy, not to mention that they're also helping the environment. On March 4, ACS unveiled their newest green effort which is the state-of-the-art green data center at Telford in the UK. The center boasts of "the best-of-breed technology with the highest caliber of green credentials," and the ability to save up to 70% of energy costs while reducing the carbon footprint by approximately 4,200 metric tonnes annually. With this impressive data center, which was designed and built by IBM (NYSE:IBM), ACS is clearly showing the public their stance and support for becoming more environmentally friendly, ushering the company into the public's, or any potential clients, good graces.

They're Keeping Their Ear to the Ground

What about us you ask? Well our strategy is that we keep our ear to the ground. Information is essential and keeping up to date on your competitors and prospective clients is a must. Of course it's not always easy to do so when there are a million things to do, and another million things are happening in the world, not just in outsourcing. But it really does pay to be informed. With us, we offer email outsourcing news subscription service as a value added service, which is not only good for, well anyone who's interested in outsourcing since the service is free and open to anyone, but also with us because this allows us to go through the news on a daily basis and see what's up in the world of outsourcing.

These are only four, from a span of two days mind you, and I'm sure there are hundreds of different ways outsourcing companies can differentiate themselves from their competition. The only question now is do you use them?

Author: Audrey B.

That's right, I said it. While this may seem like a strange comment from someone who produces one of the largest events about global sourcing, let me explain.

As I talk to more executives who make sourcing decisions globally for their companies, I have noticed lately that no one uses the word "Outsourcing". I know some of it has to do with the political implication of the word but I still think it has more to do with the fact that they don't consider what they do as outsourcing.

Recently an insurance executive who had a specific claims processing dilemma and needed to find a company that could help him, approached me. He told me he wasn't looking for an outsourcing company but an organization that knew his market and the technology available that could solve his problems. He was looking for a business solution.

An executive at a mid tier investment banking firm told me that they needed some analysis help and was looking to find a partner that could help them on the back end. Clearly a KPO deal right? He barely know what the term KPO meant. He was looking for a partner, not an outsourcing firm.

Our business is a great example. Until this year, our event was called OutsourceWorld. This year we rebranded it as the "Global Sourcing Forum + Expo". The previous name just seemed old. It seemed dated and it just wasn't a fair representation of our event. Internally we also use Salesforce.com as our CRM solution. It sure seems like an outsourced application to me. But if you ask Salesforce.com, they'll use a cool new phrase which we are all hearing about every day called Cloud Computing.

Most business execs need results, not a label for what they are doing. They need the proper resources no matter where those resources sit. They need execution.

Maybe the word Outsourcing isn't dead yet, but I surely believe it's on life support.