Whose Offshore Nation Is It, Anyway?

The Offshore Nation: Strategies For Success in Global Outsourcing and Offshoring by Atul and Avinash Vashisshtha (New York: McGraw Hill:
New York, 2006) 

The Offshore Nation dwells on the current premise of a world of buyers and sellers of services, all linked by a desire for higher productivity and lower costs and matching supply with demand. Written by Atul Vashishtha and Avinash Vashishtha, co-founders of the leading offshore advisory firm neoIT, the book tries to explore the mega-trend of services globalization as a tool to leverage the competitive advantage available from jumping on the outsourcing bandwagon.

 

The globalization of services is not synonymous with offshore outsourcing; it is rather a prodigy of the 24 hour business cycle. Being in different time zones was considered as a disadvantage just a few years ago, but thanks to the revolution in information technology in the years leading up to and following Y2K, the establishment of offshoring bases is not just cost effective but is also a viable means to reach out to a scattered customer base.

The trend of outsourcing is causing a threat to mature European and American economies as more and more white-collar high skill jobs move to the offshore destinations. The authors think that the backlash is actually a positive progression for economies like the
US which can now focus on providing more value-added services to the client while offshoring the basic and non-core functions overseas.

The authors set up the book more like a “how-to” manual than a gripping story filled with colorful examples from the high-profile world of offshore outsourcing foul-ups and success stories. Methodically, the book moves from section to section, with each chapter ending with a pithy summary of “key points” for the reader to take away. The six sections of The Offshore Nation are:

• The Rise of Offshore Outsourcing: Borderless Services
• The Knowledge of Offshore Outsourcing: Preparation Meets
  Opportunity
• The Planning of the Offshore Journey: The Offshore Road Map
• The Sourcing and/or Building of the Offshore Presence: Ground Zero
• The Managing of the Offshore Presence: The Governance Structure
• The Future of Offshore Nations and Organizations

The book promises insight from various vantage points, but often delivered “Cliff Notes” versions of analysis this reader could have seen exploited over dozens of pages reduced to a page or two. The 19^th of 20 chapters entitled “An Economic Perspective” spends a scant 3 pages on the findings of the 2004 Information Technology Association of America (ITAA)/Global Insight study on the real impact of offshore outsourcing on the US economy, and presents the findings as unchallenged facts, with no mentions of the anti-globalization movement and related studies which contradict the bullish onshore picture offered by ITAA. In addition, the dearth of case studies also inhibits the book’s charm and readability, as the chapters flow too formulaically from checklist to neoIT methodology/solution to summary.

The two highlights of The Offshore Nation came in the middle of the book, where neoIT’s analysis of 10 different low-cost countries’ capabilities to handle ITO and BPO offshoring from the US and Europe across 10 categories with rankings of “high, medium & low” really gave the reader an apples-to-apples comparison of the competitive landscape of the so-called “offshore nations.” The second was in chapter 5, where the authors debunked the 10 myths of service globalization:

• Services globalization adds risk to an organization
• Offshore suppliers use “slave labor”
• Poor infrastructure at offshore centers
• You lose control when you offshore, often to people and companies in far-away lands
• Offshoring means lower quality
• Only large companies offshore
• All offshore suppliers are the same
• Services globalization will always save you money
• Offshoring is a flash in the pan
• Offshoring is bad for the US economy

For readers whose own maturity and understanding of the offshoring phenomenon is where the overall market was in 2001, The Offshore Nation is a perfect fit. For the rest of us involved in the industry who have some experience with global distributed delivery of IT and business process services, neoIT’s founders come up a bit short with their hyperbolic conclusion at the end of  the book: “The Offshore Nation is here. Globalize!”