Fifteen years ago, an international shipping company selected ACS, the U.S.-based technology company, to provide imaging and data capture on billing information. ACS bunched up 25 employees in Utah to work on this project. Things went well for some time, but then the customer’s demands gradually increased. A flourishing international shipping industry necessitated a solution that processed documents as fast and accurately, as they delivered the packages. So, to meet the customer’s increasing global document processing needs ACS chose what is now called a Global Delivery Model (GDM) — multiple document types in various languages to be turned around in record time — . ACS’ multicountry strategy with 1,600 employees across the U.S., Mexico, India, Africa, Guatemala and the Philippines dramatically improved the cycle time from six-hour turnaround time to a seven-minute turnaround.

Even though ACS’ outsourcing relationship with this customer started a decade and a half ago, the trend of GDM caught up just a few years back. Currently, service providers such as IBM, Infosys, TCS, Satyam, ACS, CSC, Accenture, Genpact and Wipro are increasing their global presence to deliver services under GDM.

“If you were to look at it five years ago, typically it would be an onshore or offshore model where you may have number of people onsite or in the country itself. Or may be 30 to 70 percent of the work being farmed out to an offshore location depending on the type of processes. Today, when you look at the situation, you are not looking at it for the higher percentage of work shifting overseas. You look at it from the ‘multicountry sourcing strategy’ where one particular process doesn’t necessarily have to be confined to one country. So, you might have a call center being based in the Philippines, you might have some of the back-office, analytics, application or support work coming out of India, or might have infrastructure services coming out of Malaysia,” said T. J. Singh, Research Director, Gartner Research. 

Is multicountry sourcing strategy feasible for all? How are such projects managed? How are the resources allocated? What are benefits? An inside look at such globally
distributed projects.

A Budding Global Delivery Model

Established in 2007, an Indian outsourcing setup called Anantara Solutions works as a virtual company. Backed by international venture capitalists including Helion Venture Partners, Walden International, The Silicon Valley Bank Group, Christian Wedell, a former senior Microsoft executive and venture capitalist, the company has geared up with a vision of radical transformation of the First Generation Outsourcing (FGO) model. It sees the implementation of Second Generation Outsourcing (SGO) — based on a partner-enabled global delivery model — across the globe. This model is now also getting attention in international forums. If it works out well, this could enforce the Indian hotshots to change the way they execute their global deliveries. Global Services’ Imrana Khan looks into the way this virtual company and its global delivery model runs With a customer base of 50 companies in 15 countries, Anantara works as an interface between its global partners from its ecosystem, “Anantara Ecosystem,” and customers. Anantara Solutions’ ecosystem has partners with various generalized and specialized outsourcing firms from various geographies. Anantara evaluates and chooses among its global partners. Being the prime contractor, it provides a business improvement solution — business strategy, process, IT performance, and change management — to its customers and ensures customers’ satisfaction by integration, program management and business value delivery. In partner-enabled model, Anantara gets paid for value received instead of charging for a fixed cost burdens of wages, real estate, and such, as it happens in the case of established Indian firms such as Infosys, TCS and Wipro. So it works on value-based pricing and risk-reward based pricing. “Our business paradigm radically improves FGO, which is primarily based on cost arbitrage. So we provide business solutions to our customers to draw business value, and have a vision of transforming FGO soles to SGO,” says G. B. Prabhat, Founder and CEO, Anantara Solutions. “Apart from providing innovative value-based pricing and complete business solutions,  we also help our customers migrate from data management to knowledge management capitalizing on business-specific organizational knowledge.” To study the advantages and the capabilities, we studied some real-life cases wherein Anantara has been the prime contractor. In the first case, Anantara works for a Hong Kong-based garment-manufacturing conglomerate. The manufacturer was facing challenges due to declining productivity and surging costs of procurement, particularly from the company’s supply chain partners in mainland China. Anantara’s SGO was applied to solve the customer’s problem. Anantara delivered its business solution while other services were distributed among its partners from its ecosystem. Significant parts of the procurement portal were outsourced and bought from a Chinese company and testing services were bought from a specialized Indian firm. To allocate the resources, Anantara also mapped out detailed workflow and distribution of resources to keep some part in-house and distribute the rest among the chosen partners. However, the company faced the challenge while orchestrating a global supply chain of companies to provide the customer with a seamless experience and tightly focus on business improvement not merely high quality IT. This model markedly improved the productivity and reduced the cost of procurement. In the second case, a leading Indian integrated multimodal supply chain provider chose Anantara to improve its productivity and reduce in errors at customer warehouse. An immense increase in business volume was also required. For delivering a business solution for this problem, Anantara and its India-based partner were responsible for solution design and integration of client ERP with EDI while the Canadian partner supplied EDI-related services. And as expected, the improvement was noticed in productivity and the errors were also reduced. It is certain that if this model taps the world’s attention, it will enforce the tier-1 Indian outsourcing companies to think over the way they work. Even the customers will think over it twice before choosing partners from the FGO and SGO lots. However, at this initial phase, this model may also fetch challenges to Anantara in terms of establishing credibility among prospect customers in terms of assuring its partners’ ability to deliver services and managing a vast ecosystem of partners from various geographies.