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Tools: Multishoring & Valuesourcing

As the world is slowly emerging out of economic downturn, the question lingers on everyone’s mind is “What is next”?. While a set of people are busy validating the ‘revival reality’, I thought it is time to look at some trends that could potentially change the landscape of business models. The large volume outsourcings that have triggered a major outsourcing wave during Y2K and .com wave have not only disappeared but the value gaps are widening with no proper model to support. Developed economies such as US & Europe are not only focused on commodity and low cost alternatives to sustain growth and also starving to create bandwidth for innovation. The large scale outsourcing of IT services and BPOs have virtually created new industries in India, China and other destinations in Eastern Europe and also in Latin America. The GDP growth and stronger economies in Emerging markets have created new markets for corporations in North America. It is hard to ignore these trends for a economy which needs to recover to year 2000 level and then progress from there.

I believe companies will look at ‘multishoring’ in a value and growth expansion context as opposed to volume and cost basis. Service providers need to focus on vertical solutions that could potentially solve ‘global expansion’ problems to sustain growth. The traditional offshore players with large number of people presence in emerging markets, interestingly needs to invest in “building value drivers” (both people & solutions) in developed economies such as Europe & US. In the coming years corporations will have to focus on more ‘Internet & mobile retailing’ as well as ‘vertical solutions’ that can help them to grow globally. If this trend is adopted by both SMB and Fortune 1000 companies as a sustenance strategy, it will trigger next wave of outsourcing which I would like to call its as “valuesourcing”. Service providers irrespective of their size needs to build on

(a) Global delivery capabilities
(b) Vertical Solutions that can help companies to grow rapidly & globally
(c) “Valuesourcing” with right blend of people & solutions.

I am sure every corporation in North America and Europe will ask themselves this question at some point of time in the next 10 years (2010 – 2020). “How can we sell our products and services through internet and also serve & expand into global markets”. US & Europe markets will re-tool its people and systems to ride on this wave. If M&A strategies focus on ‘valuesourcing’ and they will trigger job creation to support global expansion as opposed to downsizing. Well managed and result oriented companies will pursue more acquisitions to reach this trend.

“In my opinion, it is the brand that makes more business sense as opposed to shifting too much toward one particular shore”.