Indian Outsourcing Company Recruits with a Bus

Has the tech services industry become overcompetitive?

?? Morton Meyerson has been in and around the tech outsourcing industry every since it emerged on the scene in the 1970s. He was an early employee at Ross Perot?s EDS. (In fact, he takes credit for structuring the first outsourcing contract, in 1969, for Pennsylvania Blue Shield.) And later he ran Perot Systems. Now he?s a grandfather, runs a family foundation, and he?s an investor in tech startups and real estate. I got a chance to talk to him recently because he?s backing a two-year-old outsourcing advisory firm called Alsbridge. He has watched this industry through all of the stages of its life cycle, and he thinks its on the wrong track now.

Meyerson thinks things were pretty good for tech service providers and their clients in the early days. "In the days of the 60s, 70s, and early 1980s, the companies in this business could make a healthy profit and deliver outstanding results for the client. We were making 30% after tax margins, yet we were able to cut the clients' costs by one-third to one-half and give them better quality and more information," he says.

Things changed in the 1980s when distributed computing came in and brought with it tremendous complexity. Then came the Internet, and more complexity. Industry growth rates went down. And a bunch of former EDS-ers formed the outsourcing advisory firm TPI and got really good at helping clients negotiate tough terms in their contracts. There went the margins. "In my judgment it went too low. If there was a problem, the service company couldn't fix it without losing all of their margin. So that led to arguments and litigation. What we have is an over-competitive market," says Meyerson.

The reason Meyerson got interested in Alsbridge was it offers a way out of this dead end. The Alsbridge philosophy is to get clients and service providers to see themselves not as adversaries but at collaborators. "You go from a win-lose negotiation to a win-win," he says.

This is more easily said than done, I'll bet. But I agree with the principle. Unless this industry becomes more collaborative, it's not going to work for either side.

Role of VOIP in Outsourcing

Outsourcing is growing and one thing that could contribute to its growth is VoIP (Voice over internet protocol).

The emergence of such technology is considered as a factor because of the convenience that such technology brings especially when it comes to call centers. Here is a brief explanation about this conclusion:

Innovations in broadband and communication technologies have meant that firms looking to save on space and costs can outsource their secretarial services with much greater ease than before.

Do you think that VoIP do contribute in outsourcing?

Outsourcing in its new trend...

First there were virtual assistants and now there are butlers which are being outsourced.

As you would notice in outsourcing, first there were only non-core business tasks which are outsourced like call centers and now, tasks that are outsourced are becoming more and more intricate because of the demands of customer and the knowledge that someone is wiling to that job.

Steve Lohr also mentioned this development in outsourcing, calling it the "second wave". Here is what they have to say in the butler-type outsourcing:

"The second wave, according to some entrepreneurs, venture capitalists and offshoring veterans, will be the globalization of consumer services. People like Yamaki and Tham, they predict, are the early customers in a market that will one day include millions of households in the United States and other nations. They foresee a host of potential services beyond tutoring and personal assistance: like health and nutrition coaching; personal tax and legal advice; help with hobbies and cooking; learning new languages and skills; and more. Such services, they say, will be offered for affordable monthly fees or piecework rates."

Are you ready for that kind of outsourcing?

A little less accent, a little more customer service

Offshoring, it can be great but it can also be not so when the customer service people cannot speak proper English.

"IBM is looking to change that. Researchers at Big Blue?s India Research Laboratory recently announced that they have developed a Web-based, interactive language technology to help people who speak English as a second language improve their speaking skills.

The technology evaluates grammar, pronunciation, comprehension and other spoken-language skills, and provides detailed scores for each category.

The program uses specially-adapted speech recognition software to score the pronunciation of passages and the stressing of syllables for individual words."

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