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By Peter Bendor-Samuel, CEO, Everest Group
English-speaking Europe long ago adopted outsourcing as a strategic tool, and that fact continues today. Now we see Germany, France and Central Europe starting to look at outsourcing as a meaningful way to provide competitive advantage. Markets in places such as South Africa and Australia also are turning increasingly toward the outsourcing model. On the Asian front, the first steps are being taken in Japan and Korea. As those countries address their economic issues, they are beginning to look at outsourcing as a potential vehicle to assist with the restructuring and provide more connective arrangements. Real movement is taking place in the intellectual arena of the universities and Ministry of Trade in Japan. Although the movement in Korea cannot yet be called a trend, it is an early indication that bears watching. What is driving this action in the global marketplace? At Everest, we see two phenomena. First is this increased awareness of the value of outsourcing as a strategic tool. Companies around the world are beginning to understand the value in leveraging an outsourcer's expertise, rather than building everything themselves. The second phenomenon is driven by need. Multinational companies are seeking to provide even implementation of their technology across the world. As they struggle to accomplish that goal, they are turning to outsourcers for help. These situations are occurring in the telecom arena, as well as desktop and mainframe -- essentially across the board on the infrastructure issues. Even implementation of applications programming appears to be less troublesome. Having worked with numerous companies that are dealing with these issues, we believe that reliance on outsourcers to effect even delivery of technology and services across the globe is an emerging trend. An overview of changes in the marketplace supports that contention. In IT, for example, as technology becomes more important in terms of how multinationals do business, providing quality data processing becomes paramount. More and more companies are turning to outsourcers to meet that need. Much has been written about the emergence of business processes outsourcing. That segment of the outsourcing industry also is bolstered by special challenges in the global marketplace. When a company moves into a new country or new region of the world, human resources, compensation and other such areas take on new dimensions. Special international expertise frequently is needed to provide a smoothly functioning operation. Many companies are finding it more effective and cost efficient to turn to outsourcers for that expertise. As the international outsourcing marketplace shifts and rolls, another interesting possibility comes tumbling out of the mix. Countries that are just beginning to enter the world of outsourcing may go beyond adopting the practice from western countries; they may give birth to new outsourcing companies. Those new players could well be the next round of competitors for the large American outsourcers -- and that would add yet another footnote to the international outsourcing story. Publish Date: August 1998
For more information... Copyright © 1998 - Everest Partners, L.P. |
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From the U.S. to Asia and points in between, outsourcing is continuing to penetrate the world. As companies in the community of nations begin to understand the benefits of outsourcing as a strategic tool, the practice is gaining widespread use in countries other than the U.S.
