The outsourcing industry will likely emerge as a force to reckon with since all state-level political decisions in their true sense are based on their financial viability and it is unlikely that any government will establish an agenda that jeopardizes economic interests. Global businesses view outsourcing as part of their overall business strategy and measures to curb this trend can drastically affect bottom lines. For global businesses, the need to achieve core competencies, reduce and eliminate costs and achieve economies of scale will continue to drive the growth of the outsourcing industry.

1. PULSE
CONTRIBUTORS
november/december 2012 issue: 02
PUBLISHER
IAOP
Debi Hamill, CEO
EDITOR-IN-CHIEF
Sandy Frinton
sandy.frinton@iaop.org
MANAGING EDITOR
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PULSE BLOG EDITOR
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kate.hammond@iaop.org
MANAGING DIRECTOR
Kim Maneeley
kim.maneeley@iaop.org
CREATIVE DIRECTOR
Pamela Zarrella
EDITORIAL BOARD
Michael F. Corbett, Chairman, IAOP
Matthew P. Shocklee,COP, Managing Director
& Global Ambassador, IAOP
John Hindle, Outsourcing Marketing, Accenture
Neil Hirshman, COP, Partner, Kirkland & Ellis
Eugene Kublanov, COP, Managing Director, KPMG
Pradip Khemani, Director, Blue Shield of California
Cara Koppenhoefer, Manager, Humana
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accuracyofthecontentsoranyopinionsexpressedherein.
LUCY HERLAAR Trainer of people and
pets. A consultant, trainer and coach
on the human side of outsourcing,
she lives in Belgium where she
also trains dogs.
Tue Goldschmieding Anattorneyat
GorrissenFederspiellawfirmin Denmark
specializinginIPandtechnology.Asanew
father, he can be found up late at night
reading contracts or changing diapers.
Ole Horsfeldt Apartnerandvice
presidentofIP&technologyatGorrissen
Federspiel,whoparticipatesintriathlons,
and marathons when he isn’t working
on complex IT contracts in outsourcing.
Nilanjan Chaudhuri Anengineer
who heads global marketing for Aditya
Birla Group, he appreciates the role his
generationplaysincreatingtoday’stech-
nologyandenjoysreadingandwriting.
Kulwinder Singh Speaker and
writer on market messaging and
branding. A member of the advisory
board of CMO Council India,
he enjoys football and badminton.
Jørn W. Rasmussen Brings real-life
experience to writing outsourcing
contracts. When he’s not busy influencing
the Danish outsourcing industry,
he enjoys collecting different artifacts.

2. By: Kulwinder Singh
PoliticalTurns & NewChallengesareComing
Withtheoutsourcingindustryregistering robust
performanceyearafteryear,will it continue to
flourishinviewoftheprofoundchangesinthe
business&politicalecosystemitoperatesin?
12 PULSE November/December 2012
©CanStockPhotoInc./patrimonio

3. Outsourcing in its New Avatar
The outsourcing industry will likely emerge as a force to
reckon with since all state-level political decisions in their
true sense are based on their financial viability and it is
unlikely that any government will establish an agenda that
jeopardizes economic interests.
Global businesses view outsourcing as part of their overall
business strategy and measures to curb this trend can drasti-
cally affect bottom lines. For global businesses, the need to
achieve core competencies, reduce and eliminate costs and
achieve economies of scale will continue to drive the growth
of the outsourcing industry.
Certainly, there will be new challenges.
For example, the recent trend of near-
shoring will put pressure on Asian leaders
to develop new business/engagement models.
Several global businesses in the U.S. have
already started allocating work to nearshore
locations such as Mexico and Guatemala and
others may follow suit.
Toovercomethischallenge,globalITandITeS
(Information Technology Enabled Services)
firms can set up their branches in these locations and utilize
their experience and expertise to deliver better results than
local operators.
Another option is to move up the value-chain by supporting
and enabling business transactions and specializing in other
areas of non-core business operations. Providers can focus
on knowledge intense work of large banks, pharmaceutical
companies and consultancies, since some irreplaceable
advantages exist in this context, such as ready availability
of doctors, lawyers, chartered accountants, designers, etc.
For IT firms, the shift to a product-based business model will
enable improved outcomes.
Another important aspect that needs to be considered in the
near term is to distribute revenue sources geographically to
counter the possibility of economic downturn in a specific
area. The old adage of “not placing all your eggs in the same
basket” will become increasingly relevant in the next decade.
Currently, a major percentage of IT/ITeS firms depend on
U.S. based firms for contracts, something that needs to be
changed by increasing focus on other geographies such as
European countries and Asian economic powerhouses like
Japan and China. Already, some firms have started using
China as a resource base and a delivery location to service
their clients in U.S. and Europe, and some others have
formed joint ventures.
On a broader scale, the concept of preferred outsourc-
ing destination will cease to exist with use of automated
systems and technology advancements.
New entrants and established players
will have to strive just as hard to get new
contracts. Also, soft skills will become just
as important as technical skills, as global
businesses start to allocate more of their
mission-critical businesses and processes
to offshore destinations.
More research and development projects
will be given out, something that will begin
replacing the conventional “work-as-
per-instructions” model. Corrections in pay-packages
are also imminent; executives in the new ecosystem will
have more or less the same salaries, irrespective of their
geographical location.
For outsourcing firms, the message is clearly to adapt to
evolving market conditions. As Charles Darwin rightly said,
“It is not the strongest of the species that survives, nor the
most intelligent that survives. It is the one that is the most
adaptable to change.”
It simply means that to move to the next level, outsourcing
firmswillhavetobesmartandagile,andreadthemarket right,
as the global outsourcing industry transitions to the next era.
Kulwinder Singh As Director of Global Marketing and Communication,
Kulwinder is responsible for Synechron’s corporate brand and integrated
marketing efforts worldwide. Prior to joining Synechron in June 2012, he
served as Business Head at Scribble Media and Entertainment Pvt Limited.
FastCompany
As Charles Darwin
rightly said,“It is not
the strongest of the
species that survives,
nor the most intelligent
that survives.It is the
one that is the most
adaptable to change.”
PULSE November/December 2012 13