GT_March_2010 by Ali Comelek

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GlobalizationToday

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P R E M I E R E

I S S U E

Official Magazine of the International Association of Outsourcing Professionals

GlobalizationToday Commerce Redefined

March 2010

OUTSOURCING 2010 THE ROAD AHEAD:

Top 10 Trends You Must Know Page 20

BEST KEPT SECRET IN OUTSOURCING Page 28 PRACTICAL GLOBALIZATION WISDOM Page 36

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GlobalizationToday for FREE!

FOUNDER & PUBLISHER Ali Comelek ali.comelek@globalizationtoday.com CO-FOUNDER Larry Genkin lgenkin777@gmail.com

Get Listed in Globalization Today Buyer’s Guide All Globalization Today subscribers have complete access to our Buyer`s Guides that allows them to quickly ﬁnd and purchase outsourcing and offshoring related products and services. Globalization Today offers a free basic listing to providers in the following categories: t *OGPSNBUJPO 5FDIOPMPHZ t *OUFSOFU 8FC t $POTVMUJOH t #VTJOFTT 1SPDFTT t )VNBO 3FTPVSDFT t "SU %FTJHO t .FEJDBM #JMMJOH t 1SJOUJOH 1VCMJTIJOH t 8SJUJOH &EJUJOH t &OHJOFFSJOH "SDIJUFDUVSF t 'JOBODF t 7JSUVBM "TTJTUBOUTIJQ

EDITORIAL and PRODUCTION MANAGING EDITOR Ehren Von Lehe www.vonlehecreative.com AD PRODUCTION MANAGER Donna Eastman donna.eastman@globalizationtoday.com

EDITORIAL ADVISORY BOARD Dr. Bruce Greenwald Prof. Asset Management and Finance Columbia Business School Dr. Matt Waller Prof. Marketing and Logistics - University of Arkansas Dr. John Hindle Sr. Manager - Accenture, Adjunct Prof Vanderbilt University Mike Corbett Chairman - International Association of Outsourcing Professionals Matt Shocklee CEO & President - Global Sourcing Optimization Services

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GlobalizationToday March 2010

INSIDE:

7 PUBLISHER’S NOTE

Not Your Father’s Magazine

8 NEWS FEED 12 BLOG BEAT 13 THINKING DIFFERENTLY

IAOP Chief Mike Corbett’s ideas for taking on globalization’s toughest challenges

17 RESPONSIBLE CAPITALISM

Failure to be seen as a good corporate citizen has undermined many an outsourcing endeavor. Ron Babin offers practical guidance to avoid this fate.

28 OUTSOURCING TO THE PHILIPPINES Everyone knows about India & China, but what’s happening in the Philippines may surprise you.

36 PRACTICAL GLOBALIZATION WISDOM Learn the secrets of successful globalizers

40 VALUE HEALTH CHECK SURVEY

Identify opportunities to enhance the value of outsourcing contracts.

OUTSOURCING 2010 - THE ROAD AHEAD 10 Important trends every outsourcing professional must know

42 WORLD CONNECTION What’s Happening at IAOP

46 OUTSOURCER’S DESK RESOURCE One stop resource for finding vendors of your outsourcing needs

50 SCRAPBOOK 51 ADVERTISER INDEX

GlobalizationToday M A G A Z I N E

Globalization Today is a monthly business magazine published exclusively for outsourcing professionals responsible for transforming their company’s businesses through outsourcing. Globalization Today readers are executives who on average are responsible for $60 million per year of outsourcing spending, with some overseeing outsourcing programs in the billions of dollars.

To help them reach their goals, Globalization Today content includes: t Expert Columnists: Hear directly from the best minds in the business t Case Studies & Profiles: Industry successes (and sometimes failures) are studied and presented for all to learn from t News & Analysis: When news breaks, GT doesn’t just tell you what happened, we help analyze what it means t Thought Leader Interviews: Leaders sharing their lessons learned t “How-To” Feature Stories: Going beyond the “what” so readers can implement what they learn t Outsourcing Buyers Guide: Monthly resource that makes finding qualified firms easier and faster

Go to www.globalizationtoday.com to get your free subscription!

PUBLISHER’S NOTE

• First Magazine Launching in 7 Different Formats. If you like printed magazine great, we’ve got a print edition for you. But GT is also published in 6 other formats including: Multi-media, PDF, Audio Podcast and iPhone editions. Our goal is to give you GT content in whatever format works best for you (yes that includes our soon to be 8th format - The iPad edition.) • “Open Source” Editorial. No more pundit journalists who’ve never worked a day in our industry preaching to you. Our editorial is written by real people who have REAL life experience in the outsourcing industry, because we allow anyone with a desire to share their thoughts to set-up an editorial contributor account. GT’s editorial is a complete meritocracy. Readers rate the content, with top rated content getting the most visible positioning. This gives everyone a powerful, but LEVEL platform to communicate your thoughts, news, expertise and analysis with your colleagues. • No Rate Card for Advertising. We’ve borrowed a page from the eBay playbook and will sell all of our advertising via auction online (with no minimum bid). You only pay what you think an ad reaching our 100,000+ outsourcing professionals is worth.

GLOBALIZATION TODAY NOT YOUR FATHER’S MAGAZINE

f I had dollar (or euro, rupee, peso, yuan...) for every time someone said “you’re launching a magazine, what are you crazy?” I wouldn’t have to work for a living.

(It’s apparently no longer a secret that there are a tad more publications being folded and downsized than launched these days.) Well, I’m not crazy and that’s because -- at the risk of sounding horribly cliche while trying to make a good first impression -- Globalization Today is no ordinary magazine. The truth is, outsourcing professionals are now on the bleeding-edge of publishing. Here are just a few ways Globalization Today is different from our “fathers’ ” magazines:

• Free Advertising for Life. All vendors will receive a free ad in our Outsourcing Buyers Guide. This will be the largest repository of vendor information publicly available for free. Just go to our website and signin to to get your free ad. And, if you want even more space to tell your story in more detail, we’ve got inexpensive options to help you do just that. • Distribute Custom Issue of GT w/Your Ad on EVERY Page. Instead of forcing everyone to go through us to get GT content we allow 3rd party distributors like you to send complimentary issues of our multi-media edition (includes video, audio, hyperlinks etc.) to your customers and prospects. Best of all when you do this we put together a custom issue for you, you get your ad (or ad for your partners) on every single page. This is one reason why our circulation will more than double in our first year. And arguably most importantly is our role as the Official Publication of The International Association of Outsourcing Professionals (IAOP), the only truly global organization for outsourcers. We are working together very closely with this amazing group of professionals, lead by the visionary Michael Corbett. As excited as I am about the launch of Globalization Today I know that it’s just a start. To serve you best, I need your feedback. If you wouldn’t mind dropping me a line and tell me not just “how we’re doing”, but “what we should be doing” I would be very grateful. You can reach me directly at ali.comelek@globalizationtoday.com I look forward to hearing from you!

Ali Comelek Founder & Publisher Globalization Today Magazine

globalizationtoday.com

NEWS FROM AROUND THE WORLD

3/4/5

6 1/2/7

1 U.S. WALGREENS REACHES AGREEMENT WITH GENPACT FOR ACCOUNTING SERVICES

ewiring for Growth initiative. Walgreens is finding ways to be more effective and efficient to support the company’s growth strategy. Financial terms of the agreement were not disclosed. Under the 10-year agreement, Genpact will assume several accounting processes currently managed by Walgreens, as the retailer implements a new structure for its accounting division. The agreement will impact accounting staff at its offices in Deerfield, Illinois and surrounding areas, including Danville, Illinois and nine smaller accounting locations across the U.S. Genpact has agreed to acquire the Danville facility and maintain or potentially grow employment levels over the duration of the agreement. Approximately 500 Walgreens accounting employees in Danville

www.genpact.com 7th January 2010

will become Genpact employees within the next four months, with the remainder staying with Walgreens. Over the next six to 18 months, another 300 jobs at various sites may be impacted as part of the transition of accounting work. With this strategic decision, Danville will become the largest of three delivery centers for Genpact in the U.S. and positions Genpact as a strong player in the retail vertical. This move also strengthens the company’s offering for the healthcare industry given its ability to deliver solutions across all sub segments including pharmaceuticals, health insurance companies, pharmacy benefits managers, pharmacies, device manufacturers, and hospitals. Genpact will continue to make investments in building domain expertise and enhancing the skills of employees in Danville while leveraging their expertise to provide greater on-shore access to its clients.

2 U.S. WILLIAMS LEA ANNOUNCES NEW CEO, AMERICAS

illiams Lea announces the appointment of Tim Rodber as the new CEO of Williams Lea, Americas, effective January 4, 2010. “I am delighted that Tim is taking up the challenge of driving our business in the Americas to the next level. He has a track record of building long term customer relationships, and establishing and managing successful teams. We are confident that

GlobalizationToday March 2010

www.williamslea.com; 5th January 2010

under Tim’s leadership, Williams Lea will continue to achieve success in the region” said Tim Griffiths, Group CEO. As the CEO of International Operations for the past two years, Tim led the business strategy for operations in Germany, India and Asia Pacific. During his time in this role, Tim drove the reorganization and growth of the German business and integrated both

the Indian and Asia Pacific operating businesses into the global Williams Lea platform. Previously, he held the role Chief Operating Officer of the Americas from 2005 to 2007. Justin Barton, former CEO of the Americas will remain as NonExecutive Chairman of the Americas. Mr. Barton will also lead Williams Lea’s Global Corporate Development function.

NEWS FROM AROUND THE WORLD

4 UK HOUSE OF FRASER OUTSOURCES IT SUPPORT TO CAPGEMINI UK www.outsourcing-alert.com; 13th January 2010

House of Fraser, the UK and Ireland’s premium department store, will outsource its IT support to Capgemini UK plc in a comprehensive seven-year contract that takes effect this month. The contract covers management of data centre services, applications support and development, service desk, desktop support and third party services. It also includes network services, which will be provided by Capgemini under a sub contract agreement. The Royal Victoria Hospital, located in fast-growing Ontario city of Barrie, about 45 minutes from Toronto, has launched a state-of-the-art resource system in partnership with TELUS Sourcing Solutions technology to manage the hospital’s human resource functions and disability management services which will allow the hospital to focus on hiring 1,000 employees. The TELUS system will also allow the hospital to automate a new HR processes through a quick and simple web-site for the current 2,200 employees.

3 UK UK MOD MULLS OUTSOURCING FOR THE MERCHANT NAVY

p to 20 companies have told the Ministry of Defence (MoD) of their interest in participating in the part-privatization of the Royal Fleet Auxiliary (RFA) — the Merchant Navy. The MoD had originally been looking to buy six new refuelling tankers for the RFA as part of a programme called Mars. However, an altered request for proposals issued at the end of last year had a much wider remit and the MoD is now considering leasing, chartering or even converting second-hand ships to save money. People familiar with the MoD’s thinking said that the cost of providing new tankers built to military standards could be more than £900 million, whereas buying new commercial ships from South Korea or Taiwan could cost as little as £150 million. Chartering existing tankers or buying second-hand vessels would cost even less. The MoD is also considering outsourcing the management of the RFA fleet. This could be given the go-ahead as part of a review into the RFA fleet or it could be introduced solely for the six new vessels. Several groups including James Fisher, the UK’s largest ship broker, Maersk, Serco and VT Group are understood to be interested in managing such a contract. Outsourcing the fleet management could save tens of millions of pounds more for the MoD,

www.business.timesonline.co.uk; 15th January 2010

5 UK DEPT. OF WORKS & PENSIONS AWARDS DEAL TO FUJITSU, HP LOSES OUT www.computerweekly.com; 13th January 2010

which is under pressure to cut its budget. “Shipping is a hard business and you have got to make your assets sweat,” one ship broker said. “A typical RFA ship is probably at sea only 200 days a year but a commercial vessel would be operating at least 340 days a year.” Industry insiders have revealed that the RFA’s 16 ships typically carry crews twice as large as th e equivalent commercial vessels. More money could be saved if the RFA followed standard commercial practice and hired foreign crew members. However, because of the sensitive nature of the work that RFA vessels do supplying the Royal Navy and the fact that they operate in war zones, it is likely that the crews will remain predominantly British. Some respondents are understood to have proposed supplying the ships as a Private Finance Initiative similar to contracts already issued by the MoD for its air-refuelling fleet and military satellite communications. That could allow the ships to be used for commercial purposes when not supplying the Royal Navy. BAE Systems and Daewoo, the South Korean industrial conglomerate, are understood to have teamed up to propose building the six vessels. However, they are not thought to be in the running to manage the fleet.

HP has lost a major contract to Fujitsu Services after the Department of Work and Pensions (DWP) named Fujitsu as its preferred bidder for the desktop contract. The change is part of an IT overhaulat the department. HP subsidiary EDS holds several contracts at DWP. A spokesperson at DWP said the contract winner would be announced in late January or early February, although she was unable to say when the contract work would begin. The contract is for desktop services but the department could not say how much it is worth. DWP CIO Joe Harley said in 2008, “We are reviewing our plans for our major IT services contracts as our principle existing contracts expire during 2010-11. “We will be managing a series of competitions to replace existing contracts progressively by 2015.” DWP said at the time that it wants the new holder of the desktop contract to “help drive innovation and further bring down IT costs.” Also included in the overhaul will be contracts for hosting services, voice and data networks, application maintenance and support, data centres and integration services.

globalizationtoday.com

NEWS FROM AROUND THE WORLD

6 AUSTRALIA MORE OUTSOURCING FROM AUSTRALIA

ustralian blue chip companies are more likely than their overseas counterparts to send technology work to cheaper offshore locations such as India, according to a survey. Technology chiefs from Qantas, Fosters, Westpac, Holden and Wesfarmers Insurance were among 19 local participants in the Capgemini study. Chief information officers from 490 large commercial and public entities worldwide participated in the survey and included LOreal, Mars, Michelin, Allianz, ArcelorMittal, Bayer, Air France, Sanofi-Aventis and Shering Plough.

GlobalizationToday March 2010

www.offshoringtimes.com; 13th January 2010

According to Capgemini, 19 per cent of outsourcing undertaken by Australian companies was sent offshore, compared with 14 per cent by their international cohorts. “When technology outsourcing happens in Australia, the chance of it having an offshore element is much higher than overseas organizations,” Capgemini Australia business managing director Deepak Nangia said. Australia’s geographic and time-zone proximity to relatively low-cost offshore bases was key to the adoption of offshoring. Mr Nangia said there were fewer barriers to reaching out to mainland Asia as an offshore centre compared

with European countries or the US. Offshoring was especially evident in the financial services sector, in which outfits such as Tata Consultancy Services, Mahindra Satyam, HCL, Wipro and Infosys had a large presence. Commonwealth Bank, Westpac, ANZ Bank and National Australia Bank relied on Indian outsourcers for technology services and Mr Nangia said the tendency to outsource and offshore would increase because most local firms still had large internal IT departments.

NEWS FROM AROUND THE WORLD

7 U.S. SHARED SERVICES IS 2010 THEME FOR SOMERVILLE, NEW JERSEY www.sourcingmag.com; 10th January 2010

aced with the highest tax rate in the county and dwindling state aid, Somerville Mayor Brian Gallagher said shared services will be the borough’s theme for 2010. In his state of the borough address, Gallagher told residents in order to reduce the cost of living in the borough, the council would have to find cost-effective alternatives to services. The average tax bill for a home assessed at the borough average of $148,710 is $7,831. “While governing on the local level is for the most part immediate, responsive, efficient, economical and personal - the way government should be run - we find ourselves in a situation where the business of government must change dramatically at every level in order to be more affordable,” he said. One way to cut costs without laying off employees would be to turn over the borough’s health office to Somerset County, Gallagher said. “In our overall review and assessment, it became very apparent that we were duplicating services that the county could easily provide,” he said. Currently a shared service with Raritan and Manville, the borough’s health office will merge with the county in April, Gallagher said. It is unclear whether Manville and Raritan will follow, said Somerset County Department of Health Director John Horensky. The borough council also is evaluating its dispatch service and the public works department. “We are currently evaluating a report commissioned by Raritan and Somerville jointly to see if each department could benefit from the other by sharing people, resources and equipment,” he said. Gallagher expects Somerville and Raritan to reach a decision about the DPW by April.

8 INDIA INDIAN BANKS USE OUTSOURCING ROUTE TO SCALE UP ATM NETWORK www.economictimes.indiatimes.com; 14th January 2010

Banks are increasingly using the outsourcing route to scale up their ATM networks without wearing out their resources The entry of multinational financial technology service providers, who are keen to be a part of the payment space, has facilitated large investments in ATM network. Axis Bank is in advanced stages of finalising its outsourcing vendor while others like Central Bank of India have recently signed an agreement. SBI has also adopted this model on some ATMs with different providers. Under this model, the cost of setting up and running the ATM is borne by the service provider while the bank pays a fee for every transaction. Since the bank has the ATM license and also deploys its cash in the ATMs, it receives a portion of the fees generated by the use of the ATM by customers of third-party banks. ATM transactions have jumped 40% after India’s central bank (RBI) allowed accountholders to access any ATM across the country without any charge for five withdrawals up to Rs 10,000 a month. Since April 2009, the transaction costs are netted out by bankers among themselves with each bank paying for any thirdparty ATM use by its customer. Axis Bank, which currently has 4,000 ATMs, had started the process around eight months ago. Vendors who are in the race for the transaction include Tata Communications Banking InfraSolutions, AGS Infotech and Prizm Payments. The bank is likely to take a final decision within the next couple of months. “We had to build an entire new model. We also had to ensure that customers are not impacted.

“Considering the high capital investment and technology requirement, banks are finding it extremely convenient to partner with financially strong payment services company. With 140 million debit cards issued, banks are finding that the transaction volumes are increasing. From April 1, 2009, there has been nearly 40% jump in ATM transaction volumes,” says B Amrish Rau, country manager of First Data.

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BLOG BEAT

NEWS AND COMMENTARY FROM BLOGGERS AROUND THE WORLD

BANK OF AMERICA PLANS BPO CENTER IN MUMBAI Bank of America (BoA) will set up its second outsourcing center in Mumbai, India. This second outsourcing center to be built in Andheri in Mumbai will be able to employ 500 people, and is part of the bank’s cost cutting measures. It will conduct market research for BoA’s global capital markets and investment banking divisions. www.outsourcing-weblog.com By Creative Weblogging 10th January 2010

Buzz Blog

BoA’s first outsourcing center in Hyderabad (dedicated to the bank’s corporate and consumer accounts) has expanded to nearly 1,000-strong team since 2004. Continuum Solutions handles the Hyderabad’s BPO operations, and will do so for the Mumbai center. According to sources, “The bank’s decision to establish the second research outsourcing unit was inspired by the performance of its Hyderabad center and Mumbai has been chosen for easy availability of human resources for research purposes.”

SECOND TIME AROUND

There’s a growing recognition that an outsourcing initiative is a journey. Executives of some of the world’s leading companies have said that to me when I interviewed them about the successes and challenges in their outsourcing arrangements. A question I’ve asked when interviewing literally hundreds of outsourcing execs is what they would do differently the second time around if they had an opportunity to start over (from the initial negotiation phase). It’s hard to believe, but a few (very few) say they wouldn’t do anything differently and that everything went smoothly and according to plan. Many reply that they actually did get that second-time-around chance as they renewed their contracts and corrected the aspects that weren’t working very well or that they plan to tweak some www.outsourcing-buzz-blog.com By Kathleen Goolsby 13th January 2010

things at the upcoming contract renewal. Others tell me what they now realize in hindsight would have helped them avoid the costly challenges they encountered. They’re the people that others embarking on an outsourcing journey need to listen to. I think it’s like going on trip and taking along a travel guidebook that offers insights about the history of the area and points out the major tourist sites and pitfalls. You know, things like: it’s worth an extra day to take the side trip to see the . . . the cottonwoods along the riverbank are two centuries old, but make sure you don’t go there during the summer months if you’re allergic to . . . the best place to purchase beautiful native handcrafts at reasonable prices is . . . make sure you wear comfortable shoes because there are eight flights of steps to the view at the top . . . and be sure to avoid the risks of eating at Taco Joe’s.

WHERE ARE THE IT JOBS? After a brutal year, what can tech pros do to make the most of their careers? In a recent presentation for InfoWorld, Gale outlines some interesting findings with www.cio.com by Galen Gruman availability and nature of IT jobs in the US. 2nd January 2010 1. Where are the Domestic Jobs Growing – In cheaper locales like Atlanta, Dallas, Suburban New York, and Philadelphia. But also in pricier but established business and government hubs like Boston, Chicago, Los Angeles, Seattle, Silicon Valley and Washington D.C. 2. Where are the jobs growing - Post recession, first industries that seem to have recovered are telecom, electronics and computers/ hi-tech. Java, .NET, C+ developers, IT security engineers, software engineers, QA professionals and SAP consultants are

in demand. 3. Overseas jobs – are growing but slower than the previous years. App development, web development & implementation, data center maintenance & operations, server maintenance and helpdesk jobs are growing overseas. 4. Where are the jobs going – in the cloud, into data maintenance, ops, PC administration, backup and disaster recovery; IT dislikes the cloud, but business interests continues to push adoption 5. Why fear is not the answer: Because many lost jobs are just moving providers; while offshoring continues to lose appeal for “important” work; developing countries are beginning to need their own people for domestic work; and automated jobs are a way of life – nothing new.

LONDON SCHOOL OF ECONOMICS PREDICTIONS FOR OUTSOURCING IN 2010 Today I contacted professor Leslie Wilcocks, one of the www.computerweekly.com experts on outsourcing at the London School of Economby Karl Flinders 13th January 2010 ics. I was calling him about the deal that Capgemini had won with the House of Fraser but while I had him on the line I asked him for some predictions for this year. Off the cuff he had some very interesting thoughts. These are some of them: “A lot of the quick and dirty outsourcing contracts signed during the downturn will break up towards the end of this year.

“The ecomic situation will improve and companies will outsource more, especially BPO, because they have reduced their headcounts. But the recession was deeper in the UK and may take until 2011. “Governments are readying a lot of outsourcing.” He also said offshoring will become less controversial which might explain why governments will be more comfortable doing it. Interesting set of predictions I think. I will continue to post predictions for outsourcing in 2010 so if you have any fill the comments section on the blog. We can revisit them at the end of the year and see how close to reality we got.

RESOURCE BOX Bobby Varanasi, COP is Chairman & CEO of Matryzel Consulting Inc, a strategic management & sourcing advisory firm focused on providing concrete and actionable advise to governments and corporations. He is a Global Trainer for IAOP’s COP Program, and is a member of IAOP’s Asia Pacific Advisory Board and IAOP’s Advocacy & Outreach

GlobalizationToday March 2010

Committee. He has worked on multiple strategic sourcing engagements across various continents over the years, having advised Fortune 500 corporations and Federal governments from regions of Asia-Pacific, Latin America, Caribbean and the Middle East. He can be reached via email on bobby@matryzel.com or via voip on +1.302.525.2593.

THINKING DIFFERENTLY By Michael F. Corbett

New Ideas for Taking on Globalization’s Toughest Challenges NEVER CONFUSE EFFORTS WITH RESULTS From 1998 through 2001, I had the pleasure of serving on the board of Morrison Management Specialists, an Atlanta-based food services company that today supports over 800 hospitals and senior living communities in 41 states. The CEO I worked with at the time, Glenn Davenport, had a great business philosophy that has really helped shape the company’s extraordinary success— never confuse efforts with results. As I was thinking about this inaugural column for Globalization Today— IAOP’s brand new publication for people on the leading edge of reshaping the global economy—this simple phrase kept coming back to me. I believe many of the challenges we face in globalization (and business in general) come from a failure to do just that–separate efforts from results. THE FTE TRAP Contracting for FTEs as opposed to business outcomes is one of the biggest traps that comes from failing to separate efforts from results. FTEs, wage rates and transaction per FTE dominate our thinking. But these are all efforts, not results. The results we seek are more likely to be a great customer experience and business growth. Of course, it’s easier to measure and manage efforts—efforts are under our direct control. And after all, it is important to demonstrate that we did what we said we were going to do, and that we did it well. There’s nothing wrong with that. And on the other hand, we really can’t manage results, can we? We can measure them, we can manage “to them,” but in the end the complexity of the variables that caused us to either achieve or fail to achieve the desired results are much harder to get a handle on. But that’s actually the beauty of not confusing efforts and results. It forces us to constantly reevaluate, rethink, reinvent and even reenergize the way we’re doing things. CONTRACTING FOR RESULTS A few years ago the CIO at DirecTV spoke at IAOP’s Outsourcing World Summit and talked with great passion about his company and its strategic outsourcing relationship with HP. While HP certainly provided a robust set of IT operations and application testing services, it was the way the strategic relationship was laser-focused on results that set it apart. Instead of being compensated based on the services being performed (i.e. efforts), HP’s compensation was tied directly to the number of DirecTV subscribers (i.e. results).

Michael F. Corbett is the founder, chairman, and chief strategy officer at IAOP. He believes it’s time think differently about the world we live and work in.

Focusing the relationship around the client’s desired business results—a growing subscriber base—had a dramatic impact. Conversations between the companies were not about the work being done and what it cost, but about how best to achieve the shared results. Efforts became a means to an end, not the end itself. SEPARATING EFFORTS FROM RESULTS = DISRUPTIVE TECHNOLOGIES As this issue’s feature article on “10 Trends for 2010” points out, cloud computing and Software as a Service (SaaS) may well represent the first truly disruptive technology in outsourcing’s history. Taking business processes to the cloud by creating highly-trusted, robust and tailorable platforms will redefine how businesses operate globally. New companies, ones we don’t even think of as being in the outsourcing space today, are likely to dominate in this new world. But how do these kinds of disruptive technologies emerge? They emerge because someone somewhere completely disconnected the efforts and results. They found a completely new way to achieve the result—one that had little or no basis in the current thinking about “how” to do something. That’s exactly what makes every disruptive technology so disruptive—and only people who are not confusing efforts and results are able to see them. What do you think? Email me at michael.corbett@outsourcingprofessional. org with your thoughts about the power and challenges of separating efforts from results, examples you have of applying these ideas to what you do, or differing thoughts and opinions you have. Also, let me know about examples of thinking differently on any aspect of globalization and business that you’d like to see explored in a future column.

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IAOP At-A-Glance

IAOP: Better Deals, Better Results The International Association of Outsourcing Professionals™ (IAOP™) is the global standard-setting organization and advocate for the outsourcing profession. Our members lead global efforts to improve business results through outsourcing, offshoring, shared services and the entire spectrum of flexible resourcing solutions.

IAOP Membership Benefits Research IAOP offers a comprehensive research agenda geared not only toward today’s best practices, but tomorrow’s next practices. Members gain access to a continuous stream of unbiased reporting. Member Networking & Knowledge Sharing Member networking and knowledge sharing is facilitated through IAOP’s global chapter structure, its online member communications network and member-to-member matching through its online member directory. Cutting-Edge Conferences IAOP’s Outsourcing World Summit®, regional and topical conferences are in-person, interactive opportunities to dialog with other professionals from a wide diversity of experiences, creating a melting pot of ideas. Participation – included with all IAOP Corporate Memberships – gives you the information needed to do your job. Professional Standards, Training and Certification IAOP’s Certified Outsourcing Professional™ (COP) program is the de facto standard of professional excellence across the industry. Certified professionals produce better outcomes; have greater influence; are more highly regarded, respected and coveted; make better partners; and are validated and supported in their careers. The COP Master Class and other IAOP-exclusive training programs provide an affordable way of ensuring that your team has the skills it needs to make outsourcing successful. Identifying the Best-of-the-Best The Global Outsourcing 100™ is IAOP’s annual ranking of the world’s best outsourcing service providers and advisors. A rigorous, independently judged process establishes a benchmark to help your company save time and money by quickly connecting it with the right partners.

IAOP Membership Levels Professional Membership gives individuals access to their peers and the latest outsourcing information — 24hours a day, all around the world. Member discounts make participation in all of IAOP’s programs and services more affordable. Customer Corporate Membership makes a company a better buyer of outsourcing services. It provides access to exclusive member-only services, participation and input to the association’s research agenda and company wide support for its outsourcing program and professionals. Provider/Advisor Corporate Membership allows companies to showcase their commitment and capabilities to IAOP’s global network of influencers and buyers. In an industry that demands continuous learning and exceptional reputations for excellence, IAOP membership positions your company as a leader. For information on IAOP Membership, please email sales@outsourcingprofessional.org.

RESPONSIBLE CAPITALISM By Ron Babin

Social Responsiblity in Global Outsourcing

lobal outsourcing is an unstoppable trend, driven by economic efficiency and enabled by low-cost ubiquitous information and communications technology (ICT). Indeed, in the last two decades, business and IT outsourcing (BPO, ITO) have moved from a risky, radical strategic move to an expected operational consideration. Organizations are now able to plan and execute outsourcing arrangements with the assistance of experienced professional advisors and with the support of professional organizations such as the International Association of Outsourcing Professionals (IAOP). A body of knowledge is taking shape, reflecting the codified experience of thousands of outsourcing arrangements. Regarding outsourcing, instead of asking “Why?” corporate executives now ask “Why not?” and “How soon?” However, while business outsourcing has grown, so too has the overall expectation for Corporate Social Responsibility (CSR). CSR is a broad topic, including issues such as worker health and safety, community involvement, philanthropy and environmental responsibility. Several governments have legislated requirements covering many CSR issues. But the global CSR legislative framework is neither consistent nor uniform. As many outsourcing buyers have found, lower wages in far-away places often go hand-in-hand with more lenient social responsibility requirements. At the same time, outsourcing can be seen as a mechanism for distributing wealth on a global basis. Surely the global economy and global society benefit when wealthy developed nations pay for outsourced business and IT services from developing nations, providing training, education and middle-class jobs. The ITO and BPO industry can learn from other industries where work has been exported to global locations. For example, the garment industry faced stinging criticism and consumer backlash when it was revealed how low-cost child labor was used to produce expensive clothing. The outsourcing industry may be more immune to consumer advocacy, but sooner or later we all speak with the tech-support person in another country when we install home software or configure our latest office gadget. Recognizing the growing need to address CSR in outsourcing, the IAOP commissioned a study of this issue with its members. The results are being presented at the 2010 IAOP Outsourcing World Summit. The study brought in opinions from over 170 buyers, providers and advisors in the global outsourcing industry. On a five point scale, both outsourcing providers and buyers rated CSR at 3.9 (see Chart 1). Seventy-one percent of the respondents indicated that CSR will grow in importance over the next three years, and 70 percent are taking action to improve their CSR performance (see Chart 3). The larger outsourcing providers have already taken strong steps towards CSR, implementing formal mechanisms such as the Global Reporting Initiative and the UN Global Compact. The IAOP CSR study found that small and medium-sized providers have the strongest intention to increase CSR capabilities in the next three years.

Ron Babin Associate Director, Ted Rogers School of IT Management, Ryerson University rbabin@ryerson.ca

The importance of CSR in outsourcing cannot be understated. Customers consider CSR in over 60 percent of their outsourcing decisions (see Chart 2). In particular, customers told us that 30 percent of the time they always or often consider the CSR capability of the provider when making an outsourcing decision. An additional 34 percent of customers sometimes consider CSR in an outsourcing decision. In field interviews, customers told the research team that they look for a fit with their cultural values: if the customer places a high value on CSR, they expect the same from their outsource provider. CSR is growing in importance in all businesses, and therefore in outsourcing. In terms of CSR priorities, Table 1 presents the relative order of importance for CSR topics among those surveyed. Interestingly, Community Involvement–which involves philanthropy and support for community activities (education, sports, arts, etc.)–is relatively low, about half as important as the top issue of Labor Practices. TABLE 1 – CSR PRIORITIES

CSR Topic

1. 2. 3. 4. 5. 6.

Labor practices Fair operating practices Human rights Consumer issues Environmental issues Community involvement

Percentage of customers who include this in CSR evaluation of provider 59% 54% 46% 44% 42% 29%

Environmental responsibility may be of particular interest because of the growing issue of global warming. ICT is responsible for approximately 5 percent of national electrical power consumption. Additionally, the cost of power will continue to increase, possibly becoming the largest component of ICT total cost of ownership. In a related 2008 research study, we found that customers have placed environmental issues higher as they embrace “green” outsourcing. Environmental issues may become the economic and CSR sleeping giant in the outsourcing industry. Our research on CSR in Global Outsourcing will continue, and we will provide regular updates through this column. For more information on the IAOP survey, please contact the IAOP CSR sub-committee at www.outsourcingprofessional.org. For more information about CSR research, please contact the author at rbabin@ryerson.ca

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THE ROAD AHEAD

Trends to Watch in 2010

s Nelson Farris, Director of Corporate Education at Nike, likes to remind people, “Our business (Nike’s) is about change, and you’d better be ready for it every single day.” To Nike, being ready for change has always included recognizing that they couldn’t do anything by themselves; but that with help of the right strategic partners, everything is possible. Now, unless you’ve been hiding under a rock or lost on a desert island for the past 18 months, there is no need to recap here the types of change we’ve seen. But according to Farris, these changes have only come to strengthen the company’s core belief that the key is to “Work with the best because they will teach you and force you to become good. “ As a result, Nike continues to expand and strengthen its strategic partnerships—its outsourcing programs. THE “TOUGH TIMES” TEST For better or worse, we often learn more about ourselves and the wisdom of our decisions in tough times than we do in good times. As an executive I once worked for pointed out years ago, tough times are very much like placing a delicately crafted ceramic vase in a kiln—it either hardens into a beautiful work of art or cracks under the intense heat. In much the same way, recent events have tested outsourcing as a management tool and as a profession. The economic crisis, changes in technology, political power shifts, rising environmental concerns, and general uncertainty have all led to a fundamental retesting of the assumed role of outsourcing and of the outsourcing professional. Is outsourcing a tactic that has run its course, or a fundamental organizational shift? Are service providers really “strategic partners” as Nike believes, or are they merely outside vendors whose success or failure is of little concern to the customer organization? Can companies outsource and be socially respon-

GlobalizationToday March 2010

sible? Is outsourcing a new profession—like accounting, human resources, information technology, purchasing and others? Has globalization run its course, with most of the opportunities already gone? TITANIC STRUCTURAL SHIFT CONTINUES To help answer these questions, IAOP is constantly surveying its global membership to understand how companies are adapting their use of outsourcing to today’s realities. Based on what we’ve learned, we now believe that outsourcing will not only continue, but accelerate in the year ahead. One of the strongest indications of this is a comparison of data collected from member organizations last February—at the height of the global economic meltdown—to what we found just this past fall. Companies are certainly cost conscious, and over this period the percentage of organizations renegotiating outsourcing prices has almost doubled. No surprise there. At the same time, however, the percentage of companies that have increased the volume of work outsourced or the scope of services being outsourced has almost tripled. Even more telling, 71 percent of our members report that they will continue or further expand their use of outsourcing in the year ahead. Providers are seeing the same thing. For the companies that applied for inclusion in IAOP’s annual Global Outsourcing 100—a ranking of the world’s best outsourcing service providers—revenue in 2009 was not down, but actually up 5 percent. Not a banner year for an industry that has consistently seen double-digit growth, but still impressive in the midst of the first global recession since World War II. The bottom line? Outsourcing has been tested in a period of unprecedented turmoil and is expanding, not contracting as many might have forecast.

THE ROAD AHEAD

WHAT ELSE MIGHT WE EXPECT IN 2010? HERE ARE TEN TRENDS TO WATCH DELAYED DEALS GET THE GREEN LIGHT

While the economic downturn had put many outsourcing deals on hold, companies are now forging ahead with renewed confidence in the stability and growth of economic markets. “Although pricing will continue to be under pressure, outsourcing deals that were frozen will begin working their way through the sourcing and RFP process, leading to some significant new outsourcing activity in 2010,” says Danny Ertel, Certified Outsourcing Professional (COP), partner of Vantage Partners of Brighton, MA and chairman of IAOP’s Governance Chapter. Additionally, many organizations are seeking more bundled, knowledge-based opportunities, especially when they are looking offshore. According to data collected by Dr. Arie Lewin at the Offshoring Research Network (ORN) at the Fuqua School of Management, Duke University, almost a third of all outsourcing initiatives today are for research and development, product design and engineering services (16 percent), knowledge-based and analytical services (12 percent), and legal services (3 percent). A far cry from the traditional view of outsourcing as being for low-skilled repetitive tasks such as call centers, data entry and other back-office operations. Not only are these initiatives getting the green light, but speed limits are being removed as well. “The majority of investments will need positive ROI within the fiscal year,” says Jay Kerley, Deputy CIO of Austin, TX-based Applied Materials. “As a result, lead times and planning cycles will be short.” Similarly, 50 percent of IAOP’s members recently reported that immediate cost savings was a key driver of today’s outsourcing deals. This may be quite a shock to an industry where at one time large deals could take a year or more just to plan—let alone implement, get online and begin to show a return. Since many industry participants have complained for years about the excessive time and costs involved in planning and implementing large outsourcing contracts, this should come as a welcome change.

DESPERATELY SEEKING VALUE

“We are seeing a lot of clients re-evaluating the business cases for outsourcing,” says Patrick McArdle, global leader for shared services and outsourcing advisory services at PricewaterhouseCoopers in London. “More are demanding flexibility, savings and innovation from their providers.”

In addition, IAOP members believe preparing for future growth is critical. Another trend identified by Atul Vashistha, Chairman, Neo Advisory, Inc. of Pleasanton, CA, is systems integration led by standardization and migration to common global processes. “Simplify is the new buzzword,” Vashistha says. In total, the value proposition around outsourcing has been reshaped significantly by the events of the past couple of years. At the same time, the tremendous pricing pressure on outsourcing deals in 2008 and 2009 is leading some companies to realize that deep pricing cuts have damaged the business value that outsourcing brings. Providers and customers are beginning to re-negotiate contracts more collaboratively, based on the total value beyond price to regain innovation and flexibility. “As we put the worst of the economic downturn behind us and begin to move back to ‘normal,’ companies will have to think about having agility and innovation in their businesses,” Ertel says. “Outsourcing service providers that haven’t re-negotiated contracts also will be more proactive to renew with customers.” Providers can be expected to approach their customers and say, “Let’s talk about renewing and extensions.” Providers will want to renew and extend with existing customers rather than have them go back out in the market and seek lower rates. To do that, providers will have to also get creative about what they have to offer their customers. FLEXIBILITY TO GET OUT OF CONTRACTS

When customers talk about flexibility today, they also mean the flexibility to get out of contracts. Again, this is rare in an industry where providers invest enormous resources to win the business and even more to ramp up their ability to deliver for the client. Large investments like these have always meant reasonable guarantees that if the provider is meeting its contractual obligations, it can count on being able to recoup its costs and more. But with uncertainty still surrounding the economy, companies will hesitate to make long-term commitments with outsourcing service providers because of fear of the unknown. “The looming economic uncertainty will lead customers to seek shorter term contracts, inflation indexing, currency exchange protection and volume band relief,” says Jagdish Dalal, COP and IAOP’s managing director of thought leadership.

UNCERTAINTY LEADS TO CONSOLIDATION

Global economic uncertainty, currency fluctuations and other market forces will encourage increasing levels of mergers and acquisitions on a global basis among service providers. It’s already happening. EDS, which many credit with creating modern-day outsourcing in the technology space, is now part of HP. Perot Systems has been acquired by Dell, and ACS recently became part of Xerox. Dalal believes the result will not only be bigger players, but better service. “This consolidation of outsourcing providers will drive higher value services and continue to put pressure on other players to be more strategic in their offerings.” Big losers here may be what the industry traditionally calls its Tier 2 players—companies that lack the size and scope of the largest players, but who have in the past successfully won good contracts with good customers. If the gap between these Tier 1 and Tier 2 players continues to widen as some predict, the Tier 2 players may increasingly find themselves at a disadvantage, especially given tighter margins and increasing customer expectations. According to ORN research, the number of providers for many services has grown faster than the number of companies seeking those services, creating an obvious imbalance and yet another factor that will help fuel future consolidations. Accelerating this even more is a growing trend for customers in the financial services industry to continue to divest themselves of their company-owned captive offshore operations and turn them over to the large international providers as part of long-term services contracts.

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According to IAOP’s Global Outsourcing 100

gins,” according to Neo Advisory’s Vashistha.

recognized, of which IAOP’s COP (Certifi

It’s not just new players that are emerging

provider’s global delivery capabilities to provide

rials’ Kerley sees cloud computing off

sourcing’s history.

Companies, and chair of IAOP’s Global Human

So there they are, IAOP’s 10 trends to watch for in 2010. As an industry and profession on the leading edge of change, it’s going to be an exciting ride with lots of unexpected twists and

sociation’s membership believes that corporate than they outsource, so we can expect to see continued expansion of outsourcing’s impact and Many of the industry’s leading providers

ranked high on IAOP’s Global Outsourcing

RECRUITMENT PROCESS OUTSOURCING

BUSINESS PROCESS OUTSOURCING

CONTINGENT WORKFORCE OUTSOURCING

THINK STRENGTH.

strength to grow with As you press through the past year’s uncertainty and look forward to the coming business upturn, partner with a company that’s still standing strong. The RPO practice of Kelly Outsourcing and Consulting Group has been honored for the past six years by HRO Today as a leader in enterprise-wide RPO solutions, including recognition on the 2009 Global RPO Leaders list. Backed by more than 60 years of experience from our parent company, workforce solutions leader Kelly Services , you can be assured that we are well positioned to help move your business forward now and for years to come. ®

HUMAN RESOURCES CONSULTING

CAREER TRANSITION & ORGANIZATIONAL EFFECTIVENESS

EXECUTIVE SEARCH

RECRUITMENT PROCESS OUTSOURCING

BUSINESS PROCESS OUTSOURCING

CONTINGENT WORKFORCE OUTSOURCING

HUMAN RESOURCES CONSULTING

CAREER TRANSITION & ORGANIZATIONAL EFFECTIVENESS

EXECUTIVE SEARCH

ADVE R T I S EM ENT

developing relevant recruitment strategies for 2010 By D. Zachary Misko, Global Director, KellyOCG Now more than ever, the ability to develop and deliver an effective recruitment strategy is imperative. Candidate lifestyles have changed dramatically over recent years and many companies are still behaving as though it is 1985. Candidates and people in general are on the go and using technology in ways we never imagined. Social relevance, personalized experiences, and transparency in activities and communication are prevalent in this wireless, inter-collaborated world we now live in. The days of help wanted signs and newspaper job ads have passed, and now people with media power and large advertising budgets are competing against no or low cost methods like a blog or webcam to post information. The mindset of a recruiting department needs to move from developing processes and tools to screen people out, to embracing today’s media tools to focus on inviting the right types of profiles in. This can include better analyzing a career web site, how it is indexed, the verbiage used for web engine crawlers to tag, and RSS feeds that allow potential candidates to opt-in to receive information when it is convenient. Organizations should evolve their mindsets to opening their virtual doors to allow people to get to know them. If they don’t, bloggers, tweeters, and other Internet groups will do this for them, which can have positive or negative results. This being considered, it is crucial for you to evaluate the tools in your recruiter’s toolbox, remembering it is not about the quantity of tools you have. Understanding and effectively utilizing the tools is much more important. A lot of people are talking on the web today, but are they listening to you? Here is my top 10 list to keep in mind for your 2010 recruitment team. 1. Use niche web sites. Many of the general job boards have become flooded with résumés, often taking more time to review and not focusing on any one industry. Niche sites give you a better chance of targeting that passive industry expert you’re looking for. 2. Make social media—Facebook®, XING, and MySpace® to name a few—a part of your toolbox. Find the one that works best for you and ensure you manage that one site properly, contributing to communication and updates at least daily. 3. Set up a company or recruiter-specific LinkedIn® profile, and regularly update the profile with information about your company and culture. You can also use the events feature to inform people when you will be at job fairs and industry events. 4. Author or sponsor industry-specific white papers, post them to your web site, and link to these when advertising and communicating in blogs, social media, etc.

5. Develop and present webcasts that showcase your company and culture, product, or a best practice. Thought leadership demonstrates a good place to work and gets people interested in what you are doing and saying. 6. Blog where potential candidates and industry experts are listening. Use microblogs like Twitter™ to communicate with people. 7. Automate your sourcing efforts with web tools and products to allow your recruiters more time to communicate directly with candidates and their hiring managers (e.g., TalentSeekr™). 8. Revisit and use your own applicant tracking system (ATS). Many companies have a great database readily available and neglect to use this as a sourcing tool. Oftentimes, previous candidates not qualified for one position may be qualified for a current opening, and candidates you don’t remember or never talked to are uncovered in effective searches. Do you have or use a CRM tool? 9. Join online groups and participate. Be seen as an industry expert and get people interested in what you have to say. Depending upon the forum, the recruitment team may wish to engage help from the operations or management team to speak more specifically on industry topics. Doing so is a great way to feature your employees as thought leaders and industry experts. 10. Build a passive candidate database through online searches and use of sites like resumeblaster.com or resumezapper.com, to name a few. Although the Internet can be overwhelming, a sourcing toolkit should be tight but effective. And remember, it’s not the tools that make the difference in a sourcing toolkit; it’s the expertise of the people who use those tools to attract the right talent for an organization. When combined with energizing recruitment marketing/messaging (e.g., the story you want to tell candidates about your organization) and fluid processes and technology, an experienced and effective sourcing team can position you for success. D. Zachary Misko is Global Director—Recruitment Process Outsourcing for Kelly Outsourcing and Consulting Group. Zachary works with Fortune 500® companies throughout the world to develop and implement processes that improve and drive recruitment and retention solutions. He was named to HRO Today magazine’s annual list of “HRO Superstars” as a Provider Superstar for 2010.

THE PHILIPPINES

OUTSOURCING TO THE PHILIPPINES – THE MISSING PIECE FOR BUSINESS SUCCESS By John Jonas

As an entrepreneur, I know what’s involved in running a business. The work never ends, and the hours can be long and grueling at times. But thanks to an unusual twist of fate about two and a half years ago, I discovered a way to literally replace myself. Now I work only as much (or as little) as I want, while the bulk of my business is taken care of by my guys in the Philippines. If you’re a small business owner or a business professional who’s ever wished there were two (or more) of you, let me tell you my story…. How it all started….

’ve been working out of my home, running an online business, for a few years now. My business had been doing fairly well, but I was putting in a good 40 hours or more a week, so in many ways it was still like a regular job (although the commute is much better!). But when my wife was 7 months pregnant with child number 3, the doctor gave us some grim news. My wife was diagnosed with preeclampsia and we were told that if she did not get some much needed bed rest for the next several weeks, she and the baby could die!

GlobalizationToday March 2010

THE PHILIPPINES

As a husband and father of two with another on the way, you can imagine the jolt of fear those words sent through me. I loved my wife dearly and certainly didn’t want anything to happen to her or our baby. But I had no idea how I was going to take care of her, our children, the household AND run my business so I could continue to support my family. Not only that, I had just released a new software product. The demands on my time just from my business alone were more intense than ever. As I was processing the doctor’s news and simultaneously wishing I could somehow clone myself, I had one of those light-bulb moments which totally changed the direction of my life and my business. In fact, it was the beginning of an entirely new way of thinking about business altogether. TAKING OUTSOURCING TO A NEW LEVEL…. I sat down and wrote an email to send to the 3 guys in the Philippines who had already been doing some work for me for quite some time. I had already trained them to do various things; now I needed them to do everything – to run my entire business for me so I could focus on my family for the next several weeks. In the email I told them I wasn’t going to be able to work for a few weeks and that I would need them to do it all – from taking care of any website issues, filtering my emails, taking care of my blog, to managing my AdWords account. Literally every aspect of my business! And they stepped up to the task…beautifully. They did such an excellent job that I was able to take care of my wife and children, as well as our new baby when she arrived, while spending no more than an hour each week on my business. I’d quickly gone from a regular 40 hour work week to a one hour work week – all thanks to outsourcing! It dawned on me during that time, “This is the missing piece!” TESTING THE POSSIBILITIES….. For 3 months I worked no more than an hour a week. And that time was merely spent responding to my employees. Keep in mind, they had been with me for about 18 months already, so this wasn’t some magic bullet. I didn’t just hire them one day and have them take over my business the next. There is a process involved, which I will discuss a little later. When it was time for me to return to work, I decided to do an experiment. I wanted to build and run a business based around using my guys in the Philippines. Being an internet marketer already, I decided to start with an affiliate business. I chose the niche, bought a domain name, and sent it to one of my employees. He created a WordPress website, changed the theme, and set it up on my hosting. He also wrote all the web content including product reviews, set up an AdWords campaign, did the SEO, article marketing, video marketing, social bookmarking, and so on. I guided him through the process, but he did all the work! Well, that particular business went from making $200 the first month, to nearly $8000 a month within 6 months. Today, it is making between $10,000 and $15,000 a month! And the best part of it….it’s work I didn’t do myself! I provided some guidance and instruction, but I didn’t have to do all the tedious tasks involved. BACK TO THE PRESENT… Today I employ 8 Filipinos full time. I choose to work about 17 hours a week, which is just right for me. One hour a week just wasn’t enough. But I do have the luxury of taking all the time off I desire. By leveraging the power of outsourcing, I am able to spend plenty of time with my wife and children, and do the things I truly enjoy.

Since all this happened, I have been teaching others how to outsource by hiring individuals in the Philippines. But before I tell you more about that, let me quickly cover some other key points about outsourcing, including why you should outsource only to the Philippines. MISPERCEPTIONS ABOUT OUTSOURCING – WHAT THIS ISN’T…. One thing I have learned since I started outsourcing the bulk of my business is that there are a lot of misperceptions when it comes to outsourcing, and it’s completely understandable. You may have had the experience of calling the customer service number of a large company, like AOL, only to have a person answer the phone whose accent is so strong you can barely understand him or her. That’s because many large businesses outsource their customer support to workers in India. That is not what this is about. Don’t get me wrong, India is a beautiful country with wonderful people, but their culture is very different and thus they think very differently than Americans, which creates problems when it comes to outsourcing. With regards to outsourcing, you may have heard of website owners or small business owners outsourcing web design, content writing, or copywriting to someone on a site such as Elance.com or Guru.com. That’s all fine and there are many very talented freelancers to be found there, but that isn’t what I’m talking about here either. That’s contract work and you won’t benefit from training them. In fact, in my experience, using freelance sites is what prevents online entrepreneurs from making 6 figures a year. Also, I am not talking about hiring a $15-per-hour headache here in the U.S. Hiring employees here often means as soon as you train them to do something they quit to go on to something bigger or better. And you’ve received little for your investment. You may be concerned that when people use outsourcing they are sending valuable jobs overseas. The harsh reality is that most small business owners simply can’t afford U.S. based employees, particularly in this struggling economy. HIRING FILIPINOS – PROS AND CONS One of the reasons outsourcing has been so successful for me, as well as for the thousands of people to whom I have taught my methods, is because I hire individuals only from the Philippines. And, based on my experience, there are many reasons they are the perfect choice when it comes to fulfilling your outsourcing needs. In fact, I really can’t speak highly enough of the ones whom I have hired. Please keep in mind, none of these statements are based on hard facts, but they are based on my consistent experience as well as the experience of those I have trained.

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THE PHILIPPINES

PROS • Filipinos are extremely loyal. Once they start working with you, it is highly unlikely they will ever quit. In fact, they really like working for an American – it is prestigious for them to say they work for someone in the U.S. – it elevates their social status so they like telling others. Because they stay with you for the long run, you don’t have to keep training new people to replace ones that quit. If you hired U.S. employees, you’d be replacing them all the time. So this is an excellent longterm business solution for you. • They are very honest (in my experience). I trust my guys with my credit card number, my bank account information, my PayPal account information, the login information to my hosting account and email account. They also have my home address. The only thing they don’t do is pay themselves. If there are issues or problems or whatever, they are super honest with me. • They are very inexpensive. The cost of living in the Philippines is considerably less than here in the U.S. and many other countries. You can easily hire a Filipino full time for somewhere between $200 to $450 a month. While that may seem like incredibly low pay here, for someone in the Philippines, that is a nice, middle class income. So it truly creates a win-win situation. • Often their salary requirements are negotiable. • Most of them are very intelligent and well educated, with at least a Bachelor’s degree. • Not only do they speak English exceptionally well, they speak American English. If you hired someone from the Philippines to handle phone calls for you, no one would have a clue they were speaking to someone in the Philippines. With most other countries, you can tell you are speaking to someone outside the U.S. Also, excellent English is crucial because the majority of tasks require good English skills. • They are super hard workers. If they don’t get it right the first time, they are diligent in keeping at it until they do get it right. They want to please you because they want to keep working for you. • They are very westernized. This is great when it comes to outsourcing, because, unlike outsourcing to a country like India, for example, Filipinos think like we do. So, you will find that when you have them work for you, they will do things very similarly to the way you would do it yourself. • As a general rule, they are not entrepreneurial. This will give you peace of mind when you hire them because you don’t have to worry about training them only to have them take all they learned and go start their own business. Again, they are very loyal and value their job with you so they won’t do anything to jeopardize that. • They all have computers and an internet connection. • You don’t need to travel to the Philippines to set up an office for your employees there. They work from home and you can do just about everything via email and Skype.

GlobalizationToday March 2010

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• • • • • • • • • • • • • • • • •

• • • • • • • • • • • • • •

THE TASKS YOU CAN HIRE THEM FOR ARE PRACTICALLY ENDLESS. YOU CAN HIRE THEM TO DO: Article directory submission Social Networking Forum posting Blogging Social networking Video marketing Blog commenting Web 2.0 Graphic design Report writing Transcription Editing Investment banking analyst Affiliate marketing AdWords / PPC Software tools Info product creation (e.g., eBooks) (Just a note, the ones I outsourced to the Philippines were better than those I had done by people in the U.S.!) RSS Video marketing Search engine optimization (SEO) Copywriting Press release writing Archiving and / or filtering emails eBay Link building Email marketing Phone support Content and article writing Programming / PHP Web design And much more……………..really, anything you can train them to do, they can implement and do for you.

Just a note…if you have an online business, the top 7 tasks are the ones which will give you the greatest return on your investment when you outsource them.

THE PHILIPPINES

CONS There are really almost no negatives when it comes to outsourcing to the Philippines. But two things do come to mind which you should keep in mind before you decide to hire a Filipino: • They have frequent power outages, which of course interrupts their internet connection. But in my experience, they are always willing and eager to make up the time to stay on schedule as much as possible. • There is a significant time difference (11 to 14 hours) from the U.S. You could have them work at night so they are on the same time zone as you, but, in my experience, this tends to lower their productivity, so I don’t do it. I give them recurring tasks so they don’t run out of things to do. WHY YOU SHOULD OUTSOURCE – THE BENEFITS OF OUTSOURCING When you begin outsourcing all the menial, tedious tasks, you will quickly find it is very liberating. For me, as a former computer programmer, I was a bit hesitant to outsource any programming to my guys. But, when I finally did so, I felt an incredible sense of freedom. I was no longer bogged down with all those coding details…all those programming issues were now someone else’s problem! Once again, I had replaced myself….and it was really a great feeling. I firmly believe that to truly succeed in your business, you need to be the CEO – what I call a “knowledge worker”. If you are the one trying to implement everything yourself, you’re falling behind. You have an incredibly educated brain, and you’re wasting it! Instead, focus on understanding your business goals and how to get your business there – outsource the actual tasks to someone else. The key to success is not necessarily doing what you’re best at, which is what conventional wisdom dictates, but rather do what makes you money. Programming, writing, Web 2.0, etc. aren’t what make you money. Making sales is what makes you money! Outsourcing allows you to work on your business, not in your business. Besides the endless list of things which you can outsource (listed above), and the low cost, there are several other benefits of outsourcing your work to the Philippines: • The money you pay your employee in the Philippines is a tax deductible business expense. • You don’t have to worry about paying for health insurance or other benefits for your Filipino employees. • This is not a freelancer or a contract worker; you’re not hiring someone to do a single project. This is a long term business investment. • After tax savings, your employee will cost you less than $200 a month – full time! • As you teach them everything about your business, they can run it for you in the future, giving you the freedom to do what you truly enjoy, whether that is taking time to travel, spending more time with your family, playing golf, volunteer work, or building more businesses. You get to decide how to spend your time, while your business continues to make you profit.

HOW YOU CAN LEARN HOW TO DO WHAT I DO…. As you might imagine, as my business success was increasing, people started asking me if I would teach them how to use outsourcing to benefit their own business. So, I began teaching people. To date, I have taught thousands of people how to implement my outsourcing methods. Those who actually use my methods are having great success. In fact, I was at a networking meeting some time ago with 18 other people. Out of those 18, 10 people had been using my outsourcing methods and were having great success with it – and they still are today. Outsourcing has truly changed the course of my business, as well as my life. And I hear from people I have trained nearly every day how it has completely turned their business around as well. If you truly want to leverage your time to your greatest advantage, outsourcing is definitely the way to go. The return on your investment will be well worth every penny! RESOURCE BOX: John Jonas does a lot of his teaching via teleseminars and webinars. If you are interested in learning more about outsourcing, you can go to his website, ReplaceMyself.com, which contains a ton of free training. He also has a blog, JonasBlog.com, which contains information about various outsourcing methods as well.

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ADVERTORIAL

Outsourcing: A New Value Proposition The growth of outsourcing has been extraordinary in the 20 years since the ﬁrst deal was struck in 1989. Today outsourcing is a global market estimated to be worth more than $350 billion—a number that could top the $400 billion mark sometime in the next year. What will outsourcing look like during its third decade, and what will it mean to the competitive nature of organizations around the world? These are important questions for companies as they emerge from the current economic downturn. Outsourcing has not altered the fundamentals of business. But it has changed the way companies create and distribute value from and around those fundamentals. From its origins as a hardware operations play, outsourcing has moved with a kind of relentless logic up the value chain—ﬁrst to applications and software, and then to higher-level business processes and services. The next wave of change will take companies to important new territory: strategic value and innovation. Catching that wave, however, requires an understanding of how and why outsourcing has evolved to date, and the insight to see where the trajectory of value redistribution will lead. It also requires an improved ability to manage those evolving value streams.

Old rules, new rules In the late 1980s, after years of stagnation, the world’s economy was booming again and fundamental changes in the nature of competition were at hand. Companies like Microsoft and Intel were about to transform the technology world, for example, by breaking up or “disaggregating” the PC industry. Instead of relying on a single provider for most of a computing solution, customers could go with the best provider across the entire value chain. In this context, outsourcing can be seen as a disaggregation of the enterprise itself. Companies were beginning to focus more on their core competencies and get out of markets or functions where they could not compete at the highest level. If that was true, why not run internally the parts of the disaggregated business that remained core to value creation, but let an external expert run the parts that they excelled at?

Moving up the stack According to the value redistribution model, value is initially built up over time for any kind of product, technology or service; eventually, however, such value begins to diminish. The ﬁrst strategic function to experience the diminishing value of being run only internally was the hardware side of the IT shop.

By the early 1990s, however, leaders in the outsourcing industry knew that the key to delivering ongoing value was, in the vernacular of the industry, to “move up the stack”—higher up the ladder of business value. One of the next important rungs on that ladder was managing a company’s business applications. Running a company’s applications well would prove to redistribute value in a manner that was less ﬂeeting than a hardware play alone because it requires higher-order skills. This was really about running people, not running machines.

From IT to business processes If managing applications was actually about managing people, why couldn’t the skills from application outsourcing be transferred to the external management of business processes? In fact, the beginnings of this marketplace were already present with companies that performed transactions like payroll on behalf of clients; what needed to happen next was to improve those processes, not just perform them. Several companies became pioneers in the area of business process outsourcing beginning in the early 1990s.

New century, new goals The next challenge for outsourcing came from an unlikely source: the Y2K emergency. This work was too much for any single company or even nation to handle, so the answer was to take the work around the world—to areas such as India and the Philippines. This demonstrated that companies and outsourcing providers could source work wherever qualiﬁed people at the lowest cost could be found. All the pieces were now in place—industrialized and standardized methods, transition planning, more effective relationships and, now, deep experience with global sourcing—to move outsourcing in a more transformational direction.

Transformational outsourcing This transformation has taken several forms. First, clients and providers began pursuing more collaborative relationships capable of driving both cost savings and innovations. Second, companies and academics alike were led to reconsider the merits of sourcing to multiple providers versus a single provider. Recently, companies have begun to realize that the hidden costs of managing multiple providers are eating substantially into the value of the deals—and into the effectiveness of the overall collaboration. By combining or “bundling” functions and processes to a single provider, companies can generate signiﬁcant synergies resulting in both better cost savings and a greater impact on the business.

Redistributing knowledge What’s next? As always, outsourcing will continue to be driven by customer needs, and that will result in market-driven innovations and new types of value redistribution. Basic outsourcing is already being extended into other innovative applications such as product lifecycle management activities. Industry-speciﬁc outsourcing is also an important part of the future because it leverages the power of one-to-many platforms. As the global economy has become knowledgebased, so too has the outsourcing industry, and the next stage in value redistribution will involve nothing less than knowledge itself. The modern enterprise now has the ability to source, not only hardware, applications and services, but also knowledge and skills, anywhere in the world. Some of the knowledge needed to achieve competitive advantage in the future will remain internal to a company—distinctive intellectual property that drives new products and services. Other forms of knowledge will be sourced externally, opening up the walls of collaborative innovation to drive better ways of doing business. The time is coming soon when even the very word “outsourcing” will be obsolete. No one in the industrialized world thinks of grocery shopping, for example, as outsourcing their family’s food production, though that of course is exactly what it is. We simply procure food from reliable sources at the quality and price that we desire. That is where business strategy is now moving— inexorably. It’s an exciting time. This article is an excerpt from “A new value proposition,” which originally appeared in the October 2009 issue of Outlook, an Accenture publication. Used with permission.

You can read the full article at: http://www.accenture.com/ NewValueProposition About the author Kevin Campbell is group chief executive of Accenture’s Technology growth platform, with responsibility for all of Accenture’s capabilities and services across systems integration, technology consulting, application outsourcing and infrastructure outsourcing.

ADVERTORIAL

Outsourcing turns 20: Evolution of a business strategy 1970s/ 1980s Limited use of outside providers for discrete functions for payroll processing, accounting services and word processing. 1989

Eastman Kodak outsources its IT function.

1995

The Internet becomes a stable platform for distributed work.

C.K. Prahalad and Gary Hamel publish “The Core Competence of the Corporation”.

1996

1997

1998

1999

General Dynamics signs $3 billion, 10-year contract for IT outsourcing. 1992

1993

One of the earliest value-sharing deals made by the London Stock Exchange for IT outsourcing. PRA Solutions founded (renamed Navitaire in 2001) to provide outsourced revenue accounting and protection to the airline industry – one of the earlier industry vertical outsourcing solutions.

DuPont announces a major deal, the IT Alliance, to outsource both IT infrastructure and applications.

2000

2001

GE establishes GE Capital International Services (later called Genpact) as a captive services center in India. The “Y2K” problem forces companies to leverage offshore locations, especially India, to meet the December 31, 1999, deadline. Shared services models begin to mature, Proctor & Gamble establishes Global Business Services to provide high-value, low-cost shared services to the company’s businesses.

China begins to grow as an outsourcing delivery location in cities such as Dalian and Shanghai. BP contract renewal specifies risk/reward sharing and also identifies innovation as a goal of the deal. One of the earliest bundled outsourcing deals signed by Thomas Cook, covering IT, finance, payroll and HR administration.

2004

Bristol-Myers Squibb becomes the ﬁrst pharmaceutical company to take a bundled outsourcing approach – ﬁnance and accounting, along with application management.

2005

International Association of Outsourcing Professionals established.

2006

Unilever signs a seven-year agreement for bundled outsourcing of application and HR.

2007

Microsoft establishes new operating model for outsourcing ﬁnance and procurement functions; the so-called OneFinance program wins a 2008 “Most Strategic” award from the Outsourcing Center.

2008

Global IT outsourcing market approaches $250 billion.

Dow Chemical pioneers a co-sourcing model for application maintenance and development.

First major business process outsourcing deal signed by BP for ﬁnance and accounting. One of the ﬁrst application outsourcing contracts signed by Canada Post.

2002

Delivery approach at BP leads to a delivery center for the entire North Sea oil industry – leveraging centralized resources to serve multiple clients.

Global IT outsourcing market stands at between $9 billion and $12 billion. The reengineering movement gains momentum. (Michael Hammer publishes “Reengineering Work: Don’t Automate, Obliterate.”)

1991

Global IT outsourcing market hits approximately $50 billion.

Management guru Peter Drucker publishes, “Sell the Mailroom” in the Wall Street Journal, advocating having clerical, maintenance and support work done by an outside independent contractor. Outsourcing formally identiﬁed as a business strategy.

1990

1994

Entire outsourcing market stands at fewer than 150 deals.

Worldwide BPO spending grows 12 percent.

Beginning of growth of offshoring and business process outsourcing.

Outsourcing employment in India passes 2 million mark.

The ﬁrst BPO offshore/nearshore location opens in Eastern Europe; chemicals company Rhodia leverages delivery center in Prague. Accenture delivery center opens in Mumbai.

2010 and beyond New trends such as knowledge-based outsourcing (outsourcing of business, market or industry research) and legal-based outsourcing continue to redistribute business value.

PRACTICAL GLOBALIZATION WISDOM

SECRETS OF SUCCESSFUL OUTSOURCING PROFESSIONALS Continual technological, social and economic advancements propel us further into a global business world in which executives in Boise can teleconference with executives in Beijing. Entire departments now work remotely from home offices. And with the advent of freelance online employment markets, the ability to globalize is growing more accessible to businesses of all sizes.

he initial wave of globalization in the late 1990s and early 2000s was about taking advantage of lower labor costs in offshore destinations. With the advent of rapid, inexpensive transmission of data, businesses could leverage the time zone difference with India to achieve 24-hour workdays. But those opportunities were only the beginning. Today’s successful globalizers embrace a number of additional advantages to globalization which other not-so-successful leaders do not.

globalizers engage in similar practices—key practices that other companies can emulate. In my two decades of consulting with major corporations, I have noticed a set of seven best practices shared by firms which have succeeded in service globalization. What follows is an excerpt from my upcoming book on this topic, Globalization Wisdom: The 7 Secrets of Great Globalizers. Two secrets are detailed below. You can discover the remaining secrets at www. globalizationtoday.com.

Successfully implemented, globalization can shore up competitive advantage. Organizations can take advantage not only of lower labor costs, but also diverse intellectual capabilities, growth and quality enhancement opportunities, and the ability to get products to market more quickly. Successful globalizers are constantly looking for opportunities to improve—whether those opportunities present themselves in Michigan, Mexico, Malaysia, or anywhere in between. Much more than bottom-line labor costs and longer workdays, successful globalization means a more successful business, period.

By understanding the paths other organizations have taken to become successful globalizers, the learning curve on your own path will hopefully be shorter.

Some organizations and leaders have leveraged these opportunities successfully. Many have not. Not surprisingly, successful

GlobalizationToday March 2010

SECRET #1: EMBRACE GLOBALIZATION Successful globalizers understand that services globalization has come a long way from offshore outsourcing, and that it continues to evolve every day. As services globalization evolves, new opportunities arise. The reality, as Applied Materials GVP and CIO Ron Kifer sees it, is that a company can embrace, leverage and be a part of that globalization—or it can become its victim.

“It’s greatly important that global organizations understand we’re moving to a globalized economy and they have to have the flexibility to be able to do the work wherever the work is more cost-effectively done, and wherever the work is high-touch to the customer. That’s why we’re pushing globalization as a key strategic initiative in our organization,” Kifer explains. Flexibility—being open to new opportunities—leads to the first secret of successful globalizers: Embrace Globalization. Successful globalizers welcome services globalization into their organizations with open arms. They are constantly learning and constantly open to the new opportunities—and challenges—that the evolution of services globalization presents. Embracing globalization means looking at the big picture—considering every corner of the world as a potential sourcing destination, and thinking about the unique advantages and opportunities that each location offers. Model for Embracing Globalization

PRACTICAL GLOBALIZATION WISDOM real objectives,” Kifer says. “The real objective of a sound globalization strategy is to have a flexible workforce and global model and to realize that the markets, customers and competitive environment are going to change, which will require a company to maintain competitiveness to be able to do work in a different model in a different place over time.” AND THAT’S WHY SUCCESSFUL GLOBALIZERS EMBRACE IT ACROSS THE BUSINESS.

THE BASIC MODEL FOR EMBRACING GLOBALIZATION HAS FOUR COMPONENTS: 1) Embrace globalization across the business. 2) Ask which processes could be performed better elsewhere. 3) Mandate the globalization of processes that can be performed better elsewhere. 4) Keep an eye on the future. When the offshore outsourcing trend first caught hold in U.S. businesses, most firms saw it as an opportunity to reduce costs through labor arbitrage. But as the movement has evolved—as offshore outsourcing has become services globalization—companies have looked beyond cost considerations. In fact, flexibility is even more important than cost in services globalization. “If cost is your primary consideration, I think you’re going to fall short of meeting the

Bill Gates once said, “If we are not realistic about what we’re good at, then there is a chance of going backwards in the face of further competition.” In asking why each process cannot be done elsewhere, an organization must be realistic about which processes are core competencies and performed most efficiently in-house. There’s no room for egoism in this process. To survive, a business must be willing to strip itself bare, down to only those processes which are true core competencies. Every business function should be on the table for globalization until it’s clear a given function can be performed most efficiently in-house and domestically. Mandating the globalization of processes that currently cannot be done elsewhere is an important part of stripping an organization bare. Within a company, some people will resist globalization. Successful globalizers neither back down from that resistance nor tolerate it. Effective change management that secures top-level commitment and addresses points of resistance is a critical part of a successful globalization initiative. Companies must be constantly vigilant and always prepared to scrap the old way of doing business to take advantage of new opportunities. It used to be that this sort of flexibility made companies leaders. Today it is a business imperative. As Thomas Friedman wrote in The World is Flat, “If you want to grow and flourish in a flat world, you better learn how to change and align yourself with it.” Companies that have embraced globalization, including GE, Aviva, Texas Instruments, Google and Proctor & Gamble, have found large pools of productive labor in offshore destinations. But they have found something more as well: top engineering talent, attention to detail and quality, sophisticated mid-level and senior-level management, and even a level of brand identity and loyalty that rivals that of their domestic employees. The most successful globalizers are companies who have visionary leaders at their helms. Steve Bandrowczak, former Lenovo & Nortel CIO, says trying to succeed in globalization without visionary leaders is like trying to bake a delicious cake with stale ingredients. “I don’t care how you mix it,” he explains, “you’re going to come out with a bad cake.”

Visionary leaders—the pioneers of globalization—saw the big picture as it emerged: how the playing field expanded from the U.S. and Western Europe to encompass India, the Philippines, China, Ireland, Poland, Chile, Brazil, Russia, South Africa, and more. These leaders understood, even in the early days of globalization, that global sourcing would become a key competitive advantage. They saw that global sourcing could not only allow them to reduce their costs, but also grow more quickly, cut time to market, and even improve efficiency and raise quality levels. Embracing globalization is the first secret of successful globalizers, not because it is necessarily the most important, but because it lays the foundation for the six secrets that follow. SECRET #2: WELCOME GLOBALIZATION AS A TRANSFORMATION LEVER Business transformation is one way that great globalizers leverage services globalization to create competitive advantage. Services globalization should now constitute an important part of the strategic plan of any firm. As I have said before, if your three-year or even one-year business plan doesn’t include the globalization of services, throw it out and rewrite it. That may sound harsh, but in today’s competitive business world services globalization is no longer an option for a few elite companies; it is a business imperative for any company that wishes to survive and flourish, especially in this economy. As discussed in Secret #1, services globalization is much more than offshore outsourcing. It is the complete embracing of cross-border operations as a means to reduce costs, improve quality, and enable business growth. It is also a means for business transformation. And that’s the second secret of successful globalizers: Welcome Globalization as a Transformation Lever. Companies that welcome globalization in this way see it as an opportunity to do business differently. They use it to change everything from the way they keep in touch with their customers and launch new products to the way they treat their employees. Successful globalizers ask themselves: What can globalization do for my business in addition to reducing costs? How can I leverage it to build competitive advantage? And once they figure out the answer, they act quickly. THERE ARE SIX STEPS TO LEVERAGING TRANSFORMATION OPPORTUNITIES IN SERVICES GLOBALIZATION: • Generate solid leadership commitment. A successful business transformation—especially one as highly visible and potentially disruptive as globalization—requires the cooperation, buy-in and commitment of an organization’s employees, from the top to the bottom.

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n each edition of “VHCS Insights”, we’ll

vice center relationships. We’ll also be sharing

you contracted for or require given today’s answer is no, or I don’t know, you’re not alone.

rough IAOP’s relationship with GSOS, the What’s inhibiting organizations from tapping

3) Stakeholder’s comments are encouraged

He’s currently the President and CEO of Global

(IAOP), Chairman of the IAOP’s Outsourcing Tools

bers for a nominal administrative fee. If you’d

PRACTICAL GLOBALIZATION WISDOM • Develop a new organizational design and structure. Specifically, the organization must define the new roles for the global delivery centers and redefine the roles for existing centers— developing new operating models that account for new jobs and work structures, performance management systems and governance teams. • Collaboratively map out and execute change management. Here, change management involves helping existing team members become resilient, transfer knowledge, engage resource planning and communicate. • Communicate effectively. Effective communication involves planning for the human impact of the change and identifying potential points of resistance, as well as developing a plan to accommodate the impact and deal with the resistance. • Educate and develop new competencies. The education process should begin with the identification of training needs and development of a training curriculum for both the existing onshore and the new global organizations. • Redesign business processes to include automation, new onshore/offshore interactions, knowledge management, and other support systems. Sometimes process redesign involves thinking about business practices in an entirely new way. A few years ago, Electronic Arts (EA) began to realize that they needed innovation from outside the U.S. to address increasingly large client bases in Asian and European markets. They asked: How do we grow our business in Asia where the typical U.S. PC console model doesn’t work? Globalization, for them, was about addressing the market in a whole new way. Now they have facilities in China and India and leverage partners in Ukraine, Vietnam, China, India, Russia and other such locations. Plantronics CEO Ken Kannappan told me how he looks for the unique advantages that each potential location will offer. “Europe, for example, is at the forefront of Bluetooth® technology, so that’s where we develop those products. China is a far more cost-effective location for some processes, compared to California, so we have functions done there, too. It’s natural to get those competency centers where you can get a rich trove of talent for the most cost-effective process.” I heard similar stories from Yahoo, Oracle and Google engineering executives. Genpact, formerly Gecis, succeeded in its global business transformation initiatives in part because of the solid leadership commitment and buy-in that started with CEO Jack Welch. Gecis began in India as a small operation and became one of the largest offshore operations in the world. Early on, top-level

managers created a governance team with clearly defined strategic and tactical objectives. Eventually the governance team, still fully supported by top-level management, expanded its focus to include increasing the company’s operational complexity. It was that type of enduring commitment—combined with the leadership mandate handed down from the top—that allowed Gecis to leverage services globalization as a business transformation agent. HSBC Holdings plc (HSBC) is a good example of an organization that developed a new organizational design and structure in order to facilitate its global business transformation. Six years after opening its first offshore operating centers in China, HSBC had established offshore operations in ten Asian countries. This globalization was coordinated by a group called the Global Processing Team, which evolved from a small team reporting to the company’s UK Senior Manager for Personal Financial Services, to a strategic division of its own that reports directly to the Group CEO. Effective communication is the fourth critical step to successful business transformation. As P&G undertook global sourcing and transformation, they not only focused on effective knowledge transfer but also worked to ensure that 99.5% of their affected staff were placed with the outsourcers or alternate employers. Other firms such as Schneider Electric made sure that cultural training was done at both ends to enhance mutual understanding and collaboration. E-Loan found that by communicating openly and honestly, it built trust relationships with its clients and educated them on the benefits of services globalization. In turn, this allowed the company to reap the cost savings and other benefits it had envisioned for its global business transformation. In many cases, globalization provides a transformative opportunity to focus on core competencies. Group VP and CIO Ron Kifer explains that globalization allowed Applied Materials to transform his organization into one focused on core competencies and competitive value. “Services globalization provides us with the opportunity to take all those me-too capabilities that don’t add any value to the business and move them where they can be most effectively supplied, where we can take advantage of the more mature processes, metrics and capabilities of our strategic partners and refocus our entire internal team on real value-added core competencies,” he says. Because globalization increases the complexity of an organization’s business networks,

it is vital that those networks be optimally managed. Otherwise, the potential benefits of a global business transformation can easily be eroded by new inefficiencies. Through these six critical steps, many companies have undertaken successful business transformations through services globalization. What began as a purely cost-saving proposition has now proven itself to be a fully transformative lever—provided that organizations use it as such. If an organization goes into a globalization initiative with only cost savings in mind and does not take the six steps highlighted here, the company may or may not achieve significant cost savings, and likely will not see the other benefits of a full-scale business transformation. Successful globalizers, in contrast, take on a globalization initiative with cost savings and other benefits—perhaps improved efficiency, increased capacity and quality of service delivery—in mind. They expect globalization to be transformational. In the words of Andrew Grove, Former CEO & Chairman of Intel, “A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation.”

AUTHOR INFO Atul Vashistha is Founder & Chairman of Neo Advisory (formerly neoIT), a leading management consultancy focused on independent, objective and actionable advice to enterprises seeking to transform their organizations through globalization. He is also Founder of NeoGroup, a firm focused on providing outsourced management of revenue and supply relationships and governance. His latest venture is BestOutsourcingJobs.com, an online job portal focused on outsourcing careers.

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VALUE HEALTH CHECK

IAOP VALUE HEALTH CHECK SURVEY INSIGHTS Welcome to the first edition of the “IAOP Value Health Check Survey – Insights”, a monthly section in Globalization Today that covers the latest developments, findings and best practices from the IAOP’s Value Health Check Survey (VHCS) and the Global Sourcing Value Framework.

n each edition of “VHCS Insights”, we’ll be sharing the IAOP’s latest lessons learned and innovations in developing and sustaining high performing global sourcing relationships. We’ll also be sharing key industry-wide trends identified from IAOP Members and Non-Members use of the IAOP Value Health Check Survey. In this first edition of VHCS Insights, we introduce the Global Sourcing Value Framework and recently released IAOP member benefit, the Value Health Check Survey (VHCS).

GlobalizationToday March 2010

VALUE HEALTH CHECK INTRODUCING THE GLOBAL SOURCING VALUE FRAMEWORK: Regardless of whether your organization is an outsourcing customer or service provider, we encourage you to periodically ask yourself and your stakeholders the following question: “Are your outsourcing and/or shared service center relationships delivering the business value that you contracted for or require given today’s dynamic global environment?” If the answer is no, or I don’t know, you’re not alone. IAOP research and other industry sources confirm its likely that more than half of all business leaders today do not know if (or believe that) they are getting the business value they should from their existing portfolio of outsourcing and shared service center relationships. Given that there is an estimated $13 trillion dollars of existing outsourcing and shared service center relationships in force, there is huge opportunity to improve the business value from existing sourcing relationships. What’s inhibiting organizations from tapping into this lost or stranded business value? To date the outsourcing industry, its customers, providers, advisors and other key stakeholders have lacked a holistic framework and common approach for understanding, defining and measuring the tangible and intangible dimensions of “value” in global sourcing relationships. Not any longer! The IAOP, through a partnership with Global Sourcing Optimization Services (GSOS) recently introduced the “Global Sourcing Value Framework.” The Global Sourcing Value Framework is intended to help all stakeholders involved in outsourcing and/or shared service center relationships establish a solid foundation for collaborative discussion and alignment on the business value expected through outsourcing and shared services. The Global Sourcing Value Framework consists of the five key areas of business value in outsourcing relationships. The key areas, when optimized, typically result in higher performing and sustainable outsourcing relationships. The five (5) key areas of business value are: Financial Performance, Sourcing Capabilities, Service Quality, Risk/Compliance and Governance. By systematically assessing the key value drivers across each of these dimensions of business value, customers and service providers are able to quickly identify opportunities for value improvement and/or mitigate areas of potential value leakage. Our experience further suggests that sustainable, high performing relationships typically strike a dynamic balance across the key value drivers. These relationships consistently demonstrate a high degree of alignment in the priority of the value drivers and the perception of value actually realized from the relationship.

THE IAOP VALUE HEALTH CHECK SURVEY (VHCS) Through IAOP’s relationship with GSOS, the Association is also making available to IAOP Members and Non-Members an innovative new Outsourcing Relationship Management (ORM) tool that uses the Global Sourcing Value Framework as the foundation to rapidly identify opportunities or exposures to realization of sourcing business value. The IAOP Value Health Check Survey (VHCS) is a web-enabled diagnostic tool that can be used with outsourcing or shared service center relationships: • • • • •

OF ANY WORK SCOPE, SHAPE AND SIZE FROM ANY INDUSTRY INVOLVING ANY TYPE OF OUTSOURCING WHETHER ITO, BPO OR KPO, INCLUDING SHARED SERVICE CENTER RELATIONSHIPS WHETHER THE SOURCING IS DONE ON-SHORE, NEAR-SHORE OR OFF-SHORE

VHCS PROCESS AT-A-GLANCE

1) VCHS collects demographic information on each contract design to allow peer group and trending analysis 2) Outsourcing Customers and Providers prioritize and score their level of agreement with a series value statements across each of the five areas of value 3) Stakeholder’s comments can be recorded at each statement or overall if required 4) Each stakeholder gets an immediate overall score based on their unique selections 5) Each stakeholder also gets immediate results at each of the five areas of value 6) Once all Stakeholder results are compiled, a Basic Report is provided consisting of 30 pages of detailed data/information and analysis comparing responses by customer and provider. Shortly, peer group scores will be available so customers and providers can compare their relationships to best of breed in the industry RESOURCE BOX:

The VHCS, is designed to measure the vital signs of an outsourcing or shared service center relationship. It is quick, focused and affordable…much like a regular health check-up. Once performed, outsourcing customers and service providers have greater visibility into the key value drivers of the relationship, areas of alignment and misalignment and insights on opportunities for value improvement. Within a very short period, both customer and service provider can have a beginning roadmap for optimizing value in their sourcing relationship. IAOP Corporate Customer and Provider Members receive up to two (2) complementary VHCS per year as part of their annual membership. VHCS are available to IAOP Professional Members, Advisor Members and Non-Members for a nominal administrative fee. If you’d like to learn more about the IAOP Value Health Check Survey (VHCS), visit: http://www.outsourcingprofessional.org/surveys/VHCS/Login.aspx

Matt assists organizations world-wide as they develop, implement and optimize their global outsourcing strategies and relationships. He’s currently the President and CEO of Global Sourcing Optimization Services (GSOS). In addition, Matt is the Global Ambassador for the International Association of Outsourcing Professionals (IAOP), Chairman of the IAOP’s Outsourcing Tools & Technology Innovation Chapter, Co-Chairman of the IAOP Midwest Chapter and a Certified Outsourcing Professional (COP). Matt is also the author of the IAOP Value Health Check Survey. He is a frequent speaker on the developing management science of outsourcing at industry conferences. Matt has held senior management positions with global leaders in the field of outsourcing such as IBM, CSC, Capgemini, and PricewaterhouseCoopers (PwC). He is an undergraduate degree from Washington University in St. Louis.

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WHAT’S HAPPENING AT IAOP WELCOME NEW IAOP MEMBERS

IAOP MEMBERSHIP Membership in IAOP provides access to an extensive array of services, and just as importantly distinguishes organizations and professionals as leaders in the field of outsourcing. IAOP membership demonstrates a commitment to innovative thinking, continuous performance improvement, and to the sustaining development of outsourcing as both an industry and as a profession.

Accenture, ACS, Aegis, Allstate Insurance, Alsbridge, Cambridge Assessment, Amritt Ventures Inc., Applied Materials, Argosy University, Assurant, AstraZeneca, Avago Technologies, Bank of America, Benchmark Consulting, Blue Shield of CA, BST America, Capella University, Capgemini, CB Richard Ellis, CDI, Chrysler, CIGNA, Colliers Corporate Solutions, Conseco, Data Control Group Inc., Devoteam Consulting A/S, Diebold, Disney Institute, EquaSiis/, E.S.C.A., EchoPoint Consulting, ESIL & Associates, EquaTerra, Express Scripts, Inc., FIA / USP, Firstsource, FreelanceLaw, Inc., Gap Inc., General Motors, Genmab, Global Sourcing Optimization Services, Gorrissen Federspiel, HarborSource LLC , HCL Technologies, Hinduja Global Solutions (HTMT), hiSoft Technology International Limited, Hoffmann-La Roche Inc., Hongiman, Hunter Warfield, IMS Health, inContact , Indudata , Infosys Technologies Ltd., Infosys BPO, Intel, Intetics, ISS A/S, IQPC, JNet Communications, Kelly Services, Kenobi SRL, KPMG LLP, Kraft Foods, LifeMasters, Loeb & Loeb, London School of Economics, McKesson, Microsoft Corp., Morrison & Foerster LLP, Panamsys, Inc., Pfizer Inc , , Pratt & Whitney, Premier Research Group, Probitas Associates Ltd, Procter & Gamble, Prudential, ResourcePro, Rio Tinto, RR Donnelley, RTM Consulting, LLC, Rubicon, Ryder, Sanofi Pasteur, SAP AG, Sequence, Service Corporation International, Simplexity, Inc., SolarWinds, SOURCECORP, State Farm Insurance, Studio Consulenze Pasini, TATA Communications, TEKsystems Global Services, The Presentation Studio LLC , Tomko Tek LLC, Trellis, T-Systems P.R. China Ltd., Tusky Global Resources , UBS , United Technologies Corp., Universal Music Group, University of Missouri, Vedel IT , Vertex Business Services, Verve Communications, Vodafone Netherlands, WNS, Yahoo, Inc. and Zensar Technologies. For information on IAOP Membership, email sales@outsourcingprofessional.org.

RECENT IAOP ANNOUNCEMENTS

IAOP’S TRAINING & CERTIFICATION COMMITTEE ANNOUNCES NEW CHAIR Bill Hefley Ph.D., COP, CDP, is now chairing IAOP’s Training and Certification Committee, which takes the lead in identifying the educational needs of members and overseeing the development and delivery of its training programs. Additionally, this committee works with the Outsourcing Standards Board to ensure that IAOP members are properly prepared for initial and ongoing organizational and professional certification. THE 2010 GLOBAL OUTSOURCING 100 AND WORLD’S BEST OUTSOURCING ADVISORS The unranked top 100 service providers globally (75 Leaders and 25 Rising Stars) and the best outsourcing advisory firms will be announced at The 2010 Outsourcing World Summit. The final ranked lists will be published in the Fortune 500 issue of Fortune® magazine. The prospectus for the special section

GlobalizationToday March 2010

WHAT’S HAPPENING AT IAOP IAOP’S CERTIFIED OUTSOURCING PROFESSIONAL® (COP) PROGRAM The COP designation distinguishes individuals as leaders in the field of outsourcing. It powerfully demonstrates that they possess the experience and knowledge required to design, implement, and manage outsourcing initiatives that have a high probability of achieving an organization’s intended outcomes. Visit www.outsourcingprofessional.org to find out how you can join this distinguished group of professionals. CONGRATULATIONS NEW CERTIFIED OUTSOURCING PROFESSIONALS (COPS) Jennifer Bailey, Manager-Global Strategic Sourcing, PWC; Thomas McMillan, Manager-Vendor Relations, Covance; Sébastien Muller, Cluster Executive , Orange Business Service, ; Michael Kolm, Vice President-IT Advisory, PWC; Sandeep Kulkarni, Sr. Manager Outsourcing/Offshoring, Symantec; Kevin DeLury, Manager-Customer Service, Blue Shield of California; Jon Gudelis, Owner, Principal, Partner, Liberte DG; Sanjeev Puri, Manager, Cognizant; Dirk Weber, AO Solution Architect, Accenture; Lee Nunziato, BPO-Project Manager, Xerox; Wijnand Kamerling, Senior Consultant, Quint Wellington Redwood; Anthony Mampilly, Project Manager, Procure Staff; Marco Sottovia, Partner, PWC; Devish Amin, General Manager, Capital One; Danny Ertel, Partner, Vantage Partners; Dr. Jane Siegel, Director-ITSqc, Carnegie Melon; Bill Hefley, Director-ITSqc, Carnegie Melon; Jeff Perdue, Associate Director-ITSqc, Carnegie Melon; Bruce Winterfeld, Program Manager Company ; Chas Mullins, CEO, The Mullins Group LLC; Surinder S Rana, International Monetary Fund, Senior Facilities Officer; Aayaz Amin Pira, Advisory Services, PCW; Shelia Gray, Director of Recruiting, ABB Inc.; Curt Olson, Director of Global Sourcing, Lawson; Rene Herlaar, Network Transformation, Program Manager Central Region Networks, Vodafone; Roseanne LaBarge, Manager IT Sourcing, AT&T; Maureen Theberge, Program Management, Blue Shield of California; Michele Flynn, President, Expense Management Solutions; Lisa Sadlik, Consultant, JDalal Assoc.; Oliver Bussmann, CIO, SAP AG; Michael Mensik, Partner, Baker & McKenzie LLC; Ken Sharma, Service Delivery DirectorBusiness Process Strategy and Governance, Symantec; Donald Dai, Regional Manager, Orange Business Services; Greg Kirchhoefer, Partner, Kirkland & Ellis; Stephen Johnson, Partner, Kirkland & Ellis; James Shea, Director, Director, Cyber Defense Institute; and, John Garbarino, Director of Procurement, Hess Corp. For more information on corporate and professional development, please email copprogramservices@outsourcingprofessional.org. CALENDAR OF EVENTS

CHAPTER MEETING CALENDAR •

APRIL 2010

CHICAGO CHAPTER

•

APRIL 2010

NEW ENGLAND CHAPTER

•

APRIL 2010

SAN FRANCISCO CHAPTER

Stay tuned, as plans are underway for several additional first and second quarter meetings. Remember, as a COP you earn certification points and continuing education hours when you attend a chapter meeting! Visit www.outsourcingprofessional.org to see the full Chapter Meeting Calendar. titled “IAOP Global 100 Celebration” in the upcoming May 3, 2010 Fortune 500 issue can be downloaded from the IAOP website. IAOP FORMS LEGAL AND COMPLIANCE CHAPTER In December 2009 the newly formed Legal and Compliance chapter came together to discuss strategies to minimize exposure to counterparty risks at the contracting stage; counterparty risks that may affect specific regulatory requirements, such as data privacy laws, accounting implications, and industry-specific requirements; and processes for customers and service providers to monitor

CORPORATE & PROFESSIONAL DEVELOPMENT

COMPLIMENTARY COP PREP CLASS WEBINAR Looking for more information on IAOP’s de facto certification? Sign up for the next complimentary COP Prep Class webinar and find out what it takes to become a COP. These classes are ongoing, so check the IAOP website at www. outsourcingprofessional.org to find a time and date that fits your schedule! COP MASTER CLASSES AND GOVERNANCE WORKSHOPS

COP MASTER CLASSES ARE HELD IN THE US AND GLOBALLY THROUGHOUT THE YEAR. THE FOLLOWING CLASSES HAVE BEEN RECENTLY ANNOUNCED: • FEBRUARY 22-25, COP MASTER CLASS, MAURITIUS • MARCH 22-25, COP MASTER CLASS, CHAPEL HILL, NC • MARCH 26, GOVERNANCE WORKSHOP, CHAPEL HILL, NC • APRIL 12-16, 2010, COP MASTER CLASS, INSTITUTE FOR RESEARCH AND EDUCATION IN OUTSOURCING, CAL STATE UNIVERSITY, FULLERTON MARRIOTT. • SEPTEMBER 13-16, COP MASTER CLASS, CHAPEL HILL, NC • SEPTEMBER 17, GOVERNANCE WORKSHOP, CHAPEL HILL, NC • THE ONLINE COP MASTER CLASS IS BACK AND ON SALE THROUGH YEAREND! REGISTER AT WWW.IAOP-COP.COM AND EARN 75 POINTS TOWARD COP CERTIFICATION AT YOUR CONVENIENCE.

and manage counterparty risks throughout the lifecycle of the engagement. The new chapter, chaired by Kirkland & Ellis LLP, will provide a forum for professionals to address the important legal, regulatory and compliance issues facing outsourcing customers, providers and advisors globally. IAOP PARTNERS WITH BOSTON UNIVERSITY TO ADVANCE OUTSOURCING AND OFFSHORING IAOP continues to build its academic alliances through a new partnership with Boston University School of Management’s Institute for Global Work (IGW). The groups will work together to share research, best practices and thought leadership to promote the industry and profession of outsourcing and offshoring. Under the agreement, IAOP and its members can participate in research studies developed by IGW; and the university will have the opportunity to present its findings at IAOP conferences, among other benefits.

globalizationtoday.com

WHAT’S HAPPENING AT IAOP IAOP PARTNERS WITH CALIFORNIA STATE UNIVERSITY FULLERTON BUSINESS CENTER TO ADVANCE INDUSTRY AND CERTIFY OUTSOURCING PROFESSIONALS The association has entered an academic alliance partnership with CSUF’s Mihaylo College of Business and Economics – Institute for Research and Education in Outsourcing (IREO) and Center for the Study of Emerging Markets (CSEM) to share research, best practices and thought leadership to promote the outsourcing and offshoring industry and profession. The college also has become the first institution to license IAOP’s Certified Outsourcing Professional® Master Class training program and Governance training workshop. The licensing agreement will allow CSUF to offer the comprehensive COP training that covers the end-toend process of outsourcing, enabling participants to earn half the points needed for professional certification, as well as to receive additional credit for taking the Governance workshop. IAOP JOINS WITH NEARSHORE AMERICAS TO ADVANCE OUTSOURCING IN LATIN AMERICA, THE CARIBBEAN AND CANADA IAOP has entered an alliance with online news provider Nearshore Americas to advance outsourcing in Latin America, the Caribbean and Canada. The media partnership will provide the latest news and information to professionals in these regions. Founded in September 2009 as the first and only independent news blog dedicated to outsourcing in the Americas, Nearshore Americas’ mission is to provide news and informed opinion on the $8 billion professional services export industries of Latin America, the Caribbean and Canada. Under the agreement, IAOP will regularly contribute surveys, studies and other significant information and Nearshore Americas will cover IAOP events in these regions. IAOP NAMES TWO LEADERS OF OUTSOURCING HALL OF FAME AT EUROPEAN SUMMIT In Fall 2009 IAOP inducted Oliver T. Bussmann, chief information officer of SAP AG in Germany, and Michael S. Mensik, a partner in the Chicago, Illinois law office Baker & McKenzie International, into its Outsourcing Hall of Fame. Bussmann and Mensik were honored at a gala dinner attended by outsourcing professionals from around the world on Oct. 15 at the association’s 2009 European Outsourcing Summit at the Copenhagen Business School. Over the past two decades, Bussmann has excelled at driving and managing transformational change initiatives across complex multinational enterprises. In leadership roles with IBM, Deutsche Bank, and Allianz (Insurance and Asset Management businesses), he has delivered millions of dollars in cost savings through leading-edge information strategies including outsourcing, shared services and service centralization. Bussmann was appointed CIO of SAP AG in September 2009. Based at the company’s headquarters in Walldorf, Germany, he is responsible for SAP’s cross-functional IT department and supports the company’s strategic direction. Until recently, Bussmann was an invited member of the BITS Advisory Council, a CEO-driven financial services industry consortium that comprises the largest financial institutions in the U.S. “It is a great honor to receive this recognition from IAOP,” Bussmann said. “Sourcing is an essential management instrument of successful CIOs – similar to maximizing return and minimizing risk for portfolio managers.” Mensik is a partner in the Chicago office of Baker & McKenzie International, a Swiss Verein with member law firms around the world. He is global co-coordinator of Baker & McKenzie’s Global Information Technology/Communications Law practice. Also, Mensik is the editor of the monthly “Legalbytes: Outsourcing Digest” and has worked in the firm’s Madrid office as an associate. Mensik has been ranked as a leading Technology and Outsourcing Attorney by Chambers Global 2007 and has spoken at numerous conferences on outsourcing, offshoring and other topics. He also counsels charitable organizations such as Concern Worldwide on how to source humanitarian campaigns in less-developed countries. “I am honored and also very much appreciate IAOP’s recognition that the legal profession can contribute to the development of this still relatively new and rapidly evolving field,” Mensik said.“I commend IAOP, its leadership and its

GlobalizationToday March 2010

California State University Fullerton members for their many contributions over the years, and look forward to working more closely with them as we forge ahead.” IAOP Chairman Michael Corbett said, “These individuals represent the highest quality of professionals in the outsourcing industry globally. Not only are they leaders in business, they are also leaders in society. These Hall of Fame inductees are at the forefront of advancing practices that are a model for all companies.” Recent inductees honored at the 2009 Asia-Pacific Outsourcing Summit were: Yang Berhormat Senator Tan Sri Amirsham A Aziz, former president and CEO of Maybank and previously a Malaysia Minister; and Dr. Liu Jiren, chairman and CEO, Neusoft Corporation. BEST OF FIRMBUILDER FOR 2009 IAOP’s Knowledge Center, Firmbuilder.com®, provides the information outsourcing professionals need to be successful in their jobs. With new articles loaded regularly, Firmbuilder takes the hassle out of finding documentation that will help you and your organization design, implement and manage simple or complex outsourcing engagements. Below are abstracts for select articles published in 2009 – we recommend that you visit www.outsourcingprofessional.org to read the articles in their entirety. IAOP CHAPTER MEETINGS NEW YORK – THE JUNE 4, 2009 meeting focused on “Trends in Pharma/ Life Sciences Outsourcing: Sourcing Successes and Strategies in the Life Sciences and Healthcare Industry”, “Capturing the Value in Pharma Sourcing/Life Sciences Sourcing : Maximizing the Opportunities and Managing the Risks” and “The Future of Outsourcing in Pharmaceutical/Life Sciences Sector.” CHICAGO – THE JULY 23, 2009 meeting focused on “A Benchmarking Primer” and “Innovative Ways to Leverage IT and Differentiate Yourself in Today’s Market.” SAN FRANCISCO – THE APRIL 7, 2009 meeting focused on “Hosting SaaS

Solutions.” GLOBAL TECHNOLOGY INDUSTRY MEETING/WEBINAR – THE OCTOBER 8, 2009 meeting and webinar program included a panel discussion on

“The Science of Multi Provider Governance”, a discussion on “Secured Outsourcing per ISO 27002 - Information Security Management Systems (ISMS) standards” and the presentation “China’s Outsourcing Industry – A Perspective.”

WHAT’S HAPPENING AT IAOP

2009 IAOP SALARY SURVEY RESULTS By: International Association of Outsourcing Professionals (IAOP) This survey data, especially when combined with earlier research by IAOP on the skills, job and organizational profiles of outsourcing professionals and the companies they work for, provides the first clear and compelling picture of a new and very important profession. Ninety-five percent of the organizations participating in this survey employ outsourcing professionals – with many large organizations operating outsourcing departments with more than 100 professionals. Their jobs span from entry-level positions, focused mainly on gathering and analyzing critical information about a business and its operations, to senior-level positions with responsibility for setting strategic direction and overseeing some of the most important aspects of their company’s operations. As individuals advance in this profession they build a portfolio of experiences and capabilities that mirror those of the best general managers in business today and are compensated at that level. And, although outsourcing professionals increasingly move between customer, provider and advisor organizations during their careers, there are important differences in the roles and responsibilities, compensation levels and compensation structures among these organizations. NEW IAOP MEMBERSHIP BENEFITS In addition to our already extensive corporate member benefits, that provide organization-wide access to IAOP’s research, training, certification and networking programs, we have added three programs that will enable you to deliver greater value to your organization, they are: OperatorEvaluator is an exciting new solution available through IAOP as part of our suite of outsourcing skills and professional development offerings.

The IAOP OperatorEvaluator is the next step in IAOP’s continuing effort to assist our membership and the outsourcing industry worldwide in developing and demonstrating the skills required to optimize business value from outsourcing. While IAOP’s COP program is designed to address the requirements of outsourcing leadership and operational management, OperatorEvaluator is designed to assist the buyers and providers of outsourcing — the backbone of the outsourcing industry — to systematically enhance the quality of their work. Best Outsourcing Jobs Inc. (BOJ) was founded to address a key gap in the market. The outsourcing profession continues to grow globally and so does the need for outsourcing professionals. BOJ strives to be the premier online job portal and resource for outsourcing employers and professionals. Its mission is to help our customer’s source and hire the most qualified global and outsourcing professionals and to provide those professionals with the best job opportunities in their respective fields. BestOutsourcingJobs.com is designed for the specific needs of global professionals, enabling them to perform highly targeted job searches based on specific criteria, including location, type of employment, skill set, certifications and keyword. BestOutsourcingJobs.com also provides job search tools such as search agents, resume posting and career-related content. The job postings available in the BestOutsourcingJobs.com database, from both global and local companies across many industries, include a wide variety of global and outsourcing positions for mid and senior level managers, and a variety of other global and outsourcing professionals. For further details on these new offerings from IAOP, visit www.outsourcingprofessional.org

globalizationtoday.com

OUTSOURCERâ&#x20AC;&#x2122;S DESK RESOURCE

Industry & Expertise Snapshot COMPANY NAME

WEB ADDRESS

Accenture

www.accenture.com

Cohn & wolfe for adp Aegis limited

VERTICAL INDUSTRIES Retail and Consumer Goods

Telecommunication

http://www.adp.com

Discrete Manufacturing

Health Care

www.aegisglobal.com

Telecommunication

Financial Services (Banking, Markets)

Acs

www.acs-inc.com

Government (All Levels)

Health Care

Amdocs

http://www.amdocs.com

Telecommunication

Entertainment and Media

Aramark

www.aramark.com

Entertainment and Media

Health Care

Auriga, inc.

http://auriga.com/

Technology (Hardware and Software)

Health Care

Beyondsoft (beijing) co., Ltd

www.beyondsoft.com

Technology (Hardware and Software)

Financial Services (Banking, Markets)

Bleum inc.

www.bleum.com

Financial Services (Banking, Markets)

Technology (Hardware and Software)

Capgemini

www.capgemini.com

Government (All Levels)

Utilities

Cb richard ellis

www.cbre.com

Financial Services (Banking, Markets)

Technology (Hardware and Software)

Ceridian

www.ceridian.com

Retail and Consumer Goods

Services

Cgi group inc.

www.cgi.com

Government (All Levels)

Financial Services (Banking, Markets)

China talent group

www.chinatalentgroup.com

Services

Retail and Consumer Goods

Chinasoft international, ltd.

www.ChinaSofti.com

Government (All Levels)

Technology (Hardware and Software)

Ci&t

www.ciandt.com

Retail and Consumer Goods

Oil and Natural Gas

Cienet international

www.cienet.com.cn

Telecommunication

Oil and Natural Gas

Cognizant

www.cognizant.com

Financial Services (Banking, Markets)

Health Care

Collabera inc.

www.collabera.com

Financial Services (Banking, Markets)

Telecommunication Services

Colliers international

www.colliers.com

Discrete Manufacturing

Concentrix

www.concentrix.com

Technology (Hardware and Software)

Telecommunication

Convergys

www.convergys.com

Telecommunication

Technology (Hardware and Software)

Corbus india pvt. Ltd.

www.corbus.com

Discrete Manufacturing

Retail and Consumer Goods

Cpa global

www.cpaglobal.com

Other

Pharmaceutical

Cpm braxis

www.cpmbraxis.com

Financial Services (Banking, Markets)

Telecommunication Discrete Manufacturing

Csc

www.csc.com

Government (All Levels)

Dextrys

www.dextrys.com

Technology (Hardware and Software)

Retail and Consumer Goods

Diebold

www.dieboldintegratedservices.com

Services

Technology (Hardware and Software)

Emcor group, inc.

emcorgroup.com

Services

Oil and Natural Gas

Emerio globesoft pte ltd

www.emeriocorp.com

Technology (Hardware and Software)

Financial Services (Banking, Markets)

Epam systems, inc.

www.epam.com

Technology (Hardware and Software)

Financial Services (Banking, Markets)

Eperformax contact centers & bpo

www.eperformax.com

Financial Services (Banking, Markets)

Telecommunication

Exlservice holdings, inc

www.exlservice.com

Financial Services (Insurance)

Utilities

Firstsource

www.firstsource.com

Health Care

Telecommunication

Gem

www.the-gem.com

Telecommunication

Technology (Hardware and Software)

Genpact

www.genpact.com

Financial Services (Banking, Markets)

Financial Services (Insurance)

Global eprocure

www.globaleprocure.com

Retail and Consumer Goods

Discrete Manufacturing

Globant

www.globant.com

Entertainment and Media

Technology (Hardware and Software)

Grupo assa

www.grupoassa.com

Health Care

Retail and Consumer Goods

Grupo prominente

www.grupoprominente.com

Services

Utilities

Hcl technologies ltd

www.hcltech.com

Other

Financial Services (Banking, Markets)

Headstrong, inc.

www.headstrong.com

Financial Services (Banking, Markets)

Health Care

Hewitt associates

www.hewitt.com

Telecommunication

Financial Services (Banking, Markets)

Hexaware technologies

http://www.hexaware.com

Financial Services (Banking, Markets)

Air Transportation

Hinduja global solutions

www.hindujagsl.com

Telecommunication

Health Care

Hisoft technology international limited

www.hisoft.com

Technology (Hardware and Software)

Financial Services (Banking, Markets)

Hov services

www.hovservices.com

Health Care

Financial Services (Insurance)

Iba group a.S.

www.iba-it-group.com

Technology (Hardware and Software)

Automotive

To get included in our incoming buyers guide register for your free listing at http://www.globalizationtoday.com/buyers_guide.html

GlobalizationToday March 2010

OUTSOURCERâ&#x20AC;&#x2122;S DESK RESOURCE

EXPERTISE Financial Services (Banking, Markets)

Information/Communications Technology

Financial Management

Human Resource Management

Services

Transaction Processing

Human Resource Management

Administrative Services

Health Care

Customer Relationship Management

Financial Management

Other

Financial Services (Insurance)

Information/Communications Technology

Human Resource Management

Transaction Processing

Financial Services (Banking, Markets)

Information/Communications Technology

Industry-Specific Services

Customer Relationship Management

Education

Other

Facility Services

Other

Telecommunication

Research & Development

Information/Communications Technology

Telecommunication

Research & Development

Information/Communications Technology

Retail and Consumer Goods

Information/Communications Technology

Discrete Manufacturing

Information/Communications Technology

Financial Management

Customer Relationship Management

Administrative Services

Health Care

Real Estate and Capital Asset Management

Facility Services

Discrete Manufacturing

Human Resource Management

Transaction Processing

Other

Financial Services (Insurance)

Information/Communications Technology

Transaction Processing

Human Resource Management

Technology (Hardware and Software)

Human Resource Management

Information/Communications Technology

Customer Relationship Management

Financial Services (Banking, Markets)

Industry-Specific Services

Research & Development

Information/Communications Technology

Entertainment and Media

Information/Communications Technology

Research & Development

Marketing

Entertainment and Media

Information/Communications Technology

Industry-Specific Services

Research & Development Industry-Specific Services

Retail and Consumer Goods

Industry-Specific Services

Retail and Consumer Goods

Information/Communications Technology

Industry-Specific Services

Retail and Consumer Goods

Real Estate and Capital Asset Management

Corporate Services

Facility Services

Other

Customer Relationship Management

Sales

Transaction Processing

Financial Services (Banking, Markets)

Customer Relationship Management

Information/Communications Technology

Human Resource Management

Pharmaceutical

Information/Communications Technology

Other

Technology (Hardware and Software)

Legal

Retail and Consumer Goods

Information/Communications Technology

Financial Services (Insurance)

Information/Communications Technology

Transaction Processing

Customer Relationship Management

Discrete Manufacturing

Research & Development

Information/Communications Technology

Administrative Services

Financial Services (Banking, Markets)

Customer Relationship Management

Information/Communications Technology

Transaction Processing

Government (All Levels)

Facility Services

Government (All Levels)

Information/Communications Technology

Entertainment and Media

Information/Communications Technology

Retail and Consumer Goods

Customer Relationship Management

Financial Management

Industry-Specific Services

Financial Services (Banking, Markets)

Industry-Specific Services

Transaction Processing

Financial Management

Financial Services (Banking, Markets)

Industry-Specific Services

Customer Relationship Management

Transaction Processing

Retail and Consumer Goods

Customer Relationship Management

Discrete Manufacturing

Financial Management

Transaction Processing

Information/Communications Technology

Hospitality

Corporate Services

Financial Services (Banking, Markets)

Information/Communications Technology

Oil and Natural Gas

Information/Communications Technology

Logistics

Real Estate (Construction, Transaction)

Information/Communications Technology

Transaction Processing

Financial Management Customer Relationship Management

Telecommunication

Other

Services

Information/Communications Technology

Industry-Specific Services

Transaction Processing

Technology (Hardware and Software)

Human Resource Management

Administrative Services

Other

Discrete Manufacturing

Information/Communications Technology

Transaction Processing

Corporate Services

Retail and Consumer Goods

Customer Relationship Management

Sales

Transaction Processing

Discrete Manufacturing

Research & Development

Information/Communications Technology

Transaction Processing

Government (All Levels)

Transaction Processing

Document Management

Human Resource Management

Financial Services (Banking, Markets)

Information/Communications Technology

Document Management

Research & Development

globalizationtoday.com

OUTSOURCERâ&#x20AC;&#x2122;S DESK RESOURCE COMPANY NAME

WEB ADDRESS

Ibm corp.

www.ibm.com

VERTICAL INDUSTRIES Financial Services (Banking, Markets)

Igate global solutions

www.igate.com

Financial Services (Banking, Markets)

Discrete Manufacturing

Infosys technologies limited

www.infosys.com

Financial Services (Banking, Markets)

Discrete Manufacturing

Insigma us inc.

www.insigmaus.com, www.insigma.com.cn

Financial Services (Banking, Markets)

Telecommunication

Inspur worldwide services ltd.

www.inspur.com

Discrete Manufacturing

Telecommunication

Intelenet global services

www.intelenetglobal.com

Financial Services (Banking, Markets)

Hospitality

Intelligroup, inc.

www.intelligroup.com

Pharmaceutical

Discrete Manufacturing

Interglobe technologies

www.igt.in

Air Transportation

Hospitality

Intetics co.

www.intetics.com

Technology (Hardware and Software)

Telecommunication

Iss

www.issworld.com

Utilities

Financial Services (Banking, Markets)

Itc infotech india ltd.

www.itcinfotech.com

Financial Services (Banking, Markets)

Discrete Manufacturing

Itransition

http://www.itransition.com/

Technology (Hardware and Software)

Entertainment and Media

Johnson controls

www.johnsoncontrols.com

Technology (Hardware and Software)

Pharmaceutical

Jones lang lasalle

www.joneslanglasalle.com

Financial Services (Banking, Markets)

Technology (Hardware and Software)

Lionbridge

http://www.lionbridge.com

Technology (Hardware and Software)

Telecommunication

M&y group

www.mydatasolutions.com

Financial Services (Banking, Markets)

Financial Services (Insurance)

Mastek limited

www.mastek.com

Financial Services (Insurance)

Government (All Levels)

Mera networks inc

www.meranetworks.com

Telecommunication

Technology (Hardware and Software) Automotive

Mindtree ltd.

www.mindtree.com

Financial Services (Banking, Markets)

Nagarro, inc.

http://www.nagarro.com

Technology (Hardware and Software)

Discrete Manufacturing

Nco group, inc.

www.ncogroup.com

Financial Services (Banking, Markets)

Telecommunication

Ncr corp

www.ncr.com

Financial Services (Banking, Markets)

Retail and Consumer Goods

Ncs pte ltd.

//www.ncs.com.sg

Government (All Levels)

Telecommunication

Neoris

www.neoris.com

Retail and Consumer Goods

Oil and Natural Gas

Neusoft group ltd.

www.neusoft.com

Telecommunication

Health Care

Newmark knight frank

www.newmarkkf.com

Technology (Hardware and Software)

Financial Services (Banking, Markets)

Objectiva software solutions

www.objectivasoftware.com

Financial Services (Insurance)

Financial Services (Banking, Markets)

Oce business services

www.obs-innovation.com

Financial Services (Banking, Markets)

Discrete Manufacturing

Oracle financial services bpo

www.oracle.com www.iflexbpo.com

Financial Services (Banking, Markets)

Financial Services (Insurance)

Outsource partners international, inc.

www.opiglobal.com

Services

Financial Services (Banking, Markets)

Patni computer systems limited

www.patni.com

Financial Services (Insurance)

Discrete Manufacturing

Pitney bowes management services

www.pb.com

Financial Services (Banking, Markets)

Financial Services (Insurance)

Scicom (msc) berhad

www.scicom-intl.com

Technology (Hardware and Software)

Telecommunication

Schwartz communications

www.sitel.com

Telecommunication

Technology (Hardware and Software)

Sodexo

www.sodexo.com

Other

Health Care

Softserve, inc.

www.softserveinc.com

Technology (Hardware and Software)

Health Care

Softtek

http://www.softtek.com

Discrete Manufacturing

Financial Services (Banking, Markets)

Spi

www.spi-bpo.com

Health Care

Entertainment and Media

Topaz partners for stefanini it solutions

www.stefanini.com

Financial Services (Banking, Markets)

Discrete Manufacturing

Stream global services

www.stream.com

Technology (Hardware and Software)

Telecommunication

Syntel

www.syntelinc.com

Financial Services (Banking, Markets)

Financial Services (Insurance)

Synygy, inc.

www.synygy.com

Pharmaceutical

Telecommunication

Fleishman-hillard

www.tcs.com

Other

Telecommunication

Tech mahindra ltd.

www.techmahindra.com

Telecommunication

Teletech holdings, inc

www.teletech.com

Telecommunication

Transcosmos inc. (Silicon valley)

http://www.trans-cosmos.co.jp/

Technology (Hardware and Software)

Financial Services (Banking, Markets)

Unisys

www.Unisys.com

Financial Services (Banking, Markets)

Government (All Levels)

Vanceinfo technologies inc.

www.vanceinfo.com

Technology (Hardware and Software)

Telecommunication

Williams lea

www.williamslea.com

Financial Services (Banking, Markets)

Other

Technology (Hardware and Software)

Wipro technologies

www.wipro.com

Telecommunication

Financial Services (Banking, Markets)

Wns

http://www.wns.com/

Financial Services (Insurance)

Hospitality

Xceed

www.xceedcc.com

Technology (Hardware and Software)

Telecommunication

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Government (All Levels)

GlobalizationToday March 2010

OUTSOURCERâ&#x20AC;&#x2122;S DESK RESOURCE

EXPERTISE Other

Information/Communications Technology

Customer Relationship Management

Financial Services (Insurance)

Information/Communications Technology

Transaction Processing

Other

Telecommunication

Information/Communications Technology

Transaction Processing

Other

Government (All Levels)

Financial Management

Information/Communications Technology

Transaction Processing

Technology (Hardware and Software)

Information/Communications Technology

Health Care

Customer Relationship Management

Transaction Processing

Industry-Specific Services

Technology (Hardware and Software)

Information/Communications Technology

Industry-Specific Services

Services

Information/Communications Technology

Customer Relationship Management

Industry-Specific Services

Retail and Consumer Goods

Research & Development

Information/Communications Technology

Administrative Services

Health Care

Facility Services

Retail and Consumer Goods

Information/Communications Technology

Financial Management

Telecommunication

Information/Communications Technology

Industry-Specific Services

Research & Development

Other

Facility Services

Real Estate and Capital Asset Management

Other

Pharmaceutical

Real Estate and Capital Asset Management

Facility Services

Corporate Services

Health Care

Research & Development

Information/Communications Technology

Transaction Processing

Other

Industry-Specific Services

Document Management

Industry-Specific Services

Financial Services (Banking, Markets)

Information/Communications Technology Research & Development

Entertainment and Media

Research & Development

Industry-Specific Services

Services

Information/Communications Technology

Other

Retail and Consumer Goods

Information/Communications Technology

Health Care

Customer Relationship Management

Services

Information/Communications Technology

Other

Financial Services (Banking, Markets)

Information/Communications Technology

Transaction Processing

Facility Services

Discrete Manufacturing

Information/Communications Technology

Services

Industry-Specific Services

Research & Development

Information/Communications Technology

Telecommunication

Other

Facility Services

Real Estate and Capital Asset Management

Technology (Hardware and Software)

Research & Development

Document Management

Other

Document Management

Facility Services

Administrative Services

Other

Transaction Processing

Customer Relationship Management

Financial Management

Discrete Manufacturing

Financial Management

Other

Telecommunication

Information/Communications Technology

Other

Government (All Levels)

Facility Services

Document Management

Legal

Air Transportation

Customer Relationship Management

Human Resource Management

Transaction Processing

Financial Services (Banking, Markets)

Customer Relationship Management

Sales

Transaction Processing

Education

Facility Services

Other

Real Estate and Capital Asset Management

Telecommunication

Information/Communications Technology

Research & Development

Industry-Specific Services

Technology (Hardware and Software)

Information/Communications Technology

Transaction Processing

Financial Services (Insurance)

Document Management

Customer Relationship Management

Administrative Services

Telecommunication

Information/Communications Technology

Industry-Specific Services

Entertainment and Media

Customer Relationship Management

Health Care

Information/Communications Technology

Transaction Processing

Financial Services (Insurance)

Human Resource Management

Information/Communications Technology

Retail and Consumer Goods

Information/Communications Technology

Industry-Specific Services

Research & Development

Information/Communications Technology Financial Services (Banking, Markets)

Customer Relationship Management

Transaction Processing

Sales

Retail and Consumer Goods

Customer Relationship Management

Information/Communications Technology

Marketing

Financial Services (Insurance)

Information/Communications Technology

Transaction Processing

Logistics

Financial Services (Banking, Markets)

Research & Development

Information/Communications Technology

Financial Services (Insurance)

Document Management

Marketing

Facility Services

Other

Information/Communications Technology

Other

Retail and Consumer Goods

Transaction Processing

Customer Relationship Management

Other

Government (All Levels)

Transaction Processing

Customer Relationship Management

Other

globalizationtoday.com

SCRAP BOOK

Th TThe he h eO Outsourcing World Summit®, on Feb. 17, 2009. Left to right: Michael FF.. C Corbett, Chairman, IAOP; Marty Chuck, Founder, The CXOs LLC; Rick Wartzman, Director, The Drucker Institute at Claremont Graduate UniW versity; Lynn Blodgett, President & CEO, ACS; Atul Vashistha, Chairman, Neo Advisory

IAOP’s 2009 Asia-Pacific Outsourcing Summit. Michael F. Corbett is giving a gift to Dato’ Seri Dr. Maximus J. Ongkili, the Minister for Science, Technology & Innovation, Federal Govt. of Malaysia; and to his left is David Wong, ong ng, n g g, Chairman of Outsourcing Malaysia.

IAOP’s IIA A 2009 Asia-Pacific Outsourcing Summit, 12-13 May, 2009 Kuala Lumpur. Marty Chuck, Founder, The CXOs LLC with the core logistics and implementation team from PIKOM Jesalyn, Louise, Grace, Alice and Shiela.

The November 26, 2009 Italy Chapter Meeting, held in Rome, covered the topics of Governance, Outsourcing in Public Administration and Italy as an offshoring and nearshoring location.

GlobalizationToday G Gl Glo llobal lobal bal aliza iza ation titi nToday M tio March h 220 2010 201 01 010

ADVERTISER INDEX PAGE #

COMPANY NAME

URL

34, 35 18, 19 14, 15 4, 10, 16, 51

Accenture Aegis Diebold International Association of Outsourcing Professionals (IAOP) InvestChile Kelly Outsourcing & Consulting Group (KellyOCG) Microsoft Corporation Pan American Development Foundation Webstaze WNS Global

www.accenture.com www.aegisglobal.com www.diebold.com www.iaop.org

30, 31 26, 27 52 2 38 22, 23

www.investchile.com www.kellyocg.com www.microsoft.com www.padf.org www.webstaze.com www.wns.com