GLOBALIZATION OF BUSINESS SERVICES
| |
2000-2005 |
2000-2005 |
Primary driver |
Reduce cost |
Reduce cost and improve efficiency |
Primary supply markets |
India |
India, Eastern Europe, the Philippines, Brazil, Russia, China |
Primary buyer markets |
U.S.A., Great Britain |
North America, Continental Europe, China, Japan, India, Korea |
Process in scope |
Simple, transactional (software projects, call centers, data entry) |
Complex G&A functions, multiple vertical processes |
Performance management |
Regional, nonstandard perfor- mance, no standard global processes or service levels |
Standardized performance, process standardization and global service levels across multiple providers, countries and processes |
Sourcing model |
Captive centers or offshore outsourcing |
Captive centers plus, multicountry sourcing to best-of-breed providers |
Service providers |
Domestic providers or offshore providers, few large captives |
More global service providers with domestic capabilities, growth in captive centers, captive center spin-offs |
Governance |
Delegated to service providers - sales and relationship focused |
Clients assumes responsibility - establish focus on efficiency and effectiveness in multiprovider global sourcing |
Mainstream climate |
Negative publicity, presidential political fodder |
Activist opposition, general acceptance of globalization |
Executive focus |
CIO or line management |
CFOs or CEOs |
Prior outsourcing experience and sophistication is important when going global. When new service markets and providers are involved, however, buyers must still review all past premises and experiences to determine their relevance for the new situations and markets. Buyers must ensure they are adequately educated on the new markets and their representative service providers. For example, experience with a Canadian (as a “nearshore” location for U.S.- based buyers) or even the Indian regulatory, legal and intellectual property environments is very different than what a buyer will face and experience in a market like China.
