David Blake and Lance Travis of AMR Research this week released a note titled: "Offshore Outsourcing: Get It Right the First Time." [PDF] It discusses the importance of getting a company's offshore arrangements right, especially given the political backlash against offshoring. They make no mention of the practical backlash against offshoring (i.e. that it doesn't tend to really be better, faster, and cheaper) as I discussed in "Return to Sender" a few days ago.Blake and Travis identify six suggestions for laying the right groundwork with the prospective offshore partner, including:
- Include offshore executive-level vendor participation in early strategic discussions. Understand the vendor’s long-term vision, thought leadership, and proficiency for contributing in a multisourced environment.
- Focus on strategic and cultural alignment, business risk mitigation, and relationship management fundamentals during the initial stages of due diligence. Identify the partnership opportunities beyond the initial pilot or project that will drive business value.
- Assess, understand, and plan for the impact of introducing the global delivery model to your existing software, infrastructure, and services relationships. Align and integrate your overall vendor performance management approach.
- Migrate from a strategy that simply lobs tactical issues, positions, and documents back and forth over company walls to one that accelerates the level of collaboration as you move through the evaluation, selection, and contracting phases.
- Employ a communications strategy that promotes a more proactive approach to partnering at an executive and operational level. Create solutions and step forward with your discussions of key partnership goals and objectives prior to the traditional negotiation process.
Create an environment that strives to meet your offshore sourcing goals and capability alignment from the start. Integrate company and vendor cross-functional teams and jointly design and develop a proactive offshore governance model, meaningful program performance measures, and an overarching agreement capable of responding to your evolving offshore strategy.
Even afer noting all these suggestions (most of which are actually substantial effort, and rarely even undertaken with a development partner across town, let alone across the world, the analysts still caution executives to understand risks, expectations, etc with respect to offshore business. Basically, what the case study highlights is that the safest way to make offshoring work is to be willing to jump in with both feet and invest the time as if you have already made a final decision in favor of outsourcing.
This just doesn't strike me as a good sourcing practice. Even with traditional materials, most businesses test out a new supplier with small orders. Here the message is do it big if you're going to try it. Business sponsors should be asking themselves if it is really worth the effort, all things considered.
If you have comments about this topic, suggestions for future topics, or questions related to the governance of the IT function or the business-centric use of technology, feel free to e-mail me at eyetoIT@gmail.com.
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