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.

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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 »


Understanding Concentration Risk in Offshore Operations

February 10, 2012

Offshoring analyses routinely incorporate comprehensive risk evaluations of economic, political and other well-known risks, but often fail to consider how these intensify as offshore operations scale. This probability of magnifying other risks as operations become geographically clustered is called “Concentration Risk.”  The remainder of this post illustrates the concept of Concentration Risk by applying a simplified offshoring risk management architecture to the operations of a hypothetical U.S. company as it evolves through an offshoring lifecycle. Read the rest of this entry »


Beyond India – Optimizing the Locations of Offshore Operations

November 23, 2011

As the volume and maturity of offshore outsourcing continues to grow, companies are developing sophisticated location strategies to balance the cost and efficiency of leading offshore locations against their economic, political, and operational risks.  During a recent analysis of global delivery center locations, my firm, Red Bridge Strategy, compared locations based on economic factors (i.e., GDP, prices, wages, and growth rates) and differences in the availability of business, technology, language, and management skills.  We then evaluated each location’s strategic suitability within our client’s optimal portfolio of offshore locations. Read the rest of this entry »


Matthew Sullivan to Participate in Massachusetts Bar Association Discussion on Law Practice Marketing Using Alternative Fee Agreements

April 14, 2011

On Wednesday, May 4th, Matthew Sullivan will participate in a panel entitled, “Getting Paid: How to Effectively Market Your Practice with Conventional & Alternative Fee Agreements.”  During the midday program, to be held at the Massachusetts Bar Association’s Boston headquarters, a panel of practitioners will outline the fundamentals of fee agreements, billing and collection; the integration of alternative fee agreements into a practice, and the ethical issues in fee agreements, billing and collections. 

In addition to Matthew Sullivan from Red Bridge Strategy, the panelists will include Ronald A. Witmer of Witmer, Karp, Warner & Ryan LLP, and Jeffrey D. Woolf of the Office of the Bar Counsel (MA), and will be chaired by Stephen Seckler of Seckler Legal Coaching.  The discussion will focus on the how billing practices can serve as a marketing tool while simultaneously decreasing the chances of client fee disputes.  For more information, or to register, click here.