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Players in the sourcing industry

Sitting in a major software outsourcing conference in Beijing this week, I couldn't help but wonder about the players in the sourcing industry.
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Written by Michael Rehkopf on

Sitting in a major software outsourcing conference in Beijing this week, I couldn't help but wonder about the players in the sourcing industry. Some of the ways we often think about this topic include:

  • Major clients such as airlines, financial service companies
  • Major service providers such as Accenture, CapGemini, EDS, IBM, Infosys, TCS
  • Major advisors such as TPI (the company I work for)
  • Major offshore locations such as India, China, Eastern Europe

(The above are sample lists, and it is important to note that there are many other major players in each category.)

While it's clear that for an industry to grow, an entire ecosystem is necessary and that has continued demand from clients, ongoing profitable supply from service providers and advisors who help structure sustainable arrangements between clients and service providers, are these the real players in the sourcing industry?

Another way to think about this topic is in terms of the elements that actually create the conditions necessary for the industry to grow, including:

  • Business cost pressures
  • • Creates demand for wage arbitrage • Creates demand for cost variability/flexibility

  • Capacity/skill/expertise constraints
  • • Often expressed as quality/time to market needs • Company constraints create demand to work with others • Geographical constraints create demand to spread work across geographies

  • Infrastructure
  • • Improved communication infrastructure creates ability to work at a distance • Improved transportation infrastructure creates ability to visit remote sites

  • Legal frameworks
  • • Confidence in frameworks for areas such as intellectual property, privacy and security creates confidence in shifting work outside a company or outside a region

  • Language
  • • Increasing comfort of people with using multiple languages has allowed an English-based business language to develop without threatening a local language-based social language

And perhaps fundamental to all of the above is people, people who look for solutions to challenges in each of these elements.

Thinking in terms of such drivers can help the companies and individuals involved in the sourcing industry both understand current dynamics and plan for future possibilities.

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