With the continued growth and evolution of the global delivery model I thought I would go back to some thoughts that have always been bantered back and forth in regards to vendor approach to this sort of environment. For the sake of this discussion let’s create three buckets of Systems Development Company:
These are focused solely in providing consulting and services from locally available resources. These folks have a focus and are being squeezed by the offshore model to find ways of dealing with the low cost delivery models.
These are the pureplay offshore vendors whose solution starts with move to the 70-80% offshore and 30-20% onsite model and that is how they view the market. These have been in the past the Infosys, TCS, Wipro, Satyam type organizations
These are the global powerhouses who at one time were focused on delivering locally for projects, but had global footprints and are now focusing on also delivering via remote work teams. Examples are Accenture, IBM, EDS, CGI, BearingPoint and so forth.
The reason I bring these folks to the table is to talk about their approach to viewing a problem. This came from a client discussion today.
Each of these types of organizations approach a problem or opportunity in very different ways. None are wrong, they just generate different approaches and solutions that the client needs to understand. Here are my top 5 observations:
- Basis of solution – I call this the wheelbarrow effect. Companies that come from a low-cost labour pool often by default look to do build vs buy and integrate. This does not mean that is the solution, but the client needs to be aware. I remember putting together a proposal to add some campaign management to a transactional web-site built on BEA. When my solution came back, the solution was to custom build all of these components instead of integrating with the existing platform components. We solved the approach, but I have seen this over and over.
- Value – Cost is not value nor is it the result. Each vendor type sees value differently
- Focus – It is hard to cost effectively bring multiple delivery models to bear in a proposal for a client. I once heard a CEO of an offshore company going from the transition of local saying that if you allow an onshore option then that is what will sell, by only allowing the offshore option you will get offshore projects. I think that this is often the case of a client would prefer to have the consultants onsite or visible as opposed to half way around the world. Feels less risky even if it is no different.
- Understanding of the Model – It is very hard for the big global players now going into the true resource global delivery model to out of the gate understand the difference in model and be able to get their local delivery managers comfortable with this new model with different risks. If this is all you do then you should be better than an alternative (similar to Focus)
- Sensitivity and Public Perception – Perception is reality and organizations have real perceived views on how this may effect their employees, shareholders and customers and certain approaches make this easier. For example: outsource to IBM and let IBM move the jobs to India. At the surface and to the general public this will look local and the bad guy will be IBM or the offshoring will be unknown to anybody but the client and the vendor.
Just some thoughts based on the moves over the last 6 months by many different players. It does seem though that there is a race to the middle, with offshore pure-plays opening local delivery centres, local delivery organizations building or buying offshore facilities.
The real challenge is to focus on your organization capability, readiness, culture and strategy to best move through the ocean of choices.