In order to meet these needs, Allegis Group Services provides three distinct service offerings that can be delivered individually or in combination to meet every human capital or workforce management need that your company may have. Each service is comprehensive and fully customizable to align with your goals for a world-class workforce that is built to lead your company into a successful future.

Allegis Group Services’ Workforce Management Solutions help companies manage the entire spectrum of processes and systems that requisition, procure, manage and pay a contingent workforce and staffing supplier community. Our solutions encompass more than just the automation of these processes through a technology system. They include the entire solution design, process optimization, active cost management, reporting analytics, performance management, overall program oversight and sharing of best practices from the other highly successful programs we design and manage.

Service Lines

RPO – Recruitment Solutions from Allegis Group Services. Allegis Group Services has succeeded with world-class organizations by providing flexible solutions that significantly impact their recruitment function with results. Our recruiting culture and passion to succeed on every assignment is unparalleled in the industry and always assures that our client’s goals are achieved.

Executive Search and Management Recruiting from InSearch Worldwide. InSearch Worldwide has built a Management Recruiting solution on 20+ years in the executive search industry. Our solution is designed to meet each customer’s need for either senior-level professionals or individuals with qualifications that are difficult to identify in the marketplace. When you choose InSearch Worldwide for your executive search needs, you’re working with a team with specialized expertise in the following:

• Attracting pivotal talent on a global basis
• Actively sourcing passive job seekers
• Providing a positive candidate experience
• Recruiting across major functions (HR, Technology, Marketing, Operations, Legal, Finance, etc.)

Distinctive Capabilities

Allegis Group Services^® Inc., an operating company of Allegis Group^® Inc., provides human capital and workforce management solutions to customers in a wide range of industries across the globe. Our offerings include Managed Services (MSP), Recruitment Process Outsourcing (RPO), Executive Search and Consulting Services.

Whether you’re looking to optimize the use of your contingent workforce program, outsource your organization’s recruitment needs or want to analyze key market trends to better serve your business needs, Allegis Group Services can help. Through distinct service offerings, we employ industry best practices and our experience to assist our customers in maximizing the efficiency and effectiveness of their workforce programs.

Allegis Group Services at a Glance

• Year founded: 2001
• Revenues: AG 2010 revenue- $6.4B
• Employees: 524
• Service lines: RPO, MSP, Executive Search, Consulting Services
• Headquarters location: Hanover, Maryland
• Locations of global delivery centers (active on six continents): London, Toronto, Frankfurt, Bangalore, Beijing

For More Information

Telephone: 877-247-4426
www.allegisgroupservices.com

Awards and Recognitions

• GM Supplier of the Year ‐ 2011 (GM Award Video)
• Microsoft Premier Vendor Status ‐ 2010
• Rockwell Collins Presidents Award ‐ 2009

Nearshore, offshore, onshore, best shore

Although “nearshore” is a favorite model and buzz term bandied about in outsourcing news and advisories today, it will soon fall by the wayside. First of all, it’s a misnomer. “Nearshore” to Japan, for example, is China or Vietnam; but those two service delivery locations to U.S. and European businesses are “offshore.” Brazil is a nearshore provider but also a large onshore provider.

Genpact predicts nearshore service delivery centers will likely continue to grow, but not as significantly in dollars or percentages as the offshore centers. According to Robert Pryor, Executive Vice President of Sales, Business Development and Marketing, we’ll likely see an increase in the use of onshore centers. “Federal, state, and local governments will drive this growth in terms of the attractiveness of incentives they create to stimulate domestic job growth.”

Deepak Patel, CEO, Aditya Birla Minacs, says the decision between nearshore, onshore, or offshore is “not so much about achieving scale but, rather, is about delivering the right value to companies by providing the ideal mix of the right delivery destination and the right knowledge set available. In the coming years, newer geographies will emerge, but smart outsourcers will choose the destination that brings the most value.”

John A. Haslinger, Vice President, Product Marketing at ADP, says, over time, he expects labor arbitrage advantages will remain but increasingly companies will balance them against the need for particular skill sets. In HR, for instance, “companies will balance labor arbitrage with the service provider’s ability to foster long-term relationships.”

Allied Digital Services’ President, Kevin Schatzle, believes nearshoring will increase over the next two years because outsourcing in general will increase. He predicts that in five years, as the industry matures, Canadian pricing will start to approach U.S. costs.

Gordon Coburn, Chief Financial & Operating Officer at Cognizant says globalization initiatives are evolving “from a point-to-point delivery model to a many-to-many model where the provider delivers from many locations in the world to a client’s locations in many other parts of the world.”

Rajan Kohli, CMO, Wipro Technologies, adds that “best shore is the way to go. That may mean a combination of nearshore and offshore, or it may mean just offshore. Buyers will need to make decisions based on cost, business value, and business availability.”

Ritesh Idnani, COO, Infosys BPO, says “the trend of nearshoring will continue to gather steam. But the global economic landscape has definitely mooted the call to a more protectionist outlook by countries, and that trend will continue in the short term. They will, however, have to bear the brunt of continuous monitoring to ensure they continue to be cost effective and build in efficiencies. The ‘offshore train’ left the station several years back; hence, offshore will continue to grow in volume and market share.”

Dina Kholkar, Head, BFSI, TCS BPO Services, predicts that the definitions of onshore, nearshore, and offshore will blur over the next couple of years because providers “will increasingly expand their base to build a global network delivery model to address the diverse demands. There will also be an increasing creation of Centers of Excellence by function,” she states.

The future shift from focusing on nearshore / offshore / onshore debates is nowhere more evident than at HP where there is now a “Best Shore Services” division. Even so, Jeff Womack, Vice President Global Enablement, HP Best Shore Services, says HP believes that nearshoring will “continue to have a seat at the global delivery table because companies – especially in the European Union region – will want the cultural affinities and languages as well as aspects of data privacy.”

Womack also points out that some nearshore locations are already maturing to the point that they no longer meet the requirements to qualify as a true nearshore location because costs begin to reach parity with major markets such as the United States, Western Europe, and Japan.

Yugal Joshi, Senior Analyst, Everest Group, says that, “with offshore suppliers seeing their tax exemptions going away, the cost-effectiveness of their large offshore centers will reduce significantly, which will prompt them to go nearshore.”

Don Schulman, General Manager, Global F&A and SCM, IBM, predicts nearshoring will grow in the short term because organizations will continue to perform high-level activities (such as budgeting and corporate tax) discretely and locally – regardless of whether shared services or outsourcers are doing the work.

“This is less about nearshoring and more about growth due to more complex work moving into a shared-services environment,” Schulman explains. “Success in outsourcing has led to this kind of work moving to a centralized environment. Organizations are beginning to look at their shared-services strategy as a hybrid model. It is not an either/or decision but, instead, a multi-dimensional approach that leverages both internal shared services and outsourcing.”

Industries increasing adoption of outsourcing

Nearly all of the service providers whom we tapped for insights anticipate that the U.S. healthcare industry will experience a dramatic increase in outsourcing over the next two to five years.

Pryor at Genpact says the significant cost pressure and large number of additional people that will need coverage will require that the industry adapt rapidly in leveraging technology, outsourcing, and reengineering to change business models and cost structures.

Most of the executives we interviewed also predict a large uptick in government outsourcing in the next few years. Schatzle at Allied Digital Services says government and education will migrate to outsourcing for IT support and “will receive great benefits of modern approaches.” He advises that buyers in these segments especially need to evaluate IT services from security and redundancy perspectives.

Kohli at Wipro predicts the next few years will see “BPO opportunities arising in retail, manufacturing and media, but in forms as not serviced before.” He says the driver for this growth is the convergence of the Software-as-a-Service (Saas), cloud, and ITO/BPO models “plus the ability of Tier-1 providers to do business function outsourcing.”.

Gopal Devanahalli, Vice President, Infosys BPO, believes the banking industry “will undergo big changes post the financial meltdown.” Increased regulation will lead to a focus on more outsourcing of such processes as treasury, cash management, and custody. He also predicts the intersection of mobile and social technologies will disrupt traditional branch banking, which will lead to more outsourcing.

Patel at Aditya Birla Minacs points out there is a huge pent-up demand in the midmarket, and these companies will turn to outsourcing as a strategy for becoming more competitive in the marketplace. (Also see Risks and Complexities in Outsourcing Decisions in the Midmarket.)

“Practically every industry today is grappling with challenges associated with the global financial crisis, increased regulatory compliance requirements, and content digitization / Web 2.0 environment leading to newer paradigms. There is a need to be able to respond agilely to the market through leaner, meaner organizations,” says V. K. Raman, Head, Domain Services, TCS BPO Services. This is especially true in the Banking, Financial Institutions and Insurance (BFSI), life sciences and healthcare, retail, and government sectors. Raman says these industries will drive outsourcing in the next few years.

Miles Lafferty, Vice President, Hinduja Global Solutions, believes currency fluctuation, particularly the U.S. Dollar and the Euro, and related cross-regional economic policy and ideology will create uncertainty in global sourcing decisions. “That said, this uncertainty will reduce the appetite of many organizations to build captive centers, thereby creating opportunity for outsourcing service providers.”

Regional hot spots

There was a definite consensus among the experts we interviewed regarding opinions on which regions will have more companies turning to outsourcing in the next two years to address their business needs (other than the United States or Europe). The top regions they cited are:

1. Asia Pacific
2. Middle East
3. Latin America
4. Japan
5. Australia
6. India

Most believe that the BFSI industry will lead the way in these countries, just as it did in the U.S. and European early adoption of outsourcing.

Japan is at the forefront because it continues to struggle with a difficult economic climate, says Schulman at IBM. He says that the driver for growth in Latin America and parts of Asia is the large numbers of organizations with a disparate spread of employees and business units across multiple locations and borders

Infosys BPO says the drivers in these regions are cost and process efficiencies at the lower end. But there is also some outsourcing of analytics related to understanding market customer behavior, as well as some outsourcing of vertical-specific functions.

Deepak Rastogi, Senior Vice President, Global Strategy at Hinduja Global Solutions, says ultimately much of the growth in these regions will be consumer driven in the telecom, financial services, and healthcare industries.

Business processes

Which business processes/functions will move to the outsourcing model in the next two to five years? Our experts listed the top three:

1. Analytics – The driver is the need to leverage fact-based insights to improve reporting results, recognize and understand potential opportunities, and deliver better business outcomes.
2. Manufacturing supply chain – Factors driving growth in this area are purchasing cost reductions, cash flow advantages, operations cost savings; and increased business effectiveness (such as shortage management and the capacity to implement advanced logistics models).
3. Work that today appears extraordinarily complex (such as industry accounting, external reporting, planning, budgeting, forecasting) will move to outsourcing as these processes become standardized.

Selecting a service provider

Charlie Bess, HP Fellow, HP Enterprise Services, advises that buyers in these hot spots should look at how service providers invest in making their processes more standardized and their capabilities more flexible, as well as what they are doing to prevent unnecessary business interruptions.

“Investing in automation, for example, is important,” says Bess, “but you need to look under the covers and see what the provider’s approach is when the automation doesn’t work. Rowing harder with new tools may not always be the right answer; you might have struck something unexpected and need to change course.” He advises buyers to ask: “What is the escalation process when the unexpected occurs?”

Abid Ali Neemuchwala, Global Head, TCS BPO Services, warns buyers to seek providers that have the ability to scale and grow across new geographies to support green field ventures.

According to Kohli at Wipro, the most important criteria should be whether the provider can show significant value beyond labor arbitrage and can deliver on the commitment. “All other criteria such as a combination of BPO and IT, cultural fit, quality, and scalability are reflected in the above two major criteria.”

Selecting healthcare service providers will be a big risk, according to Kohli at Wipro. “The key selection criterion should be the provider’s commitment towards timely and quality deliverables, as there is no scope for errors in this zero-error industry.”

Kholkar at TCS advises buyers’ provider-selection criteria should include cultural fit, relationship management ability, and certification from compliance authorities.

IBM’s Schulman says buyers should ensure that their service providers are able to view their processes at a granular level on an end-to-end basis including any portion that the buyer retains. “This is critical to truly understanding a client’s business and being able to effectively collaborate with them to optimize business outcomes.”

Minacs was founded in 1981 as a temporary staffing business. In 1985, the company shifted its focus to providing customer relationship management (CRM) services and the outsourcing of customer contact center solutions. Since then, Minacs has rapidly grown into a recognized global organization providing high-value business process outsourcing (BPO) solutions centered on Customer Life cycle, Marketing, Finance and Accounting, Receivables Management, Procurement, and IT solutions and services.

Today, over 16,000 Minacs experts across three continents and 32 centers spanning Canada, Germany, Hungary, India, Jamaica, Philippines, the UK, and USA power our solutions through a global delivery model that helps our clients enhance revenues, profitability, and customer service.

As an industry-leading business process outsourcing provider, Minacs believes in proactively evaluating the efficiency and effectiveness of our contact center processes, policies, technology, and employees. Regular evaluation leads to streamlined operations, greater value for our clients, appropriate customer satisfaction levels, and win-win scenarios for our clients and for Minacs. We pride ourselves on our ability to innovate and our customized, boutique approach to customer service delivery. Minacs has designed and delivered flexible, innovative solutions for our clients that have improved customer satisfaction, service, and quality while reducing total cost of operations.

While some clients view us as experts in a single part of their business, others have engaged Minacs as a partner that supports multiple areas of their business. This breadth and depth of experience provides us with a unique perspective and a singular objective: to add value and deliver results at virtually every stage of our client’s customer relationship lifecycle.

Key Differentiators

Company Viability and Future: Minacs, and its parent company, are financially strong at approximately $350 million and $30 billion annual revenue, respectively.

Client Satisfaction and Longevity: Our top 10 clients have been with Minacs more than seven years, and we have positive, growing relationships with many Fortune 1000 company clients in such vertical markets as healthcare, technology, manufacturing, telecommunications, and online services.

People Make the Difference: Minacs is an industry leader that understands that the long-term engagement of employees is vital to the success of understanding the unique needs of a client’s customers.

Local Presence / Global Reach: Minacs has delivery locations across the globe with over 30 locations in North America, Canada, Europe, and APAC including India and Philippines.

Technology-Driven Innovation to Improve Performance: Ability to leverage technology to improve performance, utilize customer data, and provide reporting capabilities to enhance customer and market-related decisions and targeting.

Robust Infrastructure: Each day Minacs meets or exceeds the demanding infrastructure, security, and regulatory requirements of its clients.

Flexibility: Minacs’ breadth of capabilities and proven track record as a true business partner enable us to track and quickly act on clients’ growth trends.

Quality: Quality is a way of life at Minacs with certifications in ISO (ISO 9001:2008, ISO 27001), COPC, and Six Sigma methodologies.

Aditya Birla Minacs at a Glance

Founded in 1981
Revenues: $350 million
Employees: 16,000+
Service lines: Business processes, IT infrastructure, IT applications

US Headquarters
34115 Twelve Mile Road
Farmington Hills, Michigan 48331
T 248 553 8355
TF 800 832 1935
F 248 488 3691

Canadian Headquarters
180 Duncan Mills Road
Toronto, Ontario M3B 1Z6
T 416 380 3800
TF 888 646 2271
F 416 380 3830

India Headquarters
Millennium Towers,
ITPL Road, Brookefields,
Bangalore, India 560 037
T 80 4109 6000
F 80 4117 9888

For more information

Telephone: +91 80 4144 6000
Fax: +91 80 4095 2514
E-mail: minacsinfo@minacs.adityabirla.com
Web site: www.minacs.adityabirla.com

Service Lines

Manufacturing and Retail – The range of services includes:

• Marketing Solutions: Service and parts marketing, service and lease renewal appointment scheduling, certified pre-owned marketing and administration, customer data management, dealer portals, e-mail marketing, event marketing, incentive management, invoice messaging, lead management, loyalty cards and programs, on-demand marketing, point-of-purchase marketing, wholesale parts programs
• Retail & Channel Support: Web-based process automation and administration, marketing and sales, warranty and service contract administration, finance and insurance sales and administration, wholesale and fleet sales, service and administration, retail inventory management, retailer/franchise and employee incentive and recognition, program and process marketing, launch and operation
• Lifecycle Communications: Comprehensive communication plans, integration across all online and offline channels (voice, print, web, email, text, mobile etc) and touch points, communication design, development, production and delivery, prospecting and sales, welcome, up sell and cross sell, sales-to-service conversion, product service and maintenance, account activation, maintenance and service, customer care, technical support, loyalty, product and subscription renewal and repurchase, systems customization or development, data integration, enhancing, cleansing and management, intelligent analytics
• Technical Assistance Center: Consumer education and product support, technician assistance, parts restriction programs: reducing costly unnecessary replacement, corporate, field and channel helpdesks; repair center / dealer assistance: parts identification, ETA inquiries, ordering and shipping; dealer breakdown assistance: walkthroughs, diagnostics and escalations, field support
• Customer Care and Assistance: Customer relations, customer service driven up-/cross-sell, consumer affairs, service renewals, product recall notification, buyback prevention and administration, subscriber services, telematics customer and emergency assistance, Industry segment / domain specific solutions
• Manufacturing Industry Solutions: Warranty administration and auditing, closed loop service marketing, parts marketing, retail inventory management, product buyback prevention/administration, product lease and subscription renewal, field and on-site staffing and analysts, dealer assistance

High Tech - The range of services includes:

• Marketing Solutions: Product/subscription marketing, customer retention and loyalty prospecting and sales: outbound sales, up-sell, cross-sell, win back
• Channel support: Distributor, service provider and partner support
• Order management: Processing, fulfilment and inventory management
• Technical support: Integrated multi-channel tier 1-3 support
• Customer service: General inquiries, billing, inbound sales
• Product testing
• IT services including wireless asset management, using GPS/ RFID technologies
• Outsourced software product development
• IT infrastructure management
• Finance and accounting
• Strategic sourcing and procurement

Teleom, Media and Entertainment― The range of services includes:

• Customer Acquisition and Retention: Lead management, welcome calls and service activation, cross-sells and up-sells, application renewal and upgrade processing, account reconciliation, service bundling and fitting, equipment/device provision and activation, loyalty campaigns, promotion management, revenue assurance
• Customer Services: General billing and service, consumer education, activations, escalations, order payment processing and plan care; automated contract renewal campaigns for revenue assurance and an optimum customer experience; documentation, correspondence and contract management back office; Integrated real-time performance reporting; speech analytics and data mining; enhanced eCare solutions: including managed SMS, chat, e-mail management, and co-browsing; voice self-service, virtual hold and interactive voice response (IVR) management that provide 12 times the cost savings of standard voice support; fully managed support: for your consumer, small and medium, and corporate businesses with customized SLAs based on the unique needs of each customer segment; automated high-speed multi-channel communication delivery; associates’ training curriculum: design and delivery
• Technical Support: Tier 1-3 technical support including complex fix scenarios from smartphones to advanced PC troubleshooting; network, field and event management for extended benefits in all aspects of the customer life cycle, reducing costs within your operating models while enhancing customer experience; fully integrated charge care models that transform a revenue-enhancing opportunity into a one-stop shop for an entire realm of customers, whether subscribers or not; innovative diagnostic and triage automation solutions bring advanced cost reduction and customer satisfaction strategies into complex technical support; remote computing and peripheral support with white-labeling options
• Receivables Management: Customer retention solutions: welcome/reminder calls, customer care, pre-collect; early-stage collections: pre-charge-off, letter service; late-stage collections: contingency collections, legal network; secialty programs: primary, secondary, tertiary, quad, quint placements; skip and cure programs; skip trace services: state-of-the-art technology-driven ability to locate new contact information in quick time on very large numbers of accounts; highly trained skip tracers at your site for additional research and support; early out and primes: core capabilities on these types of account profiles; specifically trained collectors; experience with designing the most appropriate dialer strategy to produce effective outcomes on these profile types; letter services: all aspects of letter delivery to the consumer from initial placement of accounts to collector driven, conversation-specific letters with proven aggressive and effective results; charge-offs: charge-off account profile experts and specific approach understanding of what it takes to be effective and profitable for our telecom clients
• Telecom Business Services: Telecom operator services, telecom equipment manufacturer services, telecom tower and infrastructure management services, telecom handset manufacturer services, technician and field provisioning management, distribution support management, network and event tracking and support, 24×7 partnership with client field and network management teams, technician/field provisioning, back-office processing: research, analysis, and back-check service mitigation, finance and accounting, strategic sourcing and procurement, internal IT systems, IT infrastructure management

Banking and Financial Services - The range of services includes:

• Retail Banking: Origination and customer acquisition: targeted campaigns, new products, KYC/form processing, customer referrals, account opening, inbound and outbound up-/ cross-sell programs, based on marketing initiatives; branch services: documentation, helpdesk, servicing and reporting; deposits, check and payment processing: automated clearing house (ACH), wire transfers, wholesale lockbox, scan/mailrooms, check truncation, Check 21 integration, verifications, data entry/documentation, Courtesy Amount and Legal Amount Recognition (CAR/ LAR), transaction processing and transmissions; account servicing: rate, fees and charges; standing instructions and bill payments; recoveries, remittances, reconciliations, adjustments and exceptions; data management and analytics; customer care: multichannel, multilingual CRM, escalation and help desk; collections: retention driven, or early out to late stage delinquency; mortgages and loans; cards solutions; fraud prevention; IT services: domain-intensive capabilities in branch automation, mortgages and loans, cards, payments, check truncation; application/information, third-party products and IT infrastructure management; finance and accounting; procurement and sourcing
• Commercial Banking: Transaction processing and documentation support: across trade finance, factoring, commercial lending and credit, payments, cash management, treasury, securities, money markets and custodial services; pan-generation technology skills: from legacy to contemporary, from corporate ERP systems to banking back-ends for architecting solutions with Straight-Through Processing (STP) to trigger operational actions and to meet legacy-wrap-and-extend needs; TradeFree™ suite of global trade services products: implemented in over 20 banks providing customized solutions for their needs; our solutions integration approach: reaches beyond banks to deliver interoperability with your enterprise, customers and partners, on multi-technology platforms across the global financial supply chain; payment processing and integration: MERVA, PCCONNECT, SWIFT Alliance; RTGS/ Fedwire, Bolero and CHIPS; Reuters, and with cash concentration, sweeping and pooling systems; protocols and interfaces: SWIFT, FIX, EDIFACT, Fedwire, FCI, etc; compliance: validation and integration of products with your systems, e.g., AML and other regulatory standards such as UCP600
• Capital Markets and Investment Banking: Origination and sales support: forms processing, KYC/verifications, documentation and records, new account set-up, account maintenance, compliance; securities/ capital markets: pre-settlement/settlement, confirmations, transfers and contras, reconciliations, corporate actions, taxation – processing, analytics, reporting; portfolio management: research, monitoring, analysis and reporting; investment bank institutional support: requests for information (RFI) and for proposals (RFP), performance reporting, market commentaries; research and advisory: pitch books, market intelligence; pension/ retirement funds: enrollments, contributions statements, fund calculations, payroll/dividend processing, payouts management, reconciliation, loan processing/cancellations and refinancing; Investor relations / customer care: shareholder services, trading, withdrawals, transfers, reconciliation, tax advice, change of address, product inquiries; Master data management, transfer agency, custodial support; regulatory compliance support: documentation, review and reporting; IT services: application management and support, information management and IT infrastructure management; finance and accounting: including specialized/technical/corporate functions; procurement and sourcing solutions

Insurance - The range of services includes:

• New Business and Underwriting: New customer acquisition support: including sales force / agency inquiries; illustrations, research, quotes; application filling support; new applications: document-/image-capture, mail room, processing forms, level 1 and 2 data entry; accompanying illustrations/ document verification, level 3 verification; KYC checks of customer/policy information, data entry; underwriting, case management, rating and rate class assignment; set-up policy accounts, policy/ contract/welcome kit printing including welcome calls; new customer care: issue certificate of insurance; enhancements of benefits; targeted cross-sell, up-sell per campaign requirements, or analytics-driven customer life-stage-specific strategies
• Policy Administration: Policy transactions: fee reversals and charge-backs, check cancellations, ECS (registration and transaction processing), payment reconciliation, change in vesting date, beneficiary or policy holder updates; renewal accounting: receipts, duplicate receipts; reinstatement of lapsed policies: revival accounting; benefits management: plan administration, additions/ deletions of riders, amendments and upgrades, surrenders, refunds, withdrawal, maturity of policies, survival benefits, actuarial support, trust accounting; Document handling/ workflow management; exception management; regulatory requirements; integrated front office/customer care: voice and non-voice customer support in multiple languages for sales, product inquiry and premium services; business Intelligence (BI) system implementations for data mining; IT services including legacy apps modernization and data conversion; applications management, Web enablement, mobility enablement
• Claims Management: Comprehensive managed claims services: notification, adjudication, subrogation, payments, decision support, including medical records optimization; process automation: digitize, index, abstract and analyze records: high frequency, low severity claims; claims accounting; medical records abstraction: document management, data aggregation/analysis; actuarial support, claims data analysis and segmentation; fraud management: inconsistency identification process, fraud detection, resolution, records standardization; analytics: data collection, processing and extraction; application development and management, legacy systems modernization/reengineering, data conversion, solution integration including with third-party products

Healthcare and Public Sector- The range of services includes:

• Revenue Cycle Management: Pre-admission and pre-service: patient referrals management; verification of patient information, credit, authorizations and liability; and scheduling; registration/ patient information services: determining patient insurance/ authorization/payment sponsorship; care completion services: discharge management, extract and print Explanation of Benefits/ Payments (EOB/ EOP) statements; billing, cash and revenue assurance such as insurance co-payments and deductibles; post service: claims processing – verifications, collections, denials, rejections, reconciliations and credit management; third-party liability determinations; grievance management such as resolve appeals, and disputes; IT: workflow-/rule-enabling and integrating existing applications (such as business rules to extract information from EOP and reconciling inbound payer remittances with individual patient payments); document imaging and Electronic Content Management (ECM) solutions; Master Data Management (MDM); payments: EDI/application/system integration and batch billing, reimbursement support; also inbound remittance advice (from payers) management such as lockbox/bank; finance and accounting: transaction accounting support, such as end-to-end accounts receivable (AR), collections and reconciliation; knowledge-driven/ technology-based controllership functions such as Enterprise Performance Management (EPM) solutions for single-point visibility into costs, utilization and revenues; strategic sourcing and supply chain management
• Citizen Services: Integrated CRM solutions: onshore service delivery capabilities; integrated voice/non-voice/data/online solutions integrated with back-office transaction processing and IT/data center support; transformation assessment/roadmap implementation of suboptimal contact center operations; citizen access and convenience: case management and workflow systems; self-service portals; document management, imaging, ECM solutions including Government Paperwork Elimination Act (GPEA) compliance implementations; revenues/tax management: end-to end collections (early out, late stage, primary/secondary, etc.); IT services: solution integration (across multiple agency systems); application management, e.g., legacy systems modernization, Web-enablement: information management including implementation of business-rules-based automation; mobility, smart card and wireless asset management solutions (including a RFID / GPS); F&A: transaction accounting including a AR /AP management, collections and reconciliations: implementation of accounting/business systems; controllership activities, including a budget monitoring/reporting, statutory compliance including a Federal Acquisition Regulation (FAR), Cost Accounting Standards (CAS), and Defense Contract Audit Agency (DCAA) audit support

The Minacs global footprint
(Click to enlarge image)

Awards & Recognition

• Dataquest Top 20 BPO listing: Ranked India’s #8 BPO company in 2010
• Ranked #8 among top Indian BPO firms by NASSCOM 2010
• Among Top 100 BPO firms by Global Services 100 (Neo Advisory and Global Services) in 2010
• Ranked among Top BPO Vendors in three categories (Top Industry Specific BPO Vendors, TOP BPO Vendors, and Top Call Center and Customer Management Vendors) by Global
• Services 100 (Neo Advisory and Global Services) in 2010
• Named by the State Government of Maharashtra* for the 8th Information Technology Award for 2010 under the category IT enabled services (BPO)
• Ranked #7 among top Indian BPO firms by NASSCOM 2009
• Named by the State Government of Maharashtra* for the 7th Information Technology Award for 2009 under the category IT enabled services (BPO)
• Dataquest Top 20 BPO listing: Ranked India’s #9 BPO company in 2009
• 2008 & 2009 – IAOP and FORTUNE® Magazine Global Outsourcing 100: Leaders category. Also best 10 in revenue growth and among companies with sales and marketing industry focus.
• Top four BPO service provider: Global Services 100 (neoIT and Global Services) in 2009
• Selected in the Leaders category of the International Association of Outsourcing Professionals (IAOP) 2008 Global Outsourcing 100
• Top among seven international vendors to consider in the “Decision Matrix: Selecting a Contact Center Outsourcing Vendor” by Data Monitor 2008
• IEXcellence Award for excellence in workforce management in 2008
• In the big league of Genpact, HCL Technologies, Patni, WNS – AMR Research
• Innovation Award by CIO magazine, CIO Asia, awarded the CIO 100 in 2007
• Ranked among top 20 companies in India to watch in 2007 by Business Today

Client Accolades

• Leading automobile manufacturing company recognized Minacs Marketing Solutions as Premium Partner 2009 – among its Top 15 suppliers – American Honda
• Premier Partner Award – leading automobile manufacturing company, headquartered in Japan honored Minacs for demonstrating excellence in quality, value and customer service (2nd consecutive year) – Mazda
• Top Supplier award – major automobile manufacturer – General Motors
• Ranked #1 for customer support by Consumer Reports subscribers for seven consecutive years for a Global Consumer Electronics Leader – Apple
• A major U.S. financial services client was ranked #1 for customer satisfaction in a Group 5 shareowner Services survey ranking transfer agents. At the time, Minacs provided 100% of the service for the client – Capital One

Whether it is a family seeking its first mortgage, a small business owner looking to expand, or a multinational corporation exporting to new markets, Royal Bank of Canada (RBC) is continually seeking ways to better understand its clients’ aspirations and goals.

RBC, based in Toronto, is Canada’s largest bank as measured by assets and market capital and one of North America’s leading diversified financial services companies. To keep up, it has to offer competitive new products and services. “It’s all about a relentless focus on communicating and building relationships based on trust, insight, and time to market to deliver value to the people we serve,” says Marjorie Mong, vice president, head of Application Services at RBC. The bank decided to offshore some of its IT development work to strengthen its offerings.

“Prior to this relationship, a few areas of RBC dabbled in offshoring and outsourcing,” says Mong. But no one shared the learnings across the enterprise because each department launched offshoring efforts on its own. No one coordinated governance or infrastructure. “As a result, we got mixed results and quality,” she continues.

Over the years, RBC has made dramatic operational changes to make it easier for clients and business partners to do business. With objectives of revenue generation and cost savings in a fiercely competitive business, RBC recognized its application development capabilities in 2005 needed to grow quickly to support business demands. It created a Global Resource Center “to pull together key offshoring learnings,” explains Tim Folkins, head of the new center.

“We saw a lot of work coming down the pike. We had many more projects than people to meet the growing demands of our internal business partners. Therefore, we had to find another way to augment our application development resources ? and offshoring was the answer,” says Folkins.

Today iGATE has over 500 people working on RBC projects.

Supplier selection

RBC first looked at large offshore suppliers and visited their facilities in India. “Those visits made us realize we needed to look at a mid-size supplier to influence and shape the direction and create opportunities for joint collaboration,” says Mong.

The bank looked at several suppliers and short-listed the selection to three. RBC executives flew to India to inspect campuses in Delhi and Bangalore. “Our management team narrowed down the choice to iGATE fairly quickly,” says Folkins.

He says iGATE not only hosted RBC executives at its facility but also took them to other facilities to talk to peers about sending work to India. They also visited the campuses of Indian universities producing the next generation of IT talent.

“Our vision and strategy — integration of technology and operations (ITOPS) — fit well with the RBC’s realignment,” says Swamynathan Ramchandran, iGATE’s business group manager for Canada.

Transition

If the RBC application development team thought setting up offshore centers was hard, getting their colleagues to send their IT development projects there was harder. Folkins says iGATE “invested in a large onsite team to work with RBC.”

To encourage offshoring, the partners created an iGATE/India awareness program. The bank’s offshore management team took multiple trips to India during the relationship’s first 18 months. “This strengthened the partnership. It also helped RBC management understand how it could leverage this offshore relationship,” says Folkins.

To insure success out of the gate, he says iGATE “provided us with topnotch people to work with us from the very first project.” The initial project had an aggressive timeline and required “quality we could not compromise.” Folkins says at first RBC employees “were a bit anxious about the quality of work they would see. “Our people discovered they could call iGATE at any time to discuss issues; they were responsive and made changes quickly,” he reports.

iGATE brought its delivery managers to Toronto; it hosted a two-day workshop “to socialize the team,” says Jason Trussell, vice president and regional manager responsible for iGATE’s buyers in Canada.

Employee resistance

“While most RBC IT staff supported the offshoring initiative from day one, some employees expressed some valid concerns,” says Mong. The bank’s response: “We implemented a full-scale internal communication awareness program to educate our employees about the benefits of offshoring application development work.”

At the end of the day, “the key message to everyone was that offshoring was not about job cuts. It was about augmenting our workforce in a flexible way,” says Mong. “Together we presented a consistent message that iGATE was there to help us address gaps and meet the increased demand from our internal business partners. We explained that we wanted to build a partnership with iGATE that was more like an extension of RBC’s IT organization.”

How offshoring works

Trussell says RBC’s IT department “had to get used to not having its teams co-located.” Then there was “the added dynamics of working with a different culture. We had to get the bank’s employees to get their minds around the fact we were going to do things differently.”

Trussell says creating the Global Resource Center helped because there was a single point of communication. “Bank employees knew where to go to set up offshoring,” he explains.

The time difference is 9.5 or 10.5 hours, depending on the season. “This can create difficulties,” Trussell continues. He says iGATE works late so the business days of the two partners match up.

Another challenge: India’s telephony. “Speaker phones that are four-bit mono don’t always translate the subtleties of a conversation,” Folkins continues. Now the partners like to use RBC’s internal instant messenger and video conferences to build effective communication.

The final challenge was the Indian penchant for not wanting to disappoint. “In our culture, we bring an issue to the fore so we can talk about it and deal with it. We like timely escalation. But Indians don’t want to escalate because they want to work on the issue first,” he explains.

RBC got around this cultural trait by having biweekly meetings for all projects. Folkins says he opens the meetings by saying, “This is a conflict-free session to bring up challenges and to identify solutions.” He says iGATE now realizes that “escalating isn’t the end of the world. We want to deal with issues as they arise versus going into crisis mode.”

The pillars of offshoring success

Trussell says iGATE coordinated “India 101 trips” for RBC management teams visiting the iGATE facilities in India. “They come to work on a specific project or to understand the dynamics of how the RBC’s offshoring program works.”

Trussell says Westerners have a preconceived notion that Indians can only do development. They go home with an appreciation of India as a place for IT services. It opens their eyes to what’s really possible,” he says.

He laughs when he says many visitors “are surprised our campuses are nicer than their offices.” In the end, he says the trips “break down cultural barriers.”

When RBC offshores a complex project “we send key individuals to India to work directly with the iGATE teams,” says Mong.

In the beginning, RBC expected that it could “just hand over the application development work and it would come back with minimal errors.” She says “the big learning” was the bank had to “continually communicate” with its offshore supplier. She says things got better with each successive project because RBC and iGATE integrated key learnings from each experience.

At the end of a project, RBC employs a feedback loop. It sends everyone on the project a survey asking what we can do better. “That’s how we amassed our learnings,” Mong says. iGATE also sends its staff to Toronto “to cross-pollinate their onsite team.”

Originally the contract was only for applications development and reengineering. Early on, RBC added maintenance of the older technology “to free up the bank’s subject matter experts to work on more strategic initiatives,” reports Trussell.

RBC is pleased with iGATE’s attrition rate. “Our attrition rate for iGATE resources working on the RBC account is lower than iGATE’s corporate attrition rate. And it’s lower than the standard rate for India,” Mong continues.

Originally, RBC viewed iGATE “as an added resource,” says Mong. Now the bank is pushing iGATE “to go out and earn the business from project managers.” The supplier has set up delivery managers for every RBC executive platform “to establish a relationship and get more business.”

Why this relationship works

Both partners are working toward the same goals. “iGATE tied its senior executive results to ours,” says Mong. “This helps to ensure that we’re both working towards the same set of goals.” Adds Trussell, “Our team’s incentive is to make sure RBC meets its goals. When they win, we win.”

“I’m aligned at the hip with their Global Resource Center,” Trussell says. “Senior leaders give this relationship their top attention.”

The partners took a metric-driven approach. The teams created a balanced scorecard. “We created a dashboard to measure the success of the relationship for our executive committee at RBC and iGATE,” says Mong.

“They pay close attention to us. They are responsive. That has paid dividends,” says Mong. “Jason is a constant fixture around here,” she notes. “His presence has gone a long way to help make this a real partnership.” Mong says she’s worked with the bigger suppliers in the past who have “account managers who come and visit you now and then.”

iGATE has continually adapted and expanded its onsite team as the projects grew. On day one iGATE sent three people to work at RBC. Today that number is nine. “We like the fact they are available at a moment’s notice. We are impressed with their proactive hands-on approach and attention to detail,” says Mong.

Being onsite also helps when issues arise. “We discuss the problem, fix it, move on, and then make sure it doesn’t happen again on future project,” says Trussell. “We never point fingers.”

It also makes it easier for iGATE to see new opportunities. “They see we’re working on something; they provide insight. They are aware of our key initiatives. They know what we are trying to achieve, so they understand what we need them to concentrate on,” says Folkins.

Mong says RBC knows “there are always two key reasons why application development work experiences problems: Requirements and expectations are not clear up front; and the parties underestimate time/resources. Both issues led to delays or cost overruns.”

There’s trust. Trussell says “they know we are working on their problems. They presume we are handling things.”

Business Benefits

Folkins says it takes 10 days to get a new employee up and running at the bank. “iGATE can onboard its resources faster, and they have access to a wide range of specialized skills,” says Folkins.

To date, RBC has significantly exceeded its cost saving targets since it signed a contract with iGATE. Folkins says RBC “couldn’t do the volume we do without outsourcing. It’s what we have to do to make sure we complete our projects to meet the bank’s business demands.”

Trussell points out that RBC’s offshore projects have increased tenfold since signing a contract with iGATE. “Originally we worked on offshoring projects for two groups in RBC applications. Today every department in the group sends us work,” he reports.

For the first time, RBC has a true follow-the-sun team. “We get more work done because our offshore team is working while we finish our business day,” says Mong.

The partners have adopted “a disciplined approach” to quality assurance (QA). “We’re looking to iGATE to look for innovative ideas on QA. They have offered good feedback on how to streamline our internal processes,” Mong continues.

“Our vision has led us to create a best-in-class offshoring partnership with iGATE, which will continue to help us to support the future growth of our internal business partners,” Folkins concludes.

Lessons from the Outsourcing Journal:

• Cross-pollinating offshore/onsite teams improves application development work.
• Communications plays a critical role to building an effective and efficient offshore initiative.
• Make requirements and expectations extremely clear up front.
• Don’t underestimate the time/resources need to build collaboration.
• Cultural differences are important to learn and understand.
• Incorporate learnings as you go to improve performance.
• Leverage time zone differences to your benefit.

Patrick Dolan, founder and chairman of BPO Management Services Inc. (BPOMS) of Anaheim, California, says this market ($500 million to $3 billion in revenue and 100 to 7,000 employees) is underserved even though there are around 15,000 service providers aiming at this market. Many of the providers are privately held and under-capitalized, he says, and most offer only a “single, narrowly-focused solution instead of a holistic, comprehensive service offering.”

In contrast, Dolan states BPOMS is “exactly like a tier-one service provider (such as IBM, Accenture, or EDS) in our services delivery model, our standards, best practices, SLAs — but we’re more willing to customize the solution than they are.” BPOMS is also a public company; as such, it understands requirements for its clients’ Sarbanes-Oxley compliance.

The volume of work from a mid-market company is not large enough to attract a tier-one provider. Birchwood Automotive Group faced this dilemma. It has nine dealerships, owns National Vehicle Leasing, and is the largest automotive retailer in the Winnipeg market and one of the largest in Canada. “But we’re small compared to similar businesses in a city the size of Chicago. So larger service providers aren’t interested in us,” says Jim Borger, internal analyst at Birchwood.

Serena Software, Inc., headquartered in San Mateo, California, is an innovator in the software development industry, focusing on application life cycle management for distributed and mainframe systems. It has 29 offices in 14 countries. Even so, Carina Ferrel, VP of IT, says Serena is a relatively small company. “But we compete in an enterprise-class market, so we need enterprise-class systems. For a company our size, the only way to afford them is to outsource.”

Both companies turned to BPO Management Services.

A customized solution

Prior to BPOMS, Serena Software was outsourcing to a tier-one service provider that had been providing unique services to the software innovator rather than the usual offering. “But they became inflexible and wouldn’t do anything out of the box,” recalls Ferrel. “When it was close to contract end, if we had service or enhancement requests, they charged us an arm and a leg, hoping we’d go away.”

She conducted a time-consuming search on the Internet for another provider — looking for a company that owned a large mainframe to share or that had mainframe services in a hosted model. She found Blue Hill Data Services (which was later acquired by BPOMS).

When the relationship began, the provider ran into a challenge. “We needed every one of our software products to be bleeding edge. Back then, the provider was wary of putting untested software on their servers and questioned our requests,” says Ferrel. “Even a system crash can be good from our point of view if it helps us find a root cause of an issue.” The provider, of course, was aiming at stability. The two companies had very different objectives around the service delivery and needs.

But “BPOMS is flexible,” states Ferrel. “They came to understand we’re an innovative software development shop and also came to understand what the sense of urgency is for us at a given time and how to adapt to that. They learned what to react to and what not to react to. And we learned to communicate and provide instructions to achieve maximum service delivery.”

There was another challenge. The initial scope of the agreement just involved buying time on the provider’s infrastructure. From the beginning the provider wanted to provide all the IT support, but Ferrel knew that model wouldn’t work. Not long after, Serena bought its own hardware and the scope changed to managing the hardware operations.

Ferrel says the supplier at first was “adamant about owning things but was flexible and changed their minds later on.” She says BPOMS is willing to listen and figure out what they need to do to meet client needs. She adds that honest and open communication is a key to their successful relationship.

The scope evolved over the past 10 years to the current hybrid hosting solution. Serena owns pieces and parts of the solution, but BPOMS owns most of the hardware infrastructure, and its staff runs the hardware. Serena keeps two in-house system programmers who are responsible for the software, creating environments for users and developing the company’s application products.

Even though Serena now procures its own hardware, the outsourced solution enables curbing the cost of growth. Serena’s capacity at first was 10-12 MIPS; today, it’s 400+ MIPS. According to Ferrel, the company’s operations and monthly expense has remained almost flat for the past 10 years, and it reduced its internal systems programming staff from three to two.

She benchmarks BPOMS services at times of contract renewal and each time has found that the provider is “realistic about costs and gives us a good, fair deal.”

Trust is another key factor in their successful relationship. “We know now how each other will act and what to do to get things done. And we trust their management with things about our company that are not public knowledge,” says Ferrel.

They meet formally every six months or quarterly and check in frequently with each as needs arise. She cites an example of such a need: “I could tell them, ‘We might do such and such. Could you research that for me and tell me how we could do it more affordably?’”

Solution for efficiency

A little over two years ago, Birchwood Automotive Group in Canada had a storage challenge. The company creates at least 10,000 sales and leasing files a year (with 30-60 pages in each file) and needs to retain them for at least seven years. Borger says about a year ago they were contemplating building a facility to store these files and other documents.

“But we really wanted to store them in a way that would make them more efficient to access,” he explains. Sales personnel frequently looked up something in the files and then didn’t return them. “If they’re not returned, we’re lost. These papers can save us in a court case. And we need to look at the leasing files constantly regarding receipt of monthly payments.”

The IT department looked at various storage suppliers’ offerings. Birchwood chose Adapsys (since acquired by BPOMS), which was recommended by one of Birchwood’s smaller leasing companies.

BPOMS scans the Birchwood groups’ documents and then hosts them for easy accessibility. BPOMS prices the service per document, and the price decreases as volume increases. The service level agreement is for a five-day turnaround.

Praising BPOMS, Borger says “they have bent over backwards for us.” That partnering approach was present from the beginning, when Birchwood gave its new service provider a four-month backlog of files.

The service provider also partnered with Birchwood during the transition at its nine different locations to help gain end users’ buy-in and train them on the new system. Some balked at first, says Borger, not wanting to follow new procedures such as removing staples from documents before sending them to be scanned. But he says everybody is on board now and happy with the service.

Now the sales staff can access files from their laptops and get updates on the lease fleet. More importantly, the ease of accessibility to files results in peace of mind. Borger says, “When customers have issues, we can answer their questions quickly — and with the facts in front of us.”

Comprehensive, holistic services

BPOMS has a comprehensive range of solutions covering back-office activities and IT. Birchwood’s solution is part of the BPOMS ECM (enterprise content management) division. This area includes finance and accounting documents as well as some documentation projects for municipalities (such as digitizing birth and death records). The other two divisions are ITO and HRO (human resources outsourcing), which is delivered in a Software-as-a-Service (SaaS) model.

The company also has offshore capabilities in Russia and India for “heavy lifting” or large application development and maintenance projects. They use an onshore-offshore model with a small team of onshore people who manage the larger offshore project teams. Clients have the advantage of BPOMS managing the offshore work for them; most mid-market companies are too small to manage and coordinate offshore projects. In addition, the company has a nearshore service delivery option in Canda for U.S. clients.

Dolan founded the company in 2005. His insights into the nuances in provider capabilities come from working for ACS, EDS, and Citicorp in the 1980s and from successfully growing two other companies: SMS (acquired by Infocrossing) and Infocrossing (acquired by Wipro), which provided comprehensive ITO and BPO solutions.

In today’s world, executives must manage their companies more closely and meet their growth and profitability commitments by doing more with less. They need greater efficiencies, improved productivity, and lower total cost. This is especially true in the mid-market where there currently is enormous pressure to reduce back-office spend.

As Dolan points out, the on-demand offerings of BPOMS mean clients can enjoy services such as customized disaster recovery, data migration, open systems, and mainframes or mid-range server hosting and yet pay for only the amount of processing power they need. And, unlike the inflexible experiences many clients encounter with some tier-one service providers, customization is part of the game plan at BPOMS.

Serena Software’s VP describes another important benefit of working with BPOMS — the longevity of the staff. “It’s not a company with a revolving door. Their people are happy, and you can tell it by the way they work.” She adds that the relationship is based on a partnering mind-set and skin in the game so it will be mutually beneficial. So far, the outcome over the past 10 years is “a tremendous relationship.”

Lessons from Outsourcing Journal:

• The mid-market ($500 million to $3 billion in revenue and 100 to 7,000 employees) is underserved even though there are around 15,000 service providers aiming at this market. Many of the providers are privately held and under-capitalized, and most offer only a single, narrowly focused solution instead of a holistic, comprehensive service offering.
• Mid-market companies are best served by providers that operate like a tier-one service provider (such as IBM, Accenture, or EDS) in the services delivery model, standards, best practices, SLAs but unlike tier-one providers, also are willing to customize the solution.
• When a client’s core business is producing innovative products, it should choose a service provider that is willing to adapt to different needs and not always aim for stability.
• Mid-market companies are usually too small to have resources to manage and coordinate offshore projects. They benefit from using providers who have onshore staff to manage the larger offshore teams for the client.

As Eulala Mills-Diment, Chief Alliance Executive for the Alternative Service Delivery Secretariat in British Columbia, Canada, explains, “Since we’re funded by people’s taxes, the public sector is always going to be focused on getting the best possible value for public dollars. In the private sector, the focus is on satisfying the needs of the shareholders, who are generally looking for the best return on investment. Those two disparate needs come into conflict when you’re talking about what’s in and out of scope in a public-sector entity’s relationship with a private-sector service provider.”

Outsourcing (or Alternative Service Delivery, as it’s referred to in British Columbia) cannot work successfully unless both parties’ interests are aligned and they can manage to overcome inherent conflicts (whether or not a government entity is involved). We at Outsourcing Center studied a highly successful relationship in BC’s government; the client nominated the relationship for a 2007 Outsourcing Excellence Award. The parties involved have a relationship built on a framework that established and sustains aligned interests. This article shares their relationship best practices.

Best Practice #1: Expectation Management

Bordering the Pacific Ocean on the western edge of Canada, British Columbia (BC) is the nation’s fourth largest province in area and third largest in population. It is home to such large metropolitan areas as Victoria, Vancouver, Surrey, and New Westminster.

Prior to her current position in Alternative Service Delivery, Mills-Diment served as Executive Director of Workplace Application Services for the Ministry of Labour and Citizens’ Services for the British Columbia provincial government in Canada.

The Ministry is responsible for the delivery of more than 700 government services and programs to British Columbia’s more than four million citizens; e-Government services for individuals, families, businesses, and government suppliers; and B.C. public-sector service entities (such as the Chief Information Office – Corporate Information Management Branch, Shared Services BC – Workplace Technology Services and Accommodation and Real Estate Services).

The Ministry’s Workplace Applications Services division has an Alternative Service Delivery) relationship with Canadian-based TELUS Sourcing Solutions, Inc. for the human resource (HR) payroll information-management system and business processes around payroll, including benefits and pensions monitoring and workers’ compensation for 30,000 direct B.C. government employees.

The Ministry had already completed a process transformation prior to handing the work over to TELUS for stable operation and handling a substantial growth agenda to potentially extend services beyond core government. The goal was to deliver more integrated and deeper value for the sector than could be achieved on an individual basis.

Mills-Diment says BC selected TELUS among the other providers proposing solutions primarily because of its vision for enabling growth in services across B.C. and throughout the country and its relationships with healthcare in Calgary and Hamilton and a school district in Calgary. The provider has a 15-year footprint with large-enterprise government clients throughout Canada. It also has a track record of keeping confidential government information secure and has expertise in dealing with multi-union environments.

TELUS also adopted a partnering approach to the relationship, and partnering is a key component in the concept of B.C.’s Alternative Service Delivery model. Its performance-based contracts and relationships are very much focused on joint outcomes based on the needs and priorities of the client.

In addition to excellence in service as well as enabling growth, the Ministry wanted to cut costs and focus on its core business. An important outcome of outsourcing the HR payroll functions was the goal of freeing up time and capital resources to enable the HR organization to focus on attracting, retaining, and growing talent.

Larry Spagnolo, President, TELUS Sourcing Solutions Inc., explains that the public sector in Canada faces a challenge of managers retiring in the next few years. “Canadian governments will need to seek more creative ways to get the work done,” says Spagnolo. “Unlike the United States, Canada has a relatively small population compared to its land mass, so it will need to partner with external organizations for the work the government needs to do.”

Mills-Diment recalls that the ministry’s relationship with TELUS started with an expectation-management exercise aimed at aligning both parties’ interests. “We did something that we called a ‘relationship launch,’ where we brought all the senior executives from both organizations into a room with a facilitator. We focused on discussing this question: ‘If nothing else happens, what are the things that we need to accomplish to consider this coming year successful?’ And we jointly decided on seven different things.”

Spagnolo agrees this is a key to the relationship’s success and adds: “We spend a lot of time at the beginning of our client relationships understanding why the organization is outsourcing and what is the purpose of the partnering relationship. Many organizations focus up front on just the transaction of outsourcing and how to do it instead of seeking clear mutual understanding of the true drivers and what the client really wants to accomplish.” Spagnolo states that many organizations enter outsourcing relationships without having an overall strategy, but he compliments the Ministry’s Workplace Applications Services division. “They had an overall transformation strategy, of which HR is just a component. When we take time to clearly understand the real drivers, we can customize a solution to meet those needs.”

In addition to understanding the client’s drivers, Spagnolo says there must be clarity around the benefits both organizations will gain from such a relationship. “The client is not just buying a service; we’re entering into a partnering relationship together,” he says. “There must be mutual benefit and there can’t be a win-lose approach to anything. This is not like buying a commodity where the next day you both go off in your separate directions. You’re actually going to work together the next day, and you must have joint objectives.”

Mills-Diment echoes this advice, carrying it further than the initial stages of the relationship. “As a general philosophy, there simply must be an ever-present mindfulness about the importance of the strength of the relationship. The parties to these kinds of relationships are continually going to deal with expectation-management issues. No matter how clear you are about communicating your expectations, they get misaligned. It just happens. So you can never let the relationship float or simply coast.”

She continues: “We both keep our eyes solidly on making sure the relationship is protected and growing so that we can work our way through the tough stuff and come up with solutions that meet both our needs.” Their approach is based on the Harvard Interest Based Negotiation Model with questions such as “Help us understand what the challenges are for you,” “How can we get to a ‘yesable’ proposition?” and “How can we get to a shared-interest solution?”

Their expectation-setting management continues in an annual joint planning session where they repeat their relationship-launch exercise of reviewing what’s on their plates, setting their objectives, and also deciding the things they must accomplish together in the coming year to consider it a successful year. “We find this to be very beneficial,” states Spagnolo.

Best Practice #2: Flexibility

According to Mills-Diment, even expectation management, open and ongoing communications, effective service levels, clear roles/responsibilities and accountabilities for each party, and an effective governance structure “won’t make a relationship work if there isn’t a relationship.”

They encountered challenges in the transition phase. Understandably, taking 97 percent of the buyer’s unionized public-sector employees who had been doing the work in house and moving them to the provider’s private-sector way of doing things was not simple–let alone getting the government to adjust to the cultural challenge of services being delivered in a different way. It required substantial change management and leadership support. At the same time, the ministry was undertaking a major implementation of a time-and-leave-capture system. Getting everything to work together and ensuring all employees knew what they needed to do to support the transition was “challenging.”

In addition to transition challenges, the reality in any long-term relationship is that things change over time from what the parties envision when they write their contract. A crucial key to success is the willingness and the mechanisms that allow both the provider and client to be flexible in adapting to evolving change and yet maintain the spirit and intent of their original joint vision. Without a strong foundation for a relationship approach, the parties won’t be willing to be flexible.

“There have been changes to the government’s business environment since we signed the contract three years ago, and our business is evolving as well,” says Spagnolo. “To be successful, you have to build a contract and the relationship to be elastic and adapt to change. Otherwise it will be difficult to work together.”

In addition to establishing new objectives at their joint annual meetings, he says they talk about how things have changed during the prior year and whether they need to execute on the contract differently, as some things become more (or less) important over time. These discussions require open, candid communications. The relationship won’t work if either party feels threatened by putting things on the table.

Summing up the way of dealing with change and with problems in this relationship, Mills-Diment comments: “Like everyone, we’ve had some problems, and things have gone sideways from time to time. But we have never lost sight of the importance of the relationship or stepped aside from the commitment we have to one another to be strong partners and to be advocates for each other through this process.”

Lessons from Outsourcing Journal:

• Understanding and managing each other’s expectations on an ongoing basis is essential for success in outsourcing. It is particularly crucial in government outsourcing arrangements where there is a disparity between the public sector’s need to get the best value for public dollars and the private sector’s (provider’s) need for return on investment to satisfy shareholders.
• When choosing an outsourcing service provider for a government client, three important selection criteria are: a significant footprint and successful track record with government clients, track record of keeping confidential government information secure and, often, expertise in dealing with union environments.
• Establishing a performance-based contract and relationship helps outsourcing buyers and providers focus on joint outcomes based on the needs and priorities of the client.
• A best practice for success in outsourcing is for the buyer and provider to come up with solutions that meet both parties’ needs. An approach to ensuring this happens is to ask each other questions such as: “Help us understand what the challenges are for you” and “How can we get to a shared-interest solution?”
• A crucial key to success in outsourcing is the willingness and mechanisms that allow both the provider and client to be flexible in adapting to change as the relationship evolves over time yet maintain the spirit and intent of their original joint vision. Without first establishing a strong foundation for a relationship approach to change, the parties won’t be willing to be flexible.

Today another metric is emerging: countries that can do business with American customers. It’s the topic that everyone still wants to ignore, publicly at least. But it’s getting harder.

The more customer-centric the outsourced business service, the greater sensitivity buyers have to where the service is located. They understand that the ability to retain customers makes this the prominent factor to consider when deciding where to outsource those services.

“But it’s also scaled on the amount of intuitiveness and creativity necessary on the part of the outsourcing provider’s employee,” says Larry Keating, CEO of Toronto-based Keating Technologies, a tech-based CRM supplier. Keating says low creativity tasks are better farshore candidates. But he believes “the more refined processes, or those that require sophisticated communication between customer and supplier to solve the problem, typically work better if kept in North America.” In his experience cultural similarities between the outsourcing provider and the firm that retains it also “go a long way in measuring success.”

For example, last spring Delta Airlines surveyed its customers on the acceptability of offshore agents. Nearly 80 percent expressed a hesitancy to deal with an offshore agent and virtually half of them said they would be willing to pay a small fee (up to one dollar) to speak with an American agent.

It’s about the Customer…Again

Walker Information recently released a market loyalty study on information technology purchases. It discovered less than half of the 2,200 surveyed buyers were predisposed to buy again from the same vendor, even though 80 percent were satisfied with the product they purchased.

According to Walker, loyalty cultivated after the sale has a profound impact on several key financial measures, including growth in revenue and operating income. “This shows what retention means to revenues and margins,” says Denis Pombriant, managing principal of Beagle Research Group. “The voice of the customer is getting louder and customer loyalty/retention is becoming a primary driver.”

Pombriant suggests these conclusions portend a change in business intelligence that puts more emphasis on customer preferences and satisfaction (which lead to greater loyalty and retention) is beginning to significantly influence business organizations when considering location of their outsourced services.

“What’s old is new again,” suggests Keating. He says when he first got in the CRM business years ago, it was about listening to customers and making it easier for them to get the help they needed.

“But after a time,” he continues, “the ‘service’ aspects of customer service began to be eclipsed as companies went for ‘cheapest is best’. And despite many claims to the contrary, the voice of the customer had less influence in corporate boardrooms for a time. But now that firms know the very high replacement value of a lost customer, those voices are being heard again.”

More Eyes on Canadian and Other North American Providers

This suggests that nearshore outsourcing providers–Canada and to a lesser extent all NAFTA countries–are still attractive options and in a strong position to continue capturing a significant piece of market share. Canadian firms attract sophisticated projects closely tied to American culture and the English language. That Canada is seen by many as the “51st state” underscores why, despite the competition from cheaper offshore providers in India and the Far East, Canada is holding its own against farshore competitors.

Examples include software development related to business intelligence, industry-specific applications, business process outsourcing, and customer service-oriented call centers.

Outsourcing to Canada is less of a sensitive topic among American firms and customers and has attracted less political and media attention in the US than the outsourcing of US-based work to facilities overseas.

“Canada has essentially the same culture,” says Peter McAdam, President and CEO of Everest Group Canada, “and many of the same companies have locations on both sides of the border. Education is similar and so is the concern for privacy and individual rights. You get all this plus polite, friendly, and helpful people at less cost. Companies are comfortable outsourcing to Canada and callers/users are comfortable calling there. They find little difference between Canadians and American counterparts.”

Datamonitor reports Canada’s labor wages are up to 30 percent cheaper than the US, although the combination of a stronger Canadian dollar and recent US inflation is beginning to slightly close that gap. Mexico’s labor savings can be as much as half of US wages. An additional advantage of outsourcing to US border nations is that telecom costs are roughly equal to those in the US.

India’s call center wages tend to run from 20-30 percent of those in the US according to Datamonitor. But like Canada, India’s labor costs are rising, albeit a bit more sharply. Overall, Indian managers are making roughly one-third of their American counterparts; these salaries are moderately increasing, but not significantly according to a September 2004 study by Mercer Human Resource Consulting.

Another part of the explanation behind Canadian outsourcing growth may be relative job volume. With about 150,000 workers devoted to outsourcing projects originating in the US and half of those in the call center industry, Canada seems to pose little threat to the 2.5 million US jobs that could be outsourced, according to Jacob Jegher, an analyst with Celent Communications. An October, 2004 Datamonitor report, The Vertical Guide to Contact Centers in North America to 2008, says the Canadian call center market will continue to grow and be a major benefactor of America’s loss. As firms outsource more customer service operations, Datamonitor expects Canada to establish 800 new call centers and 93,000 agent positions between now and 2008.

“Canada’s volume of outsourcing employees is well below India’s or other Far Eastern countries” he says. US companies relying on others to run their business intelligence analytics, corporate reporting, and data warehousing operations want those functions geographically closer due to heavy involvement by the US-based project manager. “Canada is closer for companies that need to visit the site with any regularity,” says McAdam.

Retaining Ownership and Control

Another heretofore unappreciated peril of offshoring is now a greater consideration, especially in IT and software development: who owns it when it goes out of the country.

In the fall of 2004, Datamonitor asked respondents to prioritize the elements behind their deliberations. Loss of control and the inability to closely monitor their offshore provider were the greatest objections to offshoring, and all but one of the nine categories below had a greater than 50 percent objection rating.

“This suggests that the savings from offshoring don’t come without some risk. There can be a downside,” says McAdam. Keating wonders if this realization is the beginning of a shift in the winds of corporate thought. “North America’s continued hyper-focus on the bottom line in this key customer-facing process, without due consideration to its context and impact, will inevitably lead to major losses on the top line. Maybe they’re waking up to that.”

As more companies send jobs to foreign shores, they also send critical knowledge about processes, procedures, and development. When business conditions change, a company can’t just go to the other side of the world and reclaim them. The new owners aren’t likely to give them up without a fight. The similarity of the Canadian regulatory environment as well as other NAFTA signature nations may also drive more work to nearshore providers instead of lower-cost and more risky far-shore locations.

“Companies retain greater control of intellectual property if they outsource those processes nearshore because of similarities in our laws surrounding ownership. Firms that outsource want that control over what they develop and share with others and see nearshoring as a tangible benefit offered by providers within the American continents,” says Pombriant.

“However,” says Gary Griffiths, CEO of Everdream, an aftermarket IT and OS service company, “our outsourcing effort to Costa Rica didn’t work all that well either and re repatriated that after a time due primarily to the dissimilarities between our culture and that of our Central American provider.” Griffiths explains he has tried to fit outsourcing into his company’s CRM model but to date has found little success. He confesses he’s become less comfortable with outsourcing to anyone other than an American provider because of the recent negative company cultural experience.

Cultural Issues and Why They Matter to Customers

The well-publicized revolt against farshoring by some sectors of American society is a factor in the emerging business metrics that are part of many firms’ outsourcing formulae.

Not long after Delta’s “offshore agent backlash” lesson, Convergys’ Knowledge Center released the results of a study further underscoring customer preferences. When offered four alternatives if a US agent was unavailable (Email, interactive voice response, searching the company’s Web site for a solution or speaking with an offshore agent), the offshore agent came up last.

“This certainly suggests why offshore providers are doing all they can to make their agents appear to the caller like an onshore agent,” says Everest’s McAdam. “Some businesses see themselves as more affected by adverse public opinion, which explains some business’ hesitancy to go farshore,” he adds. “Others are restricted due to source of funding, e.g., taxpayers to government bureaus and crown-owned corporations.

“But cultural similarities are a factor when dealing with customers who may be turned off by a foreign accent or by someone who doesn’t understand language nuances,” he suggests.

McAdam notes the type of outsourced task is also a factor. “Banks would never send call center work offshore for their high net-worth clients. But they would be more apt to send internal IT helpdesk call center work offshore– things that require less human interaction,” he says.

Keating emphatically agrees with the Convergys study. “Without a doubt the customer has spoken clearly and decisively, both anecdotally and statistically, about offshore customer care.”

Griffiths explains he has tried to fit outsourcing into his company’s CRM model, but to date has found little success due to cultural mismatches between Everdream and its outsourcing provider in Costa Rica. He confesses he’s become less comfortable with outsourcing to anyone other than an American provider because of his recent negative experience.

“It’s all about compatibility between the customer and the help-agent and between the company buyer and the supplying firm. And the most important person–the end-using customer–is again taking his rightful place atop that pyramid,” says Keating.

This plan included reducing cost-up to 30 percent in some cases–while still maintaining the same or even better service. The plan also called for a complete business transformation which would be done simultaneously with the cost custting, recalls Jeffrey Smith, Manager, Finance.

The utility worried it could not accomplish its stated goals in the time allotted if it attempted to do this internally. The utility wanted no shocks about its outcome. “We didn’t want to take the risk,” he says.

Instead, Hydro One decided to outsource “to a credible third party who knew they could meet the schedules on our business plan.” In March 2002 Hydro One outsourced finance and accounting, payroll, customer relations management, settlements, supply chain, and IT to Capgemini, an outsourcer that has become a powerhouse in the power industry.

“We knew we could make good on our economic promises because we have a deep understanding of the industry and a long history with the client,” says Stephen Power, Account Executive for Capgemini. The 10-year contract guarantees that Capgemini will cut costs the required 30 percent by the end of the contract period. Smith points out that Hydro One will achieve much of that savings by next year.

Capgemini’s Flexibility in the Face of Change

In the middle of this contract, the provincial government changed the way it governs the electricity industry. Capgemini had to work with Hydro One to make sure the utility’s customers were treated properly according to the new rules. One requisite change: now part of the Hydro One’s systems needed adjustments to properly treat and bill the customer.

“We had to tweak this relationship to improve their services,” says Power. “Capgemini was flexible given our changing needs,” adds Smith.

Under the original assumptions, Capgemini worked on building IT services that addressed the new needs of a deregulated marketplace. Then, it suddenly had to make changes to Hydro One’s rate structure to reflect the reregulation in a very short time frame. “The deadlines were aggressive,” says Power. The Hydro One outsourcing arrangement integrates IT with its underlying BPO processes. Capgemini worked with the utility to make changes to its IT to support business process improvements which contributed to the cost savings required by the contract.

Both parties adopted a collaborative bond from the beginning. “We have developed a solid, open, trustworthy relationship,” says Power. “It’s required because of the complexity and size of the deal.”

Smith says the underlying goal of reducing cost remained the same. Dale Rooney, Contract Manager for Capgemini, predicts Capgemini will be able to reduce the costs even further when the two parties sign the next contract. “We continue to make the deal better every day,” he says.

Seeking Union Backing

One of the risks of business transformation was getting union support for an outsourcing deal, since 926 Hydro One employees were scheduled to join the Capgemini ranks. “We knew we had to support the unions because they were stakeholders. There was no deal without them,” says Rooney.

Smith says one of the reasons it selected Capgemini was that it was running a similar and successful engagement for Ontario Power Generation (OPG) that has the same unions. Rooney says Capgemini built on the good working relationship it had with the unions at OPG to make the Hydro One transition easier. Capgemini guaranteed all union jobs for two years, which helped generate union support.

Smith says one of Hydro One’s biggest fears was that there would be some interruption in their service. Adds Rooney, “Understanding the pace and degree Hydro One was willing to absorb and respecting their comfort level, we knew we could not complete a business transformation overnight, so we went very slowly and deliberately. We started out with high value, low cost and low risk changes.”

The relationship between Hydro One and Capgemini continues to hum like a high-voltage transmission line, remaining ready for the next challenge spike. If the rules change again, the two partners will be ready.

From my perspective (I’ve spent 25 years in the outsourcing world), the debate has not been very thoughtful. It’s strong on rhetoric, tapping emotions instead of dispassionately examining the pros and cons. I want to take the time to make an unemotional business case for offshore outsourcing.

First, some clarifying definitions. Outsourcing occurs when one company hands over the responsibility for a process or a part of the process to the outsourcing supplier. As I explained in my book, Turning Lead Into Gold, The Demystification of Outsourcing EDS created outsourcing in the 1960s. Most people have experienced outsourcing, even if they don’t know it. Check your paycheck. If it’s produced by suppliers like Paychex or ADP, then your company has outsourced its payroll function to an outsourcing supplier.

However, until the late 1990s, most of the outsourcing in the United States occurred between American buyers and suppliers. Today the debate centers on offshore outsourcing. Offshore outsourcing happens in two ways. First, American companies are sending work directly to foreign outsourcing suppliers. Second, American outsourcing suppliers are opening up offices abroad to take advantage of the difference in the price of labor. They determine the best place to send the work depending on the cost and skill levels involved. Of course, when other countries send their work to American outsourcing suppliers, that’s offshore outsourcing, too.

In addition, some American companies are offshoring by opening their own captive operations in foreign countries. In this instance, they are moving their operations to a less costly location. American companies have been doing this for years — moving out of high-cost areas like New York City or San Francisco to other parts of the country that have lower costs. Going overseas is an extension of that trend. But this is not offshore outsourcing because the company still owns the operation. When a company outsources its work offshore, it’s turning over responsibility for the process to another company outside US boundaries.

Here are seven myths about offshore outsourcing:

1. Outsourcing is a new phenomenon.

The original theory derives from Adam Smith’s competitive advantage. He published his landmark book, The Wealth of Nations, in 1776. Offshore outsourcing is the natural evolution of the industrial and information revolutions that preceded it.

American companies have been offshoring for decades. When you get undressed tonight, read the labels on your clothes. I’d wager very few items were made in America. American apparel manufacturing has been using cheaper foreign labor for over a decade.

2. Offshore outsourcing causes job losses.

Not so, say the statistics.

It is true American jobs are going abroad. Gartner predicted at its ITxpo in Barcelona, Spain last March that up to 25 percent of traditional IT jobs in developed countries would be situated in emerging markets by 2010.

But is that a net job loss? The Information Technology Association of America (ITAA), an industry trade group, wanted to definitively answer the job loss question. It sponsored a study completed by Global Insight, which was published in March 2004. “The Comprehensive Impact of Offshore IT Software and Services Outsourcing on the US Economy and the IT Industry” has some eye-opening statistics.

The study predicts the US economy will create 516,000 new IT jobs over the next five years. That number would only be 490,000 jobs without global sourcing. Of the 516,000 new IT jobs, Global Insight reports 272,000 will go offshore. That leaves 244,000 new jobs that will remain in the US.

And, offshore outsourcing also creates jobs in other sectors besides IT. The report says the incremental economic activity that follows offshore IT outsourcing created over 90,000 net new jobs in 2003 and probably will create 317,000 net new jobs by 2008.

The report also pointed out that the dotcom debacle caused more IT job losses than offshoring. Global Insight estimates the number of displaced IT software and service jobs due to offshore IT outsourcing as of 2003 was 104,000. This number includes jobs US companies eliminated by replacing American workers with foreign workers as well as jobs that were never created as other US companies expanded their IT activities by going offshore directly. The study says “it is important to note” that the industry has lost 372,000 jobs since 2000. It also says that 10% of all IT software and service jobs have disappeared since 2000. But only 2.8% of the total IT jobs were lost because of offshore IT outsourcing.

The study adds the impact of global sourcing on employment varies by industry. Major industry groups expected to gain a “significant” number of incremental jobs over the next five years include education and health services, transportation and utilities, construction, wholesale trade, financial services, professional and business services, and manufacturing.

The same is true in other economies. Canadian David Ticoll, author of The Naked Corporation: How the Age of Transparency Will Revolutionize Business, points out about 20,000 Canadians provide offshore IT services to the United States and other countries. American businesses prefer to outsource to nearshore countries like Canada, he explains. “If Canadian firms captured only 3% of the projected global outsourcing market, we will create more than 200,000 jobs by 2010. This could more than offset the 75,000 Canadian IT jobs we expect to move offshore,” he writes.

3. Offshore outsourcing is bad for the economy.

Nay. Nay. Companies look at offshore outsourcing because of the labor arbitrage — the difference in wages between US and non-US workers. The study found cost savings totaled $6.7 billion in 2003. “This represents an assumed 40% savings versus what would have been spent if domestic resources had been used,” it states.

The costs savings lower inflation, increase productivity, and lower interest rates, according to the Global Insight report. This happy constellation of events “boosts” business and consumer spending. To be exact, the study said “the benefits of global sourcing” added $33.6 billion to the US gross domestic product (GDP) last year. By 2008, it calculates real GDP will be $124.6 billion higher than it would be without offshore IT outsourcing.

At the same time, the study predicts demand for US exports is increasing due to the lower prices of American goods and services and higher incomes in the offshore outsourcing destinations. Global Insight calculated real exports were $2.3 billion higher in 2003 and are expected to be $9 billion higher by 2008.

4. Offshore outsourcing depresses US wages.

Au contraire. According to Global Insights, workers “are expected to enjoy a bump up in real wages. Offshore IT software and services outsourcing actually increases the average real wages of US workers.” The report says real wages were 0.13 percent higher in 2003 with an expected increase of 0.44 percent by 2008.

5. Companies lose control of their processes when they outsource them to providers halfway around the globe.

Outsourcing, by definition, requires the buyer to relinquish control of a process to the supplier, who is an expert in the process and able to perform it better, faster, and cheaper. Strong corporate governance is required in all outsourcing transactions, including offshore ones. Careful monitoring of any outsourcing relationship ensures the buyer is getting what it is paying for.

6. Companies cannot ensure data security and privacy when they outsource offshore.

Data security is a problem whenever employees have access to sensitive information. American suppliers, however, are particularly sensitive to the issue. At a Convergys call center in India, guards search employees before they enter the building. There are no memory cards in any computer. It keeps all its data on computers in the US. The security there far exceeds anything I’ve seen here in the States.

7. American companies don’t have to outsource offshore.

Oh yes they do. Because their competitors are outsourcing offshore. Companies that don’t look at lowering their costs become uncompetitive in the global marketplace.

Witness the story of eFunds, which is fielding calls at a call center in India for the Utah Department of Workforce Services. When the word got out, the supplier was caught in a political firestorm. EFunds agreed to bring the work back to the States, but the move would cost Utah $63,000 more, according to John Nixon, the state’s director of finance. If the state of Utah moved the call center in-house, Nixon predicted it would cost the department over $1 million to run it 24×7. Overall, Nixon told the Deseret News the outsourcing contract is saving the state $420,000 over the five year contract.

Strip away the emotions and look at the numbers. In my opinion, offshore outsourcing is a TINA — There Is No Alternative.

Lessons from the Outsourcing Journal:

• Outsourcing occurs when one company hands over the responsibility for a process or a part of the process to the outsourcing supplier. Offshore outsourcing occurs when the supplier resides outside your borders.
• Offshore outsourcing does not cause a net job loss. In both the US and Canada, more IT jobs were created than lost by sending IT work offshore. The dot-com bomb caused greater IT losses than offshore outsourcing.
• American companies must consider offshore outsourcing to remain competitive.
• Offshoring is not bad for the economy. The costs savings lower inflation, increase productivity, and lower interest rates. This happy constellation of events “boosts” business and consumer spending.