What's This India Business? Offshoring, Outsourcing and the Global Services Revolution

Citation

Walz, J.T. (2005), "What's This India Business? Offshoring, Outsourcing and the Global Services Revolution", Leadership & Organization Development Journal, Vol. 26 No. 6, pp. 506-507. https://doi.org/10.1108/01437730510617717

Taking manufacturing overseas to create competitive advantage has become commonplace in the world of global commerce. A similar practice that for the most part, is still thought of as impractical or exotic by many is the notion of offshore outsourcing of services such as call center staffing, payroll and administrative work, and information technology (IT) development, among other things. However, concerns range from quality of service response to stability of the workforce. These issues can dissuade even the most daring companies from venturing into this potentially very profitable competitive strategy. Paul Davies is one of only a few who fully understand the processes and implications of this very compelling strategy. Paul has spent a great deal of his adult life living and working in India where much of the outsourcing of services is going, and Paul has been in the thick of it from the beginning. His work for Unisys India, transferring IT development and business processes to India, establishes him as a genuine expert in this area, and his knowledge has been captured in his new book, What's This India Business? Offshoring, Outsourcing and the Global Services Revolution, published by Nicholas Brealey International (2004).

The book is broken down into three sections; the first begins with a comprehensive discussion of taking business functions offshore. These are the “whys” of outsourcing; mainly to gain competitive edge. Paul reminds us that companies have core and non‐core functions within organizational processes and discusses how to determine which should be candidates for outsourcing. He then goes on to describe seven criteria for choosing a supplier:

1. 1.

   management capability;

2. 2.

   alignment with western business practice;

3. 3.

   competitive threats;

4. 4.

   size;

5. 5.

   understanding each other's strategic objectives;

6. 6.

   shared objectives; and

7. 7.

   intention.

This section is especially profound since finding a good and trustworthy supplier of services is probably one of the greatest hurdles faced by a company that is contemplating offshore outsourcing. A mismatch with an incompetent service provider can mark the end of a company and at best, require a hefty public relations campaign to regain market share.

The second section of the book is interesting with regard to getting around India and navigating the culture and customs, but I felt that most of this could be found in any reputable travel text such as Fedor's Guide to India or Bradt's Travel Guide. Paul does, however, cover some of the more important customs related to decorum in business meetings, and helps establish reasonable expectations in the mind of the reader.

In the final section, Paul provides some information and recommendations on how to tailor to the company's needs, the acquisition of, or strategic partnership with an outsourcing company, and to determine the optimal degree of outsourcing. This is probably the greatest strength of his book. He also goes into detail on the due diligence process and the intricacies of negotiating in the Indian culture. Of particular note is his discussion regarding “cost avoidance” as a benefit of the outsourcing strategy. Although difficult to list on a financial projection, “cost avoidance” is gained when cost savings through outsourcing can be applied back to fund new opportunities that, prior to the outsourcing initiative, were considered out of reach because of a lack of financial resources. This is true competitive edge.

Finally, I applaud Paul's initiative as he reminds the reader to consider their corporate social responsibility when doing business in India. This is meant to ensure a sound future for outsourcing to India and to maintain a true partnership with a nation that has met the challenges of the twenty‐first century global marketplace and far exceeded what many would have imagined and hoped for.