Transformational Outsourcing
During the past few years, we have heard a lot of whining in the
media about outsourcing and offshoring. Let's look for the
opportunities in these irreversible trends (and ignore the
whiners!).
By fully leveraging offshore talent (a strategic view of global
sourcing) we can improve productivity, increase quality, and
create American jobs. Yes, I said "create America jobs."
An aggressive outsourcer in Pasadena, California named IndyMac
Bankcorp has risen from the twenty-second largest U.S. mortgage
issuer to the number-nine position in only three years.
According to IndyMac's CEO, they are more productive, more cost
efficient, more flexible, and provide better customer service
than the competition because of IndyMac's outsourcing and
offshoring partners. India's Exlservice Holdings (with a staff
of 5,000) handles over 30 of IndyMac's back-office processes,
including bill collection and the "welcome calls" that assist
American customers. IndyMac is also using New York-based
Cognizant Technology Solutions Corporation to develop
next-generation software, which will increase productivity by as
much as 20% by 2008. All of this outsourcing and offshoring has
led to explosive growth. IndyMac has doubled its American
workforce, in just four years, to almost 6,000 jobs.
Charlotte-based Wachovia Corporation has a $1.1 billion deal
with India's Genpact to handle finance and accounting jobs, and
a separate deal with Illinois-based Hewitt Associates to handle
administrative and HR programs. But, it is not just about cost
savings, it's about growth! Wachovia plans to invest up to 40%
of the $600 million to $1 billion in savings in core business
growth. Wachovia's Director of Corporate Development believes
this is what is necessary to become a "great
customer-relationship company."
Eli Lilly and other "big pharma" companies are facing
unsustainable costs to develop new drugs. Lilly now does 20% of
its chemistry work in China for one-quarter of the U.S. cost.
Lilly plans to expand these efforts into Russia, China, India,
and Brazil.
Many new companies are using outsourcing and offshoring from the
start. California-based Crimson Consulting Group (with only 14
full-time employees) is able to compete with the world's largest
consulting firms (including McKensey and Bain) by offshoring
research. Crimson uses India-based Evalueserve, as well as
independent experts from around the world.
Wise leaders (and consultants) are now asking for articulate
outsourcing/offshoring strategies. Are you familiar with the
wide array of business services, software development, and call
center resources that are currently available?