Egypt – A highly viable outsourcing location

January 22nd, 2008

When the US domestic voice outsourcing industry began to evolve beyond the borders, we first saw several near-shore location options such as Canada. The motivation and value proposition was primarily staffing. Several US cities had become saturated with centers, staff turnover was high, and the staffing pool skill sets diminishing. Canada offered a viable option with a good skill set of available, highly dedicated representatives and a close proximity to most US locations. Given the exchange rate at the time, Canada offered slight cost reductions (but not significant commercial economies).

Next up was a few limited Caribbean and Latin market countries. They were really the first locations to offer reduced sourcing costs for US companies. However, the options were limited, the scalability small, and the companies mostly limited in management and staff experience.

Then came Asia and the sub-Asian continent and with it ushering the true Global Outsourcing Industry. The first applications were mostly technology related development and programming along with low-end back office and data entry type processes - however voice was soon to follow. As the technology and telephony infrastructure capabilities of countries like India and the Philippine Islands expanded, with it came rapid expansion and a continued growth of process applications being sourced. India, in particular, has seen amazing growth in the last decade. The India based sourcing providers offer the staff skill sets, educational backgrounds, quality of management, and true scalability required all coupled with a costing structure that is perhaps half that of domestic providers offering similar services.

Now that the Global Sourcing industry is in full swing, the list of countries with companies offering sourcing services continues to expand. The Caribbean and Latin markets have several viable options: Mexico, the Dominican Republic, Panama, Costa Rica, Argentina, Columbia, among many others. European locations like Northern Ireland offer a higher end solution. China seems to be on everyone’s list of upcoming locations (though whether they will be able to offer an integrated voice solution is doubtful). Eastern Europe has several options including a growing Russian and ex Soviet Bloc base of providers. The African continent is also not without options in South Africa and even countries like Kenya (yes, political unrest aside – joining the Pakistan conversation in sourcing).

Each of these locations has varying degrees of viability related to the overall value proposition based on the application being sourced. Typically, the primary considerations when looking offshore are: skill set of staff, management experience, corporate resources, scalability, travel distance, voice enunciation (relative to US accents), and, of course, costing. Finding the ‘perfect mix’ is no easy task for any process. While each company will, of course, vary, we can generally say some locations may offer highly educated staff, scale ability, good costing, but less than desirable accents. Others may offer a closer proximity, fair cost models, a better US cultural understanding but have limited ability to scale. Others may fit every need but the costing is significantly higher than most.

All of these considerations make choosing the perfect offshore souring provider for one’s application quite challenging. One IndusFusion team member described the perfect Sourcing Partner this way: “I want the staff educational background, scalability and costing from India (or costing from Argentina). I want the US cultural understanding and sales service orientation of the Philippines. I want the bi-lingual ability of Mexico, the easy flight to The Dominican, the location site visit of Panama or Costa Rica, the technology head for my process to be from Northern Ireland, and Canadian team supervisors for my staff. And we would add that you could plug in 3 or 4 countries for each of these needs/desires.”

The net of the above comment is – to put it casually – it isn’t gonna’ happen. So what we are left with is finding the best mix of all. Those country locations, and companies within, that offer as close to the best of each consideration as is possible. At IndusFusion, we think we have found the next potentially great one – Egypt, and in particular a company called Xceed. As many of our friends and clients know, we do work currently all over the globe, and we have a credible understanding of ‘what best fits where’. Given this, the Medetranian-North Africa (MENA) market, with companies like Xceed, seem to fit the bill well for a wide variety of applications. The staff skills sets are high, the costing is very favorable, the accents neutral, the management experienced, and it’s hard to beat a trip to Egypt and experience the culture and history during those ‘non working hours’. So to those ends, some members of the IndusFusion team has partnered up with Xceed (the leading MENA region entity) to bring this solution to our other partners and US clients seeking that ‘perfect mix’. Please review the linked Datamonitor report for detailed information on the MENA region. You can also review Xceed’s corporate brochure, or give us a ring to discuss more and see if Xceed may be a fit for your sourcing needs.

Until next time, we will be out there seeking out and partnering up with the best in BPO and Shared Services Industry.

REPORT
Report

XCEED BROCHURE
Report

Happy New Year

January 2nd, 2008

A new year and a renewed focus for us related to this blog. Expect us to be much more active this year with our commentary, shared ideas, highlights of industry happenings, and plain old random thoughts.

We have many exciting opportunities upcoming for the IndusFusion team. 2008 promises to be quite the year for the BPO space. We expect the upcoming year to be the most evolutionary year ever - new applications, new markets, lot’s of M&A, and of course some political gamesmanship as it relates to offshore sourcing.

The IndusFusion team also plans to be very active this year in getting out to the many shows, conventions and big events withing the BPO space. To those ends, we are most excited about one of the first few that are upcoming - IQPC’s 12th Annual Shared Services Week. This is a great event, worthy of attendance by anyone within our field. The featured speaker lineup, the conference workshops, and the sessions are all ‘best in class’. Please do take a look at the event and plan to join us there (Information and link follows).

Again, Happy New Year to everyone, and may your 2008 be prosperous and joyful. All the best from the IndusFusion Blog Team.

Shared Services Week

Save the Date for Largest Shared Services Event in the World

IQPC’s 12th Annual Shared Services Week is the largest annual gathering of Shared Services professionals in the world! This can’t-miss multi-tracked event is designed to provide executives from start-ups, intermediate and mature shared services with everything they need to know to bring shared services to the next level. Featuring outstanding keynotes, an impressive speaker faculty, workshops, master-classes, and the shared service excellence awards, there is little the Shared Services Executive could want outside of this conference.

Register now to secure your place in IQPC’s 2008 Shared Services Week. We look forward to seeing you there.

Current Strategic BPO Opportunities

July 21st, 2007

Strategic Opportunities

A listing of IndusFusion’s current Strategic Venture Opportunities within the Outsourcing arena. If your organization is looking for expansion via equity or non-equity capitalization, joint ventures, new geographies, marketing partnerships, or even simple business development support, please contact our team to discuss how we can help.

For a current list of our more focused efforts, please Click here.

Marketing Partner Opportunities

July 21st, 2007

AMP Opp

As most of our current Delivery Partners (DP’s) and Associated Marketing Partners (AMP’s) are aware, IndusFusion is focused on Strategic Ventures in the BPO space. However, we are also a highly opportunistic firm, with the capabilities, resources and experience to successfully execute most any outsourced business or knowledge process required – regardless of scale, scope or application. To those ends, we thought we would share a few ‘real world’ examples of situations where a call to IndusFusion could be an ideal solution.

Click here for details on how we may be of benefit.

Clinton and the Politics of Outsourcing

July 9th, 2007

anti outsource

Here we go … Let the Politics of Offshore Outsourcing begin anew – or shall we say continue. Ms. Hilary Clinton gave a ‘satellite speech’ to the IIT (India Institute of Technology) alumni last week.

Among her comments were:

“I am concerned that trade is becoming a zero-sum game, instead of being a means to lift up all who participate”

“If globalization pushes down US wages, other countries will be affected.

“Workers in the U.S. are concerned about outsourcing, as I’m sure you know. And I think they have a right go be,”

Our take is like the current immigration ‘conversation’, outsourcing will be one of the political rhetoric whipping boys over the next year. Typically epitomizing another topic where the politicians fully understand the big picture, yet will placate speech to the masses with a nationalistic focus. If you take these comments to heart, you could be lead to believe that the New York Senator is sounding an alarm to the future of protection-free global sourcing. Thankfully (or hopefully) we all know better.

This year, like all election years, will bring even more anti-outsourcing bills and protectionist talk to congress. Hilary’s not alone, Obama’s opposition talk about outsourcing is even worse, and the Republican candidates are not free from negative rhetoric either. So we know the talk is coming, let’s just continue to assume that also like most years it fades into obscurity like it always does post election.

Private Equity Firms Turn to Global Sourcing for Returns

July 9th, 2007

Report

An IndusFusion friend and business associate discusses the topic of global sourcing’s influence on private equity in a new report published by NeoIT. The report discusses how increasingly, private equity firms are leveraging global sourcing to drive additional returns from their investments. Global sourcing can be a strong asset for firms looking to improve savings and enhance company value as well as streamline the operating model. The benefits of global sourcing, from predictable cash flows and the ability to finance the investment, make it an attractive management tool for private equity portfolio companies, particularly during the divestiture phase. While global sourcing has inherent risks, with sufficient planning, the risk can be calculated and managed.

Please click image (or here) for the full article.

About the Author:

Ravi Narayanan, Vice President, Platinum Equity
Ravi helps portfolio companies improve operational productivity through process optimization and outsourcing. He brings in two decades of global experience in Outsourcing, Business Development and Information Technology.

Outsourcing Myths (IBD editorial)

June 20th, 2007

An excellent editorial by Investor’s Business Daily. A good follow up for our recent post on Alarmist Protectionism. IndusFusion would have enjoyed adding even more evidence for the editor’s story line.

=========================
Outsourcing Myths

By INVESTOR’S BUSINESS DAILY | Posted Tuesday, June 19, 2007 4:20 PM PT

Journalism: America’s companies are shutting down factories and offices, and shipping jobs wholesale overseas. That’s how the media have portrayed it. In reality, outsourcing has created more, better-paying jobs here.

Beyond The Bias: Sixth In A Series
More on this series
Read the rest of this entry »

Outsourcing Conferences, Conventions and Seminar options

June 20th, 2007

IndusFusion has been in the process of considering the upcoming events that we plan to attend over the next year or so. We thought we would share a brief ‘take’ on the various options out there and which ones we are considering attending.

In the ‘good old days’ Outsourcing and BPO was focused around voice and IT applications and the events were fairly limited. But in the last decade or so with the growth of offshore providers and seemingly limitless applications, there are now hundred’s of choices for groups focused in the BPO space (or companies with internal applications and staff conducting service and support functions).

These offerings include conferences, expos, summits, seminars, association meetings, etc. For the most part they are sponsored by the major associations, the industry publications, and the larger research and consultation firms.

With so many event options now, there is just no way to attend them all. So determining which events you or your companies choose to, or could benefit from attendance is very important. Several factors that should be considered:

1. The first consideration criteria should be; what is the primary need or value we are looking to obtain? Is educational information paramount? Is it networking? Business development? Something else?

This is important because different events have different focuses. Some are excellent if the need is to have your operational or service management gain insights into best practices, or new applications, hear case studies etc. While others may have little or no value in terms of the educational tracks offered (as they are obligatory or simply rudimentary), yet they offer an excellent venue for networking among ‘C level’ executives. Others have a distinct technology focus, which may be great to send your IT executives, but your VP of client services would find little or no value.

The point here is to consider: what is the key criterion I am looking for - then decide. The ‘biggest and best’ is not always the best for your needs.

2. Next is to consider - who is going. At many events we see companies who have a huge presence of staff. They will have Executive, Technology, Operational, and Client Management staff all at the same event. While we appreciate there may be incremental value in the old ‘show of force’ at an event where you may have many clients in attendance. Perhaps there are also some commercial economies (shared rooms, discounted rates with volume, etc)? However, it’s hard to believe the event will provide value across multiple company disciplines.

Most events primary value can be broken into three areas:

a. Educational
b. Networking and Business Development
c. Association and Industry Support

Look into the previous offerings the event provided, ask around, see where the focus has been and send the right team members to the right event.

3. And the last key consideration - budget. Typically you will have an annual expenditure you would like to keep within for such activities. Event costs can have a dramatic range, from low cost (or free) local chapter association events to large international conferences with high dollar attendance fees. There may be a show that would likely prove very beneficial, but yet with attendance cost, travel fees, etc sending just a couple of staff could put a huge dent in your budget. Could skipping that one in favor of adding three other shows that would have the same cost combined prove more beneficial even if the costly one would be your top choice overall?

Look into the various options for attendance. Some offer different levels of attendance, full conference, conference with sessions, special events, exhibit hall only, etc. Take a look, it’s not uncommon, in particular with executives, for someone to sign up for a full conference and between meetings, dinners, golf, etc never even get into a session. Why not just take the exhibit hall pass only if it is allowed? Heck, it is not even too uncommon now-a-days with restricted budgets to send business development people off to a show where clients and potential clients will be and not even sign up for anything – they simply set meetings before hand, hang out at the location or hotel and do business.


To our thinking, local association events, chapter meeting, etc should all be ‘no-brainers’ – you should be out there, networking and supporting your industry. You should have representatives from every discipline of your company at these local events.

For the larger industry conferences you should have Executive and Business Development teams. The old saying always proves true…”if we get just one deal out of it..” – just make sure you pre plan as best as possible, setting meetings, letting others know you will attend, encouraging your clients attendance, etc.

The educational focused events is where you really need to do your homework. Many times these are the costliest events, yet perhaps the most beneficial to your organizations future success. Don’t let the VP Sales head out to the show just because he wants a Vegas trip in February and likes the local desert golf courses. Look at the real value, and send some of the support and service leaders of your company – the people who would gain from the sessions. If they have some fun along the way too, well, that’s just an added perk you offer.

Our brief take on (just) some of the many options in the Business Process Outsourcing (BPO) space. We will for sure see you out there at some of these.

EVENT ENTITY

NOTES

IAOP
Orlando, Florida
Feb-18-08

11 years running now, started by Michael Corbett and Associates.  Much more executive focused than many.  Larger outsourced users and providers of services.  Many ‘C level’ executives along with Senior staffs in attendance (more than most).  Good for executives, not internal staff.  Good for large users of outsourcing services and business development teams for providers.

DMA
Chicago, IL
Oct-13-07

One the old biggies’.  Been around forever and surely one of the better networking events as it still has a decent attendance.  Little to no value in any sessions, but the exhibit hall is well worth attendance.  Over the years focus more on direct mail than teleservices, now more integrated marketing with web, etc.  Best for business development members and companies looking for direct marketing related service vendors

DMA Teleservices
Las Vegas, NV
Jun-10-07

A niche group within the DMA focused on teleservices.  Mostly call center provider (and user) oriented.  More senior and executive attendance.  Networking main value, with this event attracting many ‘teleservices old timers’.

ICMI ACCE
Sep-10-07
San Diego, CA

Annual Call Center Exhibition.  Offers Exhibit Hall only so get decent attendance.  Exhibitors are technology focused, those session offer wide variety with several ‘session tracks’ allowing for targeted role/position based education.  One of the larger ‘voice focused’ shows. 

ICMI Call Center Demo
Dallas, TX – Miami
May-00-08

Value here is near pure call center technology education – and it’s one of the best for that niche.  While some networking value, sending folks outside of the IT group will not offer up much benefit.

Call Center Week
Las Vegas, NV
Jun25-07

One of the largest call center focused events.  Several educational tracks, exhibit halls, etc.  Attendance includes many department heads of companies with internal call center operations – so more internal than outsourcing focus.  Excellent speaker profiles and one of the premier shows if education is your primary goal.  Though we wonder why have Vegas as the location for an education focused event – too many distractions….

SOCAP  
Palm Springs, CA
Oct-07-07

An association event focused on Customer Relationship Management.  A great association for customer care professionals and knowledge gain within that scope.  The events are very educational driven (with perhaps some networking value), however offer little to outsourcing providers.

ATA
Scottsdale, AZ
Sep-30-07

An old favorite of ours.  Sadly through the years the event has diminished to being mostly a social networking event for large users of outbound telemarketing services and the vendor companies who support them.  That said, we will always be there to support the association and connect with our old buddies – and hope the ATA learns the lesson of the railroads: you are not in the railroad business you are in the transportation business. (i.e. you are not in the telemarketing space – you are in the outsourcing industry).

Gartner Outsourcing Summits
Sao Palo, Brazil
Jun-20-07

Gartner’s events are always a little niche but typically a high value niche.  Smaller, executive focused education, but the driver is always Executive Networking.  They have come down on their costs lately for these events and are worthy of consideration.

Center For Global Outsourcing
Atlantic City, NJ
Sep-06-07 

A smaller event with a global focus.  IT oriented in the past.  Future seems to be new and growing geography opportunities in the sourcing space.

Contact Center World
London, Melbourne, Vegas
Various throughout year

Various throughout the year ‘awards focused events’ in several locations.  Excellent for networking in a casual environment.  No educational value, and little business development.

The Conference Board
Shared Services Oct-23-07
Chicago, IL

Their  HR outsourcing and a Shared Services events both offer excellent learnings within the targeted areas of outsourcing.  The Conference Board has always been recognized for the educational value of their events.  If your need is HR and Financial related sourcing knowledge, likely an excellent option.

Outsourcing Institute
NY, Chicago, Atlanta
Various throughout year

A ‘traveling’ event specifically targeted toward buyers and sellers of outsourcing services.  Buyers are sponsored to attend where they are put in front of larger and well qualified providers.  High profile – high cost (at least if you are a seller of services).  An excellent concept, but we have no feedback on how it has proven out as of yet.

CCNG Seminars
Various regional locations
Throughout year

A worthy association with multiple local and national chapter events throughout the year.  No ‘main annual conference’.  Great small, day only events to send every company department head based on the current session topics.

Call Center 2.0
Los Angeles, CA
Sep-10-07

Another one of the larger CRM and Call Center technology focused events.  This one however was started by our old buddy Nadji Tehrani.  Times have changed: TMC is now ran by Nadji’s son Rich and Customer Interaction Services has long replaced Telemarketing Magazine (which btw, some of us old IndusFusion types had contributed many times), but TMC still puts on a quality show.  Their VOIP conference is also worthy.

EMRG BPO Conference
London, England
Jun-20-07

A consultancy sponsored international event.  Large ‘non US’ group companies, and an excellent cross section of countries are represented (while still a UK focus).  True Outsourcing emphasis (so no adjunct filler), smaller in scale.

SSPA
New Orleans, LA
Sep-30-07

We have never attended, though several customers have provided feedback:  Focus of shows has been more ‘best practices’ education driven.  Not really focused on networking.  More for execution teams of Service and Support.  Speakers and presenters senior (not executive) management levels mostly.  $2500-$3000 per attendee.  Would recommend for internal team members running an integrated support process across multiple platforms.

NASSCOM (BPO event)
Bangalore, India
Aug-06-07

Aside from the domestic provider space, India has the greatest number of outsourcing provider groups – and NASSCOM is the largest association.  While traditionally an emphasis on IT sourcing, general BPO is picking up steam for the association and is reflected by their growing amount of events surrounding outsourcing (IT or otherwise).  Many worthy sessions, though they remain primarily targeted to India domestic companies. 

VARIOUS NON REOCCURING
Accenture
Everest

More soon

BPO Sourcing Insights

June 4th, 2007

outsourceAn Industry Veteran shares some keys to outsourcing from a client perspective

I thought I would launch my initial input by sharing some of the insights I have gained from working in the contact center and BPO space for the majority of my career. Most of these insights will be from the client perspective and are intended for you to get the most out of your existing or potential BPO engagement.

Rule Number One – Outsource for the right reasons. Are your objectives purely cost related or is outsourcing part of a larger enterprise strategy to leverage specialized firms for business processes that are ancillary to your core competency?

Rule Number Two –Outsource only what you can effectively manage. I have had the experience as a client of outsourcing multiple components of an enterprise support solution and the key was to develop an internal assessment for the suitability of various processes to actually be outsourced. Criteria to be considered include the following:

• Process maturity
• Process complexity
• Process stability

In other words, if your processes are not mature from a documentation, monitoring and baseline performance perspective, you will burn more energy and resources hand holding your outsourcing partner instead of monitoring performance results and working on process improvement initiatives. If you haven’t yet figured out what works best in your own backyard don’t expect a partner across the country or across the world to figure it out on their own.

Rule Number Three –Create an enterprise benefits realization methodology “before” you cut a deal. Some corporate managers make the assumption that an outsourcing agreement with attractive rates will automatically produce the desired financial benefits assumed. This may be true for the manager’s direct budget but how about the rest of the organization? If companies are not careful, they can get caught in a ”switch and bait” exercise of shifting costs from the outsourcing manager’s budget to the enterprise at large where the cost is obscured from association. What end’s happening is simply the transfer of the Outsourcing manager’s costs to other departments via lost employee productivity due to additional time needed to engage the outsourcer in everyday business processes.

Rule Number Four – Know your business better than your outsourced partner. If you think your outsourced partner will execute your processes better than you can without consistent investment of time and managerial oversight you better think twice. The responsibility for execution and performance results rests on both the client and the outsourced partner. Too many times client firms will throw processes “over the wall” and expect the outsourcer to manage everything to expectation without any client commitment to shared responsibility.

Rule Number Five – Treat your BPO provider with the level of respect and integrity that you expect to be treated as a client. There is nothing worse than to see client representatives operate from a domineering or bullying perspective. It is unprofessional and displays a lack of integrity and maturity. The impact of that can result in your BPO partner becoming less motivated to go out of their way or bring creative solutions or innovations to your business because they know you don’t respect them as true partners. Fix your attitude and watch how much your BPO partner will advocate for you internally. Not only that, they will also be more engaged and committed on your daily, weekly and monthly Operational and Business review sessions.

© 2007 Tracey Powell

More alarmist US protectionism or worthy concerns?

May 24th, 2007

Rep Pic
Alan Blinder a professor of economics at Princeton University, vice chairman of Promontory Interfinancial Network and vice chairman of the G7 Group recently penned a Washington Post article raising another Lou Dobbsesque ‘the coming tragic effects of offshore outsourcing to the US economy’ alarm. While Mr. Blinder’s piece (I’ll avoid the pun reference as I am sure he has had well enough) supplies some depth to the more relevant issue (what needs be done), he, like most of the rest, falls short on what we believe should be the conversation: How does the US best take advantage of the inevitability? Turning what we believe already to be actually good news for the US, into an even greater success story.

    Some points we feel not represented in the story

(and we won’t even speak to the altruistic values unrepresented as always)

1. With the possible exception of China, most economist agree the other large and expanding offshore outsourcing markets will evolve into huge surplus trading partners with the US.

2. If US corporations are unable to leverage the costing economies of outsourcing to these geographies, it will not be long until their market share and competitiveness against like Japanese and European entities who do outsource will soon fade. The end customers will migrate to lower cost products and services offered by the foreign competitor entities, the US companies will cut jobs, stock prices drop, stock holders lose money… we are not Princeton economist but I think we see the potential negative impact here beyond just jobs.

3. Will somebody please do a study that shows the impact of jobs and capital coming back into the states directly attributed to these offshore service providers!? Our bet is offshore outsourcing is pretty effect neutral with this contribution alone.

4. ‘Time to market’ - the reference always used as to why US corporations utilize offshore resources is always “lower cost than US equivalent staff”. This simply is not true. For example: it is very common, from tech based startups to Fortune class firms, to have a development need arise that requires lots of staff in a short period of time to complete a current project. Going out and quickly hiring a large US based team with high end development skills in short order just is not feasible in many cases. Again, perhaps Mr Blinder can share the economic effect if ManilaSoftwareServices Inc. gets their Microsoft Vista equivalent product to market first? (I know that’s a stretch example, but the point remains).

5. Many sourced efforts are not ‘jobs’ at all. They are simply short term project needs. Would we prefer to develop a societal class of temporary employee’s?

6. It is typical in sourced IT projects that what is offshored is the more mundane, lower end activities. This leaves the true IP class development for the US employees. Thereby leading to a more skilled employee stateside as their efforts are focused on the true sunrise activities versus (his words) “sunset” ones. It is these sunrise teams that allow for the US’s continued leadership position in creating and bringing to market new technologies and industries.

Does the VCR evolutionary cycle ring a bell? Remember when the alarm went off when we had developed a new technology but it was the East who were reaping all the rewards by selling the players? Yet in the end, the low cost players ended up spawning hundred’s-of-thousands of new US jobs based on the growth in related and new industries because of the mass availability of the players.

7. We would also ask that Mr Blinder share some of his expertise as to the effect to the US economy if, for example, consumers have to pay $1800 for their new laptop versus $1400 because Dell, Microsoft, HP, etc have to move out of India and replace those roles with higher cost, greater benefit US employees?

We of course could go on and on. But our objective to comment on the piece is to encourage the conversation be directed toward taking advantage of the marketplace realities versus the same old alarmist propaganda. The article offers a couple of excellent thoughts to that direction: “rethink our educational system”, “invest in our capital markets to keep them strong” “directing future educational activities toward roles that cannot be sourced”, etc.

There are surely a lot more ways to leverage the opportunity, many that even the most protectionist commentators could agree on. For starters, how about more US investment in these growing markets? The bottom line is the conversation needs to change. Leveraging the ever changing global marketplace has been a US forte’, let’s keep it that way, and at the same time enjoy and appreciate the contribution outsourcing provides - both abroad and domestically.

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