Author Archives: ISG
The National Institute of Standards and Technology defines a hybrid cloud as a “composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or proprietary technology that enables data and application portability.” That definition raises a key question: what does “bound together” mean? The unsatisfying answer: “It depends.” An increasingly popular form of hybrid cloud, commonly called a “virtual private” cloud, has certain infrastructure elements, such as servers and storage, … More
Implementing a global service delivery model typically requires rapid mobilization of resources. Historically, global service providers have relied on a variety of visas to meet clients’ demand for skills and aggressive deployment schedules. However, this approach is becoming increasingly untenable. Organizations in the United States planning significant change initiatives could see their projects delayed by staffing shortages due to current restrictions on visas for foreign workers. A contingency strategy is essential, therefore, to adjust for delays in bringing service provider … More
A recent survey of IT executives concludes that poor-quality service remains the biggest risk of IT outsourcing, even though, according to respondents, SLAs are becoming increasingly tighter. In analyzing the results of the survey, conducted by IDG, CIO magazine reports that, “Lax internal governance and an overreliance on contractual obligations may be to blame.” We couldn’t agree more. Clients (and their business stakeholders) frequently complain about services – even when service levels are being met and overall services appear to … More
That’s the provocative and interesting question posed by a recent CIO magazine article. If you listened to your business stakeholders, you’d sue them every time the smallest thing went wrong! In fact, while most companies never sue their outsourcer (whether onshore or offshore), many clients are unhappy, and that unhappiness is often caused as much by the lack of clear governance process as it by the provider’s service failures. Contract language to address major breaches is important, but most problems … More
TPI announced that we’ve accepted a seat on the Corporate Social Responsibility (CSR) subcommittee of the International Association of Outsourcing Professionals (IAOP). If you’re not yet a member or familiar with the IAOP, it is the global, standard-setting organization and advocate for the outsourcing profession. The CSR subcommittee is one of the most active bodies within the IAOP, leading discussion among members on how the outsourcing community can identify and address critical social, economic, and environmental issues on a global … More
In-depth research from TPI Momentum continues to inform business leaders around the world. Nearshore Americas, an independent news blog dedicated to outsourcing in the Americas, recently highlighted TPI findings in its post LatAm is More Than a Delivery Destination: Domestic Demand Takes a Front Seat by Pablo Velasco, a TPI director who specializes in advising companies in Latin America. Pablo’s informed discussion of the growing trend in domestic outsourcing in Latin America stems from original, objective data collected and analyzed by … More
As service delivery destinations have become increasingly globalized over the years, selecting the optimal location for a sourcing engagement has become a more and more complex process. While the number of possible locations has grown dramatically, each destination is also busy self-promoting, creating a competitive atmosphere that further magnifies the difficulty of your decision. What might appear to be a relatively straightforward choice based on general awareness of popular countries and cities, selection is — in reality — a much … More
As my colleague Bobby Neil and I wrote earlier this year, if you’re looking to buy Software as a Service (SaaS), it takes diligence. It’s important to understand whether you’re buying a true SaaS solution or simply a repackaged, “on-demand” version of the software. The same can be said for Infrastructure as a Service (IaaS). A true IaaS service can, at times, be difficult to discern from a more traditional managed service. Unfortunately, many vendors continue to market and sell … More
Look for interesting news in the TPI Momentum 2011 review of outsourcing spending. We looked at outsourcing trends in 27 vertical and 68 sub-vertical industries throughout 2010 and found that, while overall outsourcing spending increased by five percent, conditions were highly variable across industries – with spending up or down by more than five percent in over half of the verticals. Here are the TPI Top 5 highlights from this year’s report: 1. G2000 companies increase outsourcing spend. In 2010, G2000 … More
Much is made of the importance of Cloud Computing, the endless options for what can be sourced to the Cloud, and the vast dollars that can be saved by moving services to the Cloud. But very little is said about what consideration should be given to specific financial structures and terms of a Cloud-based services agreement. Here are the TPI Top 5 financial considerations not to be overlooked when making Cloud-related decisions: 1. Current contractual agreements should include commercial terms … More
Implementing a multi-provider sourcing strategy across multiple countries requires tight coordination between business units, finance, legal and internal contract management. Success depends on an appropriate commercial structure, well-managed multiple-provider service delivery, smooth invoicing and allocation processes, and optimal service levels. Note these TPI Top 5 questions and their answers, which will be unique to your organization, when considering a multi-provider, multi-country sourcing strategy: 1. How do we create a suitable commercial structure? Cross-border taxes and cross-subsidization are key factors in determining … More
In July, we held our 2Q11 Global TPI Index conference call, during which we discussed noteworthy trends in the sourcing market during the second quarter and the first half of the year. Compared with the previous second quarter, the second quarter of 2011 offered some welcome lift in several metrics: Europe, the Middle East & Africa (EMEA) total contract value (TCV) was up by 13%, Asia Pacific TCV rose 55%, and Restructuring TCV grew by 30% year-over-year. However, a poor … More
A decade ago, the sourcing market share of Indian-heritage service providers was a puny 1 percent. Today, it is approaching 20 percent. Will an emerging group of Chinese service providers achieve similar growth and reshape global competition in the process? TPI has been working with the Chinese Ministry of Commerce (MOC) and the China Council on International Investment Promotion (CCIIP) since 2009 to accelerate development of the sourcing market and establish protocols designed to make the country more attractive to … More
In the late 1980s, the first wave of modern outsourcing realized the promise of specialization, labor arbitrage, risk sharing and scale efficiencies. From the late 1990s forward, the era of globalization saw the forming of the second wave of outsourcing with the rise of offshoring. Now, in the era of social networking, are we seeing the third wave of outsourcing with the emergence of crowdsourcing? Crowdsourcing is a means of tapping into the global talent pool wherein certain business requirements … More
A few weeks ago, Aon Hewitt announced that Russ Fradin, who led Hewitt since 2006 and is currently the Chairman and CEO of Aon Hewitt, will be leaving to become CEO of SunGard. Kristi Savacool, Aon Hewitt’s current chief executive officer of Benefits Administration, and Baljit Dail, Aon Hewitt’s chief executive officer of Consulting, were appointed co-CEOs of Aon Hewitt and will report to Greg Case, President and CEO of AON. Jim Konieczny, current chief executive officer of Aon Hewitt’s HR … More
