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By Peter Bendor-Samuel, CEO, Everest Group
As both IDC's Lisa Maio Ross and EDS' Steven Leakey point out, the human resources issue weighs heavily on the minds of multinationals and their international outsourcers. The cultural and linguistic issues surrounding human resources must be addressed in every country where a company is doing business. Even when a company's IT operations are transitioned to the outsourcer, the regulations governing the transfer of employees can pose challenges to profitability. Those regulations are just a few among many that can create stumbling blocks to a successful outsourcing relationship. Richard Lister's laundry list of legal issues shows how the unprepared can be caught off guard in pursuing deals in the European market. Even the most basic of goals, standardization of information functions across a company's operations, can be difficult. IBM's Tony Macina explains that happy talk about standardization is not enough. Multinationals must enforce standardization as a priority across their operations. Then, as MCI Systemhouse's Greg Jacobson points out, comes the giant task of overcoming infrastructure inconsistencies in various world markets to achieve the benefits of standardization. As the international outsourcing market continues to grow, COMPASS' Alan Gonchar, tells us that patterns are evolving, and original contracts are coming to maturity in an environment where multinationals are more experienced. That creates a changing landscape for outsourcing relationships. At Everest, we've witnessed that evolution. From a global view, the changes are many. The growing European market has prompted large US outsourcing companies to enhance their presence there, intensifying the competition and yielding better deals for companies. In the US, there is a flow of new start-ups focusing on niche outsourcing opportunities, such as in the insurance industry. The technology applied in the US may provide a significant strategic advantage to an emerging insurance market in places such as Mexico, Australia and Switzerland. With the maturing markets have come more experienced customers who now understand that time must be reserved for managing outsourcing relationships and that the extent of an outsourcer's global reach affects uniform delivery. Companies are beginning to realize the negotiating strength of knowing the true cost of delivering information. At Everest , we stress that performance and service levels should be measured and adequate penalties and that rewards should be built into agreements. Both are important, if a company wants to maximize a relationship. The bottom line is that many companies can benefit from international outsourcing relationships. If an outsourcer can deal with the myriad issues involved in doing business on a global basis, they can enhance a company's probability of providing uniform delivery of services and significantly reduce the burden and management time of doing business in many different countries. BioPeter Bendor-Samuel is the president of Everest Group, a company specializing in outsourcing management. He has a wide spectrum of outsourcing experience from both the outsourcing and customer sides that includes outsourcing sales, sales support, account management, RFP construction, contract negotiation, ongoing outsourcing management, and contract restructuring. He has built Everest into the industry leader in providing outsourcing management services including training, consulting, and software. He has been published, profiled, and quoted in numerous industry magazines and trade publications. Publish Date: August 1997
For more information... Copyright © 1997 - Everest Partners, L.P. |
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The promise is profound. The international outsourcing market is stretching and growing, offering new choices to multinational companies around the world. The global reach provides easy access to
a greater pool of investments, ideas and technology. For some, as the articles in this issue on Grupo Nacional Provincial and the UMW group show, the promise will be attained. However, the path to success in international
outsourcing can be fraught with challenges.
