Thursday, July 12, 2007

NASSCOM highlights offshore pitfalls


The chairman of the National Association of Software and Service Companies details how 85 per cent of businesses in the UK and US currently not outsourcing effectively can change their ways.

Despite the perceived benefits of outsourcing parts of a business' IT infrastructure, particularly to offshore destinations that have the scale and expertise to focus on specific tasks, the majority of enterprises are being held back by the fear of getting it wrong.

So says Dr Ganesh Natarajan, vice chairman of the National Association of Software and Service Companies (NASSCOM) and chief executive of Zensar, who hosted a recent roundtable debate about getting global outsourcing right first time and how to alleviate some of the outsourcing concerns many businesses have, such as losing control or adversely impacting quality.

Today, less than 15 per cent of the global market is reaping the outsourcing model advantage, with 85 per cent still adopting a wait and see attitude from the sidelines," he said.

"The challenge over the next five years is for organisations and the outsourcing vendors to honestly address a number of questions in the minds of prospective outsourcers, these include: application control, quality of service, ROI, service provider process overhead, cultural mismatch and the consumer experience. By working collaboratively, companies will not only realise the traditional benefits of cost and quality, but will also be able to achieve an even greater competitive advantage at a global level."

While India is the predominant location of choice for offshoring, other countries are gaining in popularity, most notably China and the Philippines.

One of the main issues cited by companies who haven't embraced the offshore outsourcing model is the fear of handing over control of the business and its data to people so far away.

"It's not just about outsourcing offshore. We can talk to an organisation's management and walk them through how they should potentially be outsourcing. They could do work onsite in the UK or nearshore in places like Poland or take work further offshore to India, China or Brazil, where we're hoping to set up a centre later this year," he said.

Transparency in outsourcing, whether that be onshore or offshore, is also key to success, advises Grewal.

"You need management buy in and lower down the chain as we all know lots of people who I what I call 'the invisible stoppers' who will say yes to your face but won't ever let those projects be successful, especially when it comes to outsourcing," he said.