It is no secret that companies of all sizes are evaluating a global workforce — either external or internal — to deliver services to clients. If the title of this publication, Global Services, is any indication, it is a topic of interest to most executives. Yet, many organizations see this as a daunting task. It is often easy for these companies to focus on the “why nots,” and assume that the challenge is too great, the risk is too significant and the value unattainable.
Headlines are abound covering megadeal signings, missed expectations and deals coming back in-house. But the fact that many outsourcing buyers and companies actively using offshore labor are reticent to share their experiences because of potential negative public reaction makes it difficult to gather information on smaller — yet, still multiprocess — successful outsourcing and offshoring engagements. But, as market data indicates, the smaller, shorter-term outsourcing deals are a thriving part of the outsourcing market.
Why do firms continue to evaluate outsourcing and globalization? A 2005 study performed by IBM’s T.J. Watson Research Center investigated the long-term effects of mature outsourcing organizations — ones that had outsourced a major portion of their IT infrastructure between 1998–2002 — and found that these companies continued to outperform their peers in Sales, General and Administrative (SG&A) efficiency.
Others can reap similar benefits without outsourcing significant portions of their organization, and this article analyzes accessible globalization — the trend to focus on the smaller, non-enterprise (anti-megadeals), and how companies utilize and benefit from outsourcing on a lesser scale. Let’s look at specific examples of lessons learned and provider capabilities in areas such as Application Outsourcing (AO), Research and Development (R&D), market research, office applications and analytics and accounting. Interestingly, it is not only labor arbitrage that is fueling this growth, though it does remain a critical factor.
Several research firms, including Gartner and Forrester, report that megadeals are shrinking in IT and business process outsourcing, yet Gartner predicts that the market will grow 7.3% from 2004–2009. This data indicates that the market is active, but full of smaller deals — many that never hit the public radar screen. Specific trends supporting this projection include that IT is breaking up into best-of-breed solutions, and there is an active market for smaller back-office and administrative processes such as Human Resources (HR) and accounting.
Outsourcing the Market Research Function
Access to market data, trends and industry information can help companies make better-informed business decisions. Organizations of any size benefit from increased access to data, but hiring a full-time researcher or staff is often cost-prohibitive. Enter firms like Evalueserve (EVS) to address this business problem. EVS is an India-based firm that provides customized business intelligence, market research and intellectual-property services to any sized company. Its selling points are flexibility, speed and high-intellect staff, to name a few. EVS works on projects of any size and serves clients in 192 countries. Chances are you have not seen any EVS deals in the headlines, but the company, founded by former McKinsey executives, has quietly made a name for itself by selling non-megadeal research and business-intelligence projects.
Our firm, EquaTerra, has direct experience using EVS on a regular basis to provide market research, database support and other secondary research.
