In a recent authoritative award selection for the China service outsourcing industry, Sierra Atlantic was honored as the 18^th among China Top 20 Software Export Companies and the 24^th among Top 25 China Service Outsourcing Companies.

(A picture of the award winners, 4^th from the right is representative of Sierra Atlantic)

Xiaomin Zheng, Vice President of China Operations of Sierra Atlantic, received the award and shared his vision of Sierra Atlantic’s development in 2010.

The award is issued by “China Software and Service Outsourcing Network”, which is the official website of the China Software Industry Association. The evaluation committee has extremely strict requirements and examination processes on the company data provided by hundreds of participants, in order to ensure the most authoritative, authentic and fair competition. This award selection has been held for its sixth year. It’s one of the earliest and most influential recognitions of the service outsourcing industry in China. It’s highly valued by government. Also hundreds of media outlets (including TV stations, newspaper, magazines, and websites) across the nation reported the release of the award.

With this great recognition, Sierra Atlantic remains constantly committed to providing world-class IT Services, Outsourced Product Development Services, and Business Process Integration Services to our distinguished clients.

More than a decade since I have been associated with global delivery based “Application Management” (read: Application Support) outsourcing, I have seen this service mature and transform.  “Application Management” outsourcing was first among American corporation CIO’s due to relative lower risk and quicker ROI. Among the first focus were; significant cost savings, SLA based services, continuous improvement and best practices to realize efficiencies.  The advent of ERP applications (both for SAP and Oracle Applications) saw benefits beyond  such as  speeding up capital projects implementation and further cost savings with business knowledge gained. The era of “Application Outsourcing” (AO) saw application transformation, optimization and consolidation as major source of efficiencies.

Off late “Revenue Model” coupled with “Application Portfolio Management” is gaining ground in the outsourcing market. This is generally used for support and projects combined.  Let me explain, considering an enterprise IT scenario. (1) Your key applications need a dedicated support. I.e. you’re critical business applications that have highest complexities and larger user base, needs highest level of support and hence a “Dedicated Model” from your service provider is a must to meet your business needs.  (2) Your less complex applications, even if large user base might suffice a “Shared Model”. When managed well, this will provide higher level of efficiencies and greater cost savings. Both these models have been in place for a while, the scope of shared services model has been growing. (3) There is always (small) set of applications that are low in complexities and small user base in most enterprise IT.  These are effective candidate for “Pay-Per-Use” model. I.e. a ticket/transaction based model and one pays for services only when required. Much like our toll roads, you pay when you use. I must warn you though “Pay-Per-Use” term is used in many contexts and generally for projects.

Applications management services are like buying insurance, as contingency. CIOs can now view the entire IT applications as portfolio and divide them to be serviced in “Dedicated, Shared and Pay-Per-Use” model for best efficiencies. The industry should see growing maturity with these offerings in next few years, but this is right time to ask your outsourcer(s). The availability of APM (Application Portfolio Management) tool should further help this cause.

I would love to hear your views or any experience.

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”.