Business Technology: From Offshore Outsourcing To Global Competitiveness
Plenty of myths, half-truths, and misconceptions still swirl around the phenomenon of offshore outsourcing, so Optimize magazine will explore this idea next month with a special issue featuring subject-matter experts discussing how the larger idea is one of global competitiveness.
In the fast-paced and ever-changing world of offshore outsourcing, some entrepreneurs in Russia have launched an entirely new category for having others in another country do what used to be done at home: raise cash. As further proof that we live in a world without borders, we have organized-crime hackers from Russia launching denial-of-service cyberattacks on the Web sites of online gambling companies based in England so that ordinary civilians who want to wager a few pounds on the ponies can't connect to the sites to place their bets. As a result, the English bookies lose revenue, and lots of it--more than $70 million, according to Russian law-enforcement officials who helped terminate this cross-border relationship. In return, the British bookies became an offshore source for high-quality cash flow to the extortive Russian robbers, paying up to $50,000 per incident to get the attacks to stop so regular business could resume. The reports didn't indicate whether the deal was flat fee versus time and materials, or what the specifics of the SLAs were.
Back on the highly legitimate side of the offshore business, some data points to consider:
We're conducting a confidential survey about the advent and threat of cyberextortion against small and medium-sized businesses. We expect the survey to create immediately usable guidelines for organizations that may be at risk of extortion.
And in InformationWeek Research's latest Priorities survey of 300 business-technology managers, 24% said they were starting or increasing their offshore outsourcing, while 8% said they were taking back some functions that had been sent to other countries.
While these somewhat random points show only a skimpy pattern, it's our job to give you a richly detailed analysis of exactly how to succeed in the emergent game of global competitiveness. So we're devoting our entire September issue of Optimize (business strategy and execution for CIOs) to that subject, and the cornerstone of the issue will be a breakthrough feature from the University of Michigan's C.K. Prahalad and M.S. Krishnan called "Global Restructuring Of Industries And Businesses: The Search For Competitiveness," in which they explain how companies can make the transformation from organizations that make and sell to those that listen and respond, and ultimately to those that anticipate and lead. We'll also offer a debate between noted offshore-basher Lou Dobbs, who's used his bully pulpit to demonize the very thought of such activity, and Sunil Wadhwani, the thoughtful CEO of offshore-services company iGate Corp.; an analysis by strategy expert Michael Treacy on how to decide which IT activities to outsource this year, next year, and beyond; an overview of some of the very real risks associated with offshore outsourcing; a research model indicating that India's cost advantage could be cut by 50% or more in the next three years; a jobs- and career-oriented analysis by former U.S. Trade Representative Carla Hills; and much more. All of this extraordinary content will be available soon online at OptimizeMag.com, and in the meantime feel free to send comments or questions to Optimize editor-in-chief Brian Gillooly and executive editor Patty Brown.
Recent arrests have uncovered an intricate web of al Qaeda contacts in which the terror network's operational information flowed among three key points--Pakistan, Britain, and the United States. The arrests include a computer wizard in Pakistan, a man in Britain believed to be a key operative who was in New York in 2001 conducting reconnaissance, and a British suspect who allegedly sought to use U.S.-based Web sites for terrorist fund-raising.
And as always, we don't intend that the viewpoints and perspectives shared in this upcoming special issue will be the final words--rather, we hope they'll trigger ongoing discussions of these complex and rapidly evolving business practices. In addition, as the focal point of the discussion moves from these early stages in which the dominant theme has been the controversy of offshore outsourcing with all its attendant misperceptions and myths--including the canard about "Benedict Arnold" CEOs and companies from a presidential candidate--to one of global capabilities, sourcing, and competitiveness, we'll be able to get beyond some of the short-sighted distractions that have led to either bad decisions or delayed decisions. Because the real issue is how to thrive--not just survive--in a world where partnerships, customers, suppliers, talent, quality, innovation, and opportunities are no longer restricted by borders.
To discuss this column with other readers, please visit Bob Evans's forum on the Listening Post.
Join InformationWeek’s Lorna Garey and Mike Healey, president of Yeoman Technology Group, an engineering and research firm focused on maximizing technology investments, to discuss the right way to go digital.