Monday, January 26, 2009

Why I started this Blog

As you have likely figured out, I started this blog to initiate a discussion around offshoring issues. While I have long been interested in the issue, the immediate catalyst was the publication of my book The Services Shift,

How did I get interested in offshoring of service activities?

I had been to India several times early in my career, but generally focused on traditional strategy topics, like market entry, establishing and managing distribution channels, etc. In the late 1990s, I became fascinated by the Indian software industry (“high tech in a low-income country!!) which, at that point, had grown its exports by around 50% per year for over a decade—while maintaining 30% + operating margins. I really thought this was something special—a developing country exporting brainpower rather than minerals or manufactured goods.

I started working on a case about how the industry developed and the challenges it faced at the turn of the millennium, as viewed through the experience of Tata Consultancy Services. What amazed me was, when I got there, pretty much everyone said something like “well, software is a pretty good business, but it’s not that interesting. What we’re really excited about is IT-enabled services” (which later came to be known as Business Process Outsourcing or BPO). I figured that, if they thought the business was that much better than software, it must really be something.

This led to a major effort to understand and document the services offshoring phenomenon over the next few years. Most of this effort was aimed at my advisory and teaching work. As I gave presentations to business groups and alumni gatherings, I realized that managers—even sophisticated managers—were struggling with what this all meant. They knew something important was going on, but they were groping for a framework that would help them understand it on their own.

This book is aimed at those managers.

I wrote the book primarily for three groups of people, although anyone could learn from it:

1) Middle and senior managers/executives in large firms. These people know something important is happening, but don’t have a framework for understanding the opportunities and risks created.

2) Entrepreneurs. The offshoring trend creates tremendous opportunities for value creation. The book provides a framework and sketches the landscape of what is happening and where we are going. I believe that entrepreneurs will find it to be a useful guide.

3) Managers in the offshoring sector. Those in the industry often take a defensive posture. While the topic is controversial, it is also inevitable. I hope to provide a perspective that allows them to understand the value they are creating and to speak openly and candidly against the (sometimes) hysterical political posturing that occurs every time we have an election.

Future posts will provide an overview of the book which is organized into 8 sections.

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