Just read Offshore Outsourcing

Just read Offshore Outsourcing, written by Marcia Robinson and Ravi Kalakota (Mivar Press, 2004), who run E-Business Strategies, a management consulting firm in Atlanta. Behind with your trade journal reading? This book will give you briefings on some of the most publicized offshore IT and BPO initiatives of the last five years — the same stories catching the eyes of our CEOs as they peruse the pages of the Wall Street Journal. You’ll learn some of the reasoning behind offshoring efforts by Amazon.com, GM, American Express, Target and plenty of other companies you and I have heard about or work for.

Once you learn the business models (first generation: internal delivery, offsite onshore shared services, captive shared services et al; second generation: hybrid delivery, global shared services, etc.), you’ll get a quick immersion in the types of functions to consider taking out of house. The authors devote whole chapters to IT, customer care, finance and accounting, HR and transaction processing.

After a quick history of IT outsourcing, that specific chapter delivers two case studies (Bell South and Guardian Life Insurance) with an emphasis on business needs, project descriptions and expected results.

Then comes the closest thing to practical advice. The authors walk readers through the steps of creating a business case specifically for offshoring IT: how to evaluate whether an offshore strategy is right; identifying core and noncore IT processes; justifying the decision to offshore by estimating ROI; designing an engagement model; selecting vendors and negotiating the contracts; and developing an implementation plan. These discussions are broad-stroke. If you’re capable of following the general directions, you could probably develop enough of a business case to take corporate discussions — pro or con — to the next level.

The last third of the book provides a general explanation for creating your offshore strategy across the organization, including pithy coverage of service level agreement design, contract negotiation, transition management, performance measurement, evaluating vendors and selecting locations (as in what country to take your work to).

Throughout, you’ll find lists, diagrams, numbers and other details that may prove helpful as you’re developing plans. (For instance, “The Vendor Decision” provides the top five service providers by revenue for each offshoring category covered elsewhere in the book; that beats doing a Google search.) You won’t find enough detail here to make this book the final word, but it’ll give you a quick education on the complex issues you’ll grapple with should you go offshore.

For the final final word, you’ll probably want to call E-Business Strategies and find out what they charge for a consulting engagement.