'Cost and scale still drive outsourcing globally'

DQI Bureau
New Update

In an interview with Pragati

Simlote of CyberMedia News, he spoke on the attitudes towards outsourcing.



What are the different attitudes towards outsourcing?

European customers will take a lot of time in first understanding who you

are, understanding your culture, and you as a person. It could be a 12-month

cycle before they engage with you. But once they have engaged you and assuming

you are doing a reasonable job, they will not change. In Japan, the

decision-making process is even more protracted. Multiple decision-making

processes exist, which means that the whole sales cycle tends to be fairly

large, but the size of the deals tend to be smaller. Politically, outsourcing in

US is not openly accepted. The bureaucracy out there is very positive, and the

corporations very capitalistic. They need to embrace any strategy that helps

them remain competitive. Australia is interesting, between the European and

American mindsets. Once they work with you, they stay with you for the long


Is cost still the driving factor?



Value is a prerequisite. You need to be able to demonstrate value, but cost

is the main driver. Right now, we see most customers still looking at cost and

fast time to market. Some of the companies that embraced the low-cost model are

now thinking on how to leverage additional value. Companies like GE, Intel, and

Microsoft are now looking to outsource processes that are higher on the value

chain, but that trend, to my mind, is still very minor. This trend will increase

rapidly and organizations like ours are evolving strategies to address that

demand. We are looking to find people more from a value perspective, for

example, finding a knowledge worker rather than just a programmer. But, as high

as 80% of the business is a combination of cost and scale.