Global Service Delivery: Get the Best of the World

Best Sourcing
The leading BPO companies all over the world are definitely practicing best sourcing aggressively in one-way or the other. Some companies look at it as mix of cost quality and competency from a particular country and some look at it as having multiple processes and choosing different vendors in different countries. It can be safely said almost all large projects are best sourced. The key thing is to source the right mix of vertical/domain skills and technology/application talent so that the client gets rich content with solid execution.

Benefits of GSD

Service Provider Point of View

Ability to deliver services by leveraging the local talent and competencies
Builds redundancy and geo-diversity
Adoption of best practices and replicating the same in all the locations
Mitigation of risk

Customers Point of View

Acts like a Business Continuity Plan/Disaster Recovery plan without substantially increasing costs as work is being delivered out of multiple locations.
Splitting of services into manageable components and delivering those services from different locations to bring down the overall costs.

Dream Destinations
Geographical locations, which can offer a cost and knowledge advantage and provide pools of accessible talent is the ones that are gaining share in the market. Prerequisites like infrastructure, technology and favorable government regulations are other factors that will determine preference to a particular destination. As per recent market studies, the leaders are India, Canada, China and Czech republic and Philippines to name a few. A few of the emerging destinations are Australia, Belarus, Brazil, Bulgaria, Ireland and South Africa while some of the early entrants are Argentina, Cuba, Fiji, Ghana etc.

India is growing as a very important service delivery hub in the global services supply chain. Indian service providers are becoming increasingly sophisticated, and have proven this in recent times. There is considerable depth of talent and unexplored/untapped locations in India from which a variety of services can be delivered.

The destinations that are emerging are those that are positioning themselves as the next India. Any destinations, which provide value the kind of value that the customer is looking at along with cost quality to value and language is expected to be the next destination.

China vs India
Though China lost out in the initial run in the global service industry (they are behind by seven years), it is now fast catching up to compete with India. It will continue to grow as more and more companies decide to outsource their processes. But the Chinese workforce is more qualified to target the Far East Asian markets due to higher availability of workforce skilled in the languages of those regions. In terms of English language skills, there is a gap, but China is making remarkable improvement in increasing English-speaking software engineers to sustain IT offshoring projects. The Chinese IT industry is divided into several smaller software companies. In order to draw an international clientele, the main challenge for them is to merge as a single, solid, reliable partner. On the positive side, the Chinese economy is aware of the drawback and 12% of the IT service providers are planning major mergers and acquisitions. In the meantime, the Indian companies are planning to takeover some of the smaller software companies in China and expand their service. India has a clear edge when in comes to application implementations such SAP, Oracle etc and application development. Many projects need offshore staff to come on on-site for periods of time. Indian vendors have more efficient H1 and L1 visa engines than their Chinese counterparts.

China Vs India

Challenges for GSD

Hot Destinations

Pros

State-of-the-art infrastructure
Advanced technology
Population and favorable
government initiatives

Cons

Lack of experienced English speaking talent pool

Understanding cross cultural sensitivity
Rising salary costs
High levels of attrition in developing economies

Philippines-BPO type services
China-IT and Engineering Services
Eastern Europe-IT and Engineering Services
South America-Spanish based BPO type services

Challenges
Indian BPO vendors have demonstrated the ability to lift a process off an American entity and do it in India with admirable results but adopting global services delivery is still a challenge. Finding the right partner and facility that complements the service providers operations poses a great hindrance in GSD adoption. Factors such as cultural and language differences need to be considered while planning global projects. In GSD data protection and security concerns of potential customers is also an issue along with the concerns of the customers on service delays or quality of service.

The challenge lies in going forward and moving up more complex tasks such as true transaction processing as opposed to data entry and call center work. Moreover, to ensure that your delivery is happening as per the standards and maintain level of predictable and repeatable performance from different geographic locations is also a major challenged faced by the BPO companies.

The Future
India will continue to lead the global BPO market but based on benefits of cost reduction, manpower availability, and quality that it brings to global organizations, destinations like the Philippines will evolve as the preferred destination GSD will continue to gain momentum as companies focus on getting the best at economical costs. It will become more robust over time as we have seen in the past with the manufacturing sector. Over time, customers are bound get very used to delivery of a wide variety of services from different global locations. The introduction of new technologies, maturing processes and practices will increase confidence in the GSD model with respect to customer data protection, reliability of service.

Sonia Sharma
sonias@cybermedia.co.in