While the Internet has allowed for a significant number of transactions to be pushed out to the customer in the fashion of “self-service”, many of these are so time consuming and frustrating a business opportunity is created. One of the most frustrating “self-service” transactions in my opinion is that of air travel. When I am using company money, it’s relatively easy as I simply log into my company travel website, select my travel dates, let it validate corporate policies, attempt to find the lowest fare and… I’m done. I just click “Purchase” because it’s not my money.
Now, let’s take the situation where you’re trying to book a ticket home for Christmas. You likely live at least two connections from home and the ticket of course is close to the average monthly rent for a two bedroom apartment. So, you begin the battle of trying multiple websites and forums to uncover the top-secret, super limited, “lowest fare”. Really, you have no idea if you found the lowest fare, but after spending multiple hours and having seen potentially tens if not hundreds of fare options, you give up assuming you’re close enough. Well, I’d like to propose the airlines just change their customer pricing practices and not be such __________. But, I don’t expect that to happen any time soon.
In the mean time, there is a significant opportunity to “outsource” this task to someone else. Given the price of labor in other markets, a company could setup a call center to accept travel requests, research them and provide the customer with the “lowest fare”. The idea would be to take the pain out of the transaction along with the wasted time. A customer would call up or text message the service and outline their travel constraints (e.g., optional dates, schedule, etc.). That would be it. They’d then wait for a call or email confirming an itinerary and it would be done. If there were follow-up questions due to similar options, the service provider would call the customer and ask which option they’d like to go with. The self-service web transaction would then simply be to setup your profile with frequent flyer numbers, credit cards, etc. This of course could also all be done over the phone if you just didn’t want to deal with it online.
It would be like your own personal assistant. Imagine the possibilities. Restaurant reservations, sports tickets…

As an outsourcing consultant working for Accenture, I am regularly presenting on “Why Accenture?”. However, today I was challenged with a new question from a client. Why China? As the IT outsourcing services industry continues to expand in both it’s offerings and locations, many companies are confused as to what locations they should leverage. It is important to keep in mind that location choice should be based on the project requirements. Everyone wants to minimize costs associated with IT. However, there are many more intangible costs outside of the standard hourly labor rates that can dramatically impact your projects success. For example, if you have a small project (~ 5-15 resources) that requires more significant real-time interaction over the course of a year, you will likely want to leverage an onshore or nearshore location. If you attempt to use an offshore location with these project requirements, you will likely find that the increased attrition (due to requirements of people to work grave yard shift) and telecommunications costs could outweigh the labor arbitrage. As the demand continues to rise exponentially, new markets become attractive for mitigating rising costs in the primary locations such as India. Having done some external research on the location topic, I’ve included my findings below for reference. Feel free to contact me directly if you have additional questions.
References:

• CIO Magazine | Offshore Map
• Ziff Davis CIO Insight | Top Spots For Global Outsourcing
• neoIT | Mapping Offshore markets update 2005
• Global Equations | Global Outsourcing Report 2005
• A.T. Kearney | 2004 Offshore Location Attractiveness Index
• Computerworld magazine | Knowledge Center – Outsourcing Special Report
• Sourcing Mag | Location Selection
• European Information Technology eXchange | Service buyers: Selecting the offshore location
• IAOP | Mapping Offshore Markets Update
• Carnegie Mellon University & Accenture | eSourcing Capability Model (eSCM)
• Accenture | Maximizing the Value of a Global Workforce

As outsourcing has exploded in the last couple of years both in practice and mind share, many CIO’s have more questions than answers. For example:

• What percentage of my IT organization should be outsourced?
• How can I cut costs out of my organization while still delivery new capabilities to the business?
• How can I consolidate the number of vendors I use today, and how many vendors should I work with?

As an outsourcing consultant, I grapple with this question every day. And every day, with each different client or application space, I come to different conclusions. It seems there is a lot of variability to the answer depending on a particular IT organizations process maturity, industry, country, technology platforms and availability of local talent. Yet, today as I was catching up on my reading of CIO magazine, which was discussing the next generation of IT, I challenged myself to come up with a “simple” answer. Below is my first attempt at designing the IT organization of the future, if I were the CIO. I’d enjoy getting any feedback you might have on this idea.

CIO
Responsible for overall IT strategy and operations. This role and supporting team would provide overall leadership and direction.
Architects & Program Management
Managing the needs of the business and the resource bandwidth would primarily be executed by the outsourcing partner that would bring deep program and project management experience. Continuous evaluation of the IT operations technology platforms and future design would then fall primarily on employee architects that would feel ownership of their companies direction and capabilities. The outsourcing partner would then supplement with technology specific architects as needed.
Business & Systems Analysts
Driving the next generation of IT will require more business focused IT workers identifying and designing new ways to do business and generate top-line growth. The outsourcing vendor would provide support in methodology and domain or application specific experts that could rotate in and out to bring industry best practices from other clients.
Developers, Testers and Support Operations
Majority of workforce can be managed more effectively and less costly by a vendor with centralized development centers. Entry level employees would work with the vendor initially to build foundational skills for future roles.