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Tackling Offshoring - Strategic Insights for Individuals

" I Just Have To Out-Run You "

Benefit From Gray Arrow A Kaytek Offsourcing Consulting Insight

Down Arrow Some Strategic Insights for Individuals and Organizations
To help Tackle The Mega Phenomenon of Global
Offshoring and Outsourcing Of Work.

" I Just Have To Out-Run You "

A few years ago, I was Co-Heading the participation of a Consortium of fourteen Indian Software Companies at the CEBIT exhibition in Hannover, Germany, exploring the Market for IT Services. This technology show is one of the best in Europe.

One of the stalls was exhibiting a Software Program Code-Generation Tool.

On seeing me, the sales rep remarked defensively " Why do you want this tool ?

Anyway, you Indian guys are the cheapest in the world."

This reminded me of the story of two friends who are walking in the forest.

Suddenly, one of them spots a tiger at a distance and exclaims to the other " Hey, A tiger there !

Both of us have to out-run him before he attacks us. "

The other friend listens to this outburst patiently.

He then sits down, puts on his running shoes and replies calmly " I don't have to out-run the tiger.

I just have to out-run you."

Today, India may be the cheapest with the best possible global quality in IT and other services, but once customers find other better suppliers wherever worldwide, work will move there.

The 'Wherever Economy' is a painful reality today for many of us.

Intel Founder Andrew Grove has referred to the Offsourcing Phenomena as 'Engineer on a LAN (Local Area Network)'.

It does not make much of a difference as to whether the engineer helping you is sitting in the next cubicle or in a remote location thousands of miles away in India or China.

Physical Proximity has been replaced by Virtually Wherever Work causing the Wherever economy.

This Outsourcing Trend does not just affect jobs in rich countries.

It also works equally well in poorer countries like India where there are economic disparities between high-wealth regions and poorer regions within the same country. Let me quote a personal example.

My company is based in Mumbai (Bombay) which is India's financial capital, being located in the state of Maharashtra, Western India, one of India's richest and most developed states.

Mumbai is certainly the most expensive city in India.

India has several states.

Bihar is one of the poorest Indian states on various indices.

Last year, our quotation for Information Technology ERP Integration IT Services for one of our Mumbai based Pharmaceutical Distributor customers was politely declined by them.

They had located an individual software engineer entrepreneur in the city of Patna, capital of Bihar.

They chose this Patna company because they had found his programming services delivered via the Internet cost-effective and of good quality.

This single-man organisation had quoted a fixed sum of Rupees 10,000 or US $ 220 annually for one-year of software support including enhancements, maintenance, bug-fixes with a guaranteed turnaround time of 3 working days.

Even though we pride our service level response time of less than 3 hours for our customers in Mumbai, there was no way in which we could have possibly matched the 18 US $ price per month that was being offered by this invisible (to us) competitor.

So, like the friend with the running shoes in the story above, all of us who are part of the digital jungle, have to constantly keep out-running others to avoid being gobbled up.

By other possible Global Cheaper, Better, Faster (and many times invisible) Competitors.

The Internet is enabling Economic Equalization Everywhere.

Just as water seeks to find it's own level, the internet is enabling global labor and talent to seek it's own level, irrespective of geography.

Sooner or later, every job whose activities can be electronically digitized will be distributed and done remotely.

The Outsourcing or Offshoring Ogre (to some) is not just about cheaper Options. It is about much much more.

About Identifying our Unique Strengths either as an Individual or As An Organization in a global economy.

It's about asking : What are we good at globally ? What makes us Special ? Where do we focus our energies for long-term success ?

Gray Arrow Email Us : Can we help in your Offshoring Strategies ?

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Updated on 4th March 2009
Posted on 7th February 2005

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