International outsourcing embraces several common factors: the creation of value, the introduction of concepts, the portability of technology. Then there are the uncommon: language and culture.
“We’ve heard it over and over again. The supplier community’s biggest concern is getting and retaining qualified people,” said Steven Leakey, EDS’ former director of marketing and business development for Asia/Pacific. “But it’s an even bigger and more complex concern for the international outsourcing marketplace. Once you cross that US border, you not only have to communicate effectively — you have to do it bilingually. And you have to be sensitive of cultural and political issues.”
One approach EDS uses is shining the spotlight on in-country nationals. “The vast majority of our people in-country are nationals who are already connected. That’s one of the things we look for in finding the chief executive of operations in a variety of different countries,” said Leakey. “Then guys like me are there to coach and counsel, to help develop in any way we can. When a transaction occurs, we step behind a curtain and make sure our in-country comrades are the ones that make it happen.”
The biggest challenge facing EDS and other companies working on globalization is how to maximize in-country resources for cultural and economic reasons and still use and leverage talent and capabilities in systems from people all over the world.
“It’s our ability to do that, I think, that has helped us in our rapid growth and expansion, particularly in Asia/Pacific,” said Leakey. “It’s the combination of the two that is so critical.”
As an example, he points to recent co-sourcing deals with the Japan-based USCO department store chain, a long-term client. “We’ve signed deals in Hong Kong and Malaysia. We’re near signature on a deal in Thailand,” he said. “We use people from the US, Japan, Malaysia, Europe, the UK…The lawyer’s based in Melbourne, Australia. It’s exciting to see all those people come together and generate good successful business.”
Although EDS has been successful in leveraging talent from around the world, the challenges are ongoing. “Everybody’s trying to figure out how to do this in the most cost-effective, win-win way,” said Leakey. “We’re all working on how to find these people. How do we get them there, given that in many of the countries, the in-country talent needs to be supplemented for a period of time. You have people traveling all over the world to participate in pieces of business.”
The good news is a pool of senior people in Asia/Pacific, according to Leakey. “These are extremely global, extremely talented people,” he said. “They’re probably multilingual and have lived in multiple countries. They probably have done business and lived and worked overseas. These tend to be very talented, very heavy-hitting, senior people.”
As multinationals deal with the ‘people’ question, they cannot allow their basic goals to become lost in the shuffle. Companies still must maintain their corporate identity and provide uniform delivery. They still need to transport concepts across borders, to take the best marketplace practices and employ them for maximum productivity. Companies that manage this balancing act are reaping the rewards.
“The creation of value and the importance of IT for value is a phenomenon we are introducing in the vast majority of these countries,” said Leakey. “But it’s understood, particularly in countries where users are going through their second or third generation of automation or have gone beyond the stage of thinking of information technology as a commodity where you buy the computer and the systems are free. In many countries, we’re doing things we’ve never done before.”
That’s good news for outsourcers doing business in Asia/Pacific, where growing economies are accompanied by trends toward deregulation and privatization.
“There’s a phenomenal creation of wealth taking place in that part of the world,” said Leakey. “Change with a capital “C” is taking place, and that creates a very exciting environment for us. The Chinese market is going to be huge. Japan is already the second largest market in the world.”
Lessons from the Outsourcing Primer:
- Staff with in-country nationals in senior roles.
- Let those nationals take the lead.
- Strive for balance between cultural considerations and your existing corporate identity.