Immigration Bill Gives Competitive Advantage to American Firms

June 14, 2013

In a previous post, I outlined how America’s proposed new immigration regulations (Senate Immigration Reform Bill S. 744) restrict visa availability and increase costs for large employers.  In this post, I outline how “Outplacement” restrictions in the bill will strengthen U.S.-centric third party providers at the expense of India-centric third party providers, and will benefit captive providers as compared to either type of third party outsourcer. Read the rest of this entry »


Myth #2: Increased wages in India translate directly to increased costs for U.S. buyers of IT services

March 12, 2013

A common critique of offshore outsourcing is that wage inflation in India is quickly shrinking the value of labor arbitrage.   However, this analysis is based on three myths:

This post exposes the flaws in Myth #2 and explains how outsourcing professionals can leverage the truth to improve decision making and negotiations.  We explained Myth #1 here, and will explore Myth #3 in a future post.

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Myth #1: All Indian IT Wage Levels are Going Up at a Dramatic Pace

March 4, 2013

A common critique of offshore outsourcing is that wage inflation in India is quickly shrinking the value of labor arbitrage.   However, this analysis is based on three myths:

This post exposes the flaws in the first myth and explains how outsourcing professionals can leverage the truth to improve decision making and negotiations.  Future posts, will explore Myths #2 and #3.

Read the rest of this entry »


Evaluating the Maturity of a Portfolio of Offshore Services Engagements

June 13, 2012

Thousands of U.S. companies now receive services from offshore vendors.  Many companies that began global outsourcing to reduce labor costs by augmenting staff now source project-based services from multiple vendors in multiple countries.  Many also have offshore captive (subsidiary) centers that provide competitive and/or complimentary services. As companies increase their usage of outsourcing providers, it becomes increasingly important to manage these portfolios of global services relationships in a deliberate, organized way, not just the engagements. One tool to help manage the global services portfolio is a periodic evaluation using three relationship aspects: (1) global services buyer management practices, (2) the individual buyer and provider relationships, and (3) provider service capabilities.

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True Global Outsourcing: It’s about Skills, Not Visas

April 25, 2012

Writing in Forbes, veteran Forrester analyst Stephanie Moore, recently wrote that “every offshore development team requires an onsite component, [and] that [the] onsite component could be provided by American citizens — who naturally have more contextual business understanding, thus satisfying one of clients’ most pressing needs today.” (True Global Outsourcing Should End The Visa Debate). Moore is right that American employees can and should staff more of the onsite roles in global IT outsourcing projects, but the reason they don’t is driven more by the difficulty of finding American employees who have the appropriate skills and interests than it is by costs. Read the rest of this entry »


Pangea3 Using a Hub & Spoke Approach to Global Locations?

August 19, 2011

Pangea3’s recent opening of a delivery center in Carrollton, TX, near Dallas, highlights the speed with which the legal process outsourcing (LPO) industry is incorporating the general evolution of the BPO industry.  Initially, offshoring was exclusively to low cost countries to take advantage of labor arbitrage, and thereby, lower the overall costs of business processes. Since then, offshorers, both outsourcers and companies with captive centers, have begun implementing portfolios of offshoring locations using the so-called “hub and spoke” system.  “Hubs” of offshore work are generally located in scalable countries, like India and the Philippines, where there large numbers of low cost, skilled workers.  “Spokes” tend to be smaller centers that are used to meet particular skill, geographic, or regulatory needs.  Examples of spokes include the use of medium cost locations like Poland for European language skills or the location of a data center that can meet particular E.U. regulations; and Israel to get medium cost yet highly sophisticated legal skills.  (Sales offices, even when they house a few delivery people are not considered “centers,” and therefore not included in this analysis.) Read the rest of this entry »


Captive LPOs for Companies with Significant Offshore Operations

April 26, 2011

A recurrent question in the legal process outsourcing LPO industry has been whether or not corporations should build their own offshore subsidiaries (or “captives” in industry parlance) to conduct legal process work.  The captive option is particularly attractive for legal work because of the greater control and confidentiality it can afford, but for most companies, building an offshore subsidiary in India solely to conduct legal work simply isn’t feasible.  However, corporations that already have significant offshore operations providing information technology or Business Process Outsourcing (BPO) services may be in a position to benefit from captive offshore legal operations. The key factors to consider are the volume of legal process work, whether it can be organized into a consistent workflow, and instituting the appropriate management for the offshore operation and coordination across company locations. Read the rest of this entry »