“Is it just us, or does the outsourcing sector evolve much slower than other tech sectors?” asked a client recently.
“Yes and No” I replied.
“Many companies sign multi-year contracts, then renew with incumbents so there is a definite feel of status quo. But I have worked with several clients over the last decade and we have looked at over a hundred infrastructure, application management, IT strategy and other services vendors. And my books have plenty of ink on Accelerance, Appirio, Amazon Web Services, Baker Tilly, Best Buy’s Geek Squad, Cognizant, Epam, Foxconn, HCL’s Product Engineering Group, Rural Sourcing Inc….
“Gosh, I have never heard of most of them” said he.
“Don’t worry. Neither have the outsourcers. Foxconn has over a million employees in China and most services firms have not heard of them. Geek Squad does almost $ 2 billion a year in desktop and device support and most outosurcers don’t consider them competition. When you talk to Indian firms about rural sourcing they start talking about second-tier cities in India”
“So, what should we be doing differently?”
“ Start with three things:
- Tear up any preferred vendor list you may have for outsourcing. Ignore Magic Quadrants. Encourage your teams to include new, qualified firms for each opportunity
- Review every incumbent contract to see what the early termination clause says
- Delete any auto-renew clauses you may have in your contracts”
He responded “that’s easy for you to say :)”
But I also think I detected the look of a frog who realizes the water around him is starting to boil.
Van Halen will have some good advice for him at Sapphire
“Might as well, Jump!”
