Business Book Review
According to Robinson and Kalakota, most large corporations have cut costs as
much as possible, using traditional methods. Understanding the "more for less"
battle in which they are engaged, these firms realize that driving more costs
out of operations means going offshore (i.e., migrating part or all of their
value chains to low-cost locations). Drawing on the experiences of GE, American
Express, Dell, BellSouth, Delta Airlines, British Airways, and others, Offshore
Outsourcing introduces CEOs and senior managers to the creation and
implementation of offshore strategies that can be used effectively to create
more focused, streamline, and competitive organizations.
As the authors note, offshore outsourcing is "... an unstoppable mega-trend.
... profoundly affecting the competitive capabilities and hence the labor
structures of all multinational corporations." Thus, they offer Offshore
Outsourcing as a comprehensive guide to the practical application of this trend
across all industries. Their premise is that offshoring is is a long-term
development that has emerged as both a strategic and a tactical tool for meeting
new business realities. And, though this tool is hardly new (companies have been
offshoring manufacturing for many years and reaping significant cost and
productivity improvements), the offshoring of business processes is still in its
infancy. Thus, there is still much uncharted territory, and this territory is
full of new rules, tools, and business models.
Robinson and Kalakota present a clear and detailed schematic that delineates
these rules, tools, and models, superbly filling in the blanks left by the many
general and oversimplified discussions currently available. Their approach,
based on extensive research, focuses on helping CEOs and senior management
understand the specific skills and management practices required to integrate
individual projects, as well as large-scale offshoring activities into a
company�s overall strategy. Thus, customizable guidelines take into account
unique business needs and different levels of readiness for change. Moreover,
these guidelines are organized to emphasize and explore three critical points
for companies that may still view outsourcing as "a short-term fix for saving
money and �getting rid� of some noncore functions": (1) Offshoring is becoming a
"need-to-have" competency. (2) It is a tactical business decision with long-term
implications. (3) It is no longer an unproven model.
Read an Excerpt
Why are corporations such as General Electric, HSBC, IBM, Oracle, and
Deutsche Bank transforming their internal services and administrative operations
using offshore outsourcing? Can companies that have focused on outsourcing
manufacturing for so many years replicate similar cost and productivity
improvements by offshoring business processes such as IT, finance and
accounting, human resources, customer care, and transaction processing? What can
others learn from the market leaders? Is outsourcing offshore a temporary
management fad or a long-term business trend?
These are some of the questions that led us to write this book. In Offshore
Outsourcing, we introduce readers to offshore strategy creation and
implementation. We hope to help managers of all levels tap into the power of the
offshore outsourcing trend that is transforming the cost structures and
competitive dynamics of several industries.
Slowly but surely, offshore initiatives are resulting in millions of dollars
in operational cost savings for corporations like Citigroup, Ford, and American
Express. Can your business achieve the same results? The answer is yes. Contrary
to many people's fear, you do not have to be a multinational company to reap the
benefits of offshore outsourcing. If done well, offshore outsourcing can improve
your bottom line and streamline the structure of your organization.
Offshore Outsourcing - Where Do You Start?
When building something new or
innovative, you need a clear blueprint. Unfortunately, while there is a lot of
general discussion about offshore outsourcing, almost all of it is either
anecdotal or simplistic. In order to help you unlock the value of offshore
outsourcing, we decode some of the core concepts behind this trend in Offshore
Outsourcing. In particular, we illustrate five areas.
1. Best Practices. Offshore outsourcing encompasses a broad array of business
best practices and skills that are essential ingredients for success. Throughout
this book, we use best-practice case studies to show you how to apply offshore
outsourcing to many different processes and tasks and maximize the impact of
2. Business Models. There are many business models for offshore outsourcing.
Offshore Outsourcing gives you customizable guidelines that take into account
your business needs and readiness for change.
3. Process Focus. Whether you decide on information technology outsourcing or
business process outsourcing, the potential gains from each are equally
impressive. Our priority is to explain how to make offshore outsourcing work in
administrative, customer-facing, and transactional areas that are relatively
untapped in the quest for cost reduction.
4. Creating Your Roadmap. Offshore outsourcing is as much about people,
vendor selection, country selection, and project management as it is about cost
reduction. Our goal is to show you how to achieve a balance between managing
people and improving performance.
5. Assessing ROI and Business Risks. Done right, offshore outsourcing can
deliver sizable bottom-line impact, but it's a lot of work, and it's not without
risks. Offshore Outsourcing sheds light on the dangers and mistakes that can
derail an offshore initiative.
It doesn't take a genius to realize that the companies that successfully
implement offshore outsourcing are going to put a lot of pressure on their
competitors to follow suit. Obtaining even a small cost advantage in today's
brutally competitive market place can mean the difference between market
leadership and failure.
The Organization of This Book
When we wrote this book we tried to
structure it so that a variety of readers, from offshore outsourcing novices to
managers in the midst of offshore projects, would find it easy to navigate.
While you may prefer to read it cover to cover, the content is organized in
three parts to help you learn about offshore outsourcing at the level of depth
you choose. Following is a quick guide to the content.
- Part One of the book provides a thorough overview of the offshore
outsourcing landscape. We begin by defining key concepts and trends (Chapter 1),
business models (Chapter 2), and the process landscape (Chapter 3). We also
explain how three best-practice firms - General Electric, Dell, and American
Express - are capitalizing on the offshore outsourcing trend.
- Part Two of the book provides a detailed overview of the different business
processes - information technology (Chapter 4), customer care (Chapter 5),
finance and accounting (Chapter 6), human resources (Chapter 7), and transaction
processing (Chapter 8) - that companies are sending offshore. Throughout these
chapters, we have included many case studies because they allow you to see the
key business processes being transformed, the implementation challenges that
companies and third-party providers struggle with, and the ROI that results from
- Part Three of the book focuses on the "how-to." We discuss how you can
create, implement, and benefit from an offshore outsourcing strategy. We present
the steps that are normally included when companies create clear, focused
offshore strategies (Chapter 9), decide on vendors (Chapter 10), and select
countries (Chapter 11).
At the end of this book, we hope that readers will return to their
organizations with new ideas and an understanding that offshore outsourcing is a
journey, not a one-time event with a quick payoff. Agree or disagree - offshore
outsourcing is changing the business landscape.