On The Road To Diverse Parts Of The World - AKA Alternative Offshore Locations

I completed my Global Entry application earlier this week (www.globalentry.gov). They appeal to international travelers by promising the ability "to get on their way quickly and easily by using automated kiosks." The idea of an expedited process is very appealing. I've found that it's very hard for those customs officials to believe that you've been in a country or set of countries for 5 days and you didn't buy anything. Obviously they don't know the life of an analyst. I barely had time to eat and sleep; when would I have gone shopping?!? I get tired of having to explain that to these guys.

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Vendor Management And Procurement - A Marriage Made In Heaven Or Somewhere Further Down South?

I'm a Forrester analyst, but lately I've been feeling more like a marriage counselor.  Not that I mind that role; you get to hear all sorts of juicy gossip and sordid tales of woe. But I didn't anticipate it in my job at Forrester. I've spent many 30-minute counseling sessions (inquiries) listening to Vendor Management dudes (professionals) complaining about their Procurement spouses (colleagues) and vice versa. It appears that both parties are approaching married life (work) from two different sides of the bed. It feels like this arranged marriage is doomed to fail. But enough with the marriage analogy; this is a serious issue that seems to be pretty prevalent in the corporate world today. 

So what are the major areas of disconnect? 

  1. Procurement is goaled to save the company money and mitigate contractual risk. They can best do that by dissecting contracts that are coming up for renewal. They look for opportunities to reduce billable and fixed rates, maintenance costs, and license fees. They also review potential new vendor relationships and ensure that the lowest-cost provider is strongly considered. They act as the fiduciary agents of the company to ensure that the best price is negotiated for services or products the company wants to purchase. In partnership with general council, they also ensure that the T&Cs (terms and conditions) in the contract are appropriate and protect the interests of the company.
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MindTree Is Making The Right Steps To Evolve

Yesterday, MindTree and their executive team came to Boston.  The event had the typical flavor at first, but what we very quickly heard was that KK’s (CEO, Krishnakumar Natarajan) strategic view sounded remarkably similar to what Forrester has recently been advocating - traditional IT services vendors must evolve to compete in the next decade of tech market changes. Though it would be presumptuous to say we saw the evolving offshore vendor dynamic first, Forrester recognized the same trends and client demands that KK and his colleagues presented.  In the end, it looks as though MindTree has made demonstrable strides in three keys areas, which border on proof rather than simple marketing-white-wash, to attest to their evolution:

  1.  Client-centricity:  Every IT Services firm will claim a paramount focus on clients.  MindTree is one of the few who have told us (with some specifics) that they have actively wound down some outlying clients, in an attempt to re-double their efforts where they have a shared culture and a strong potential for future growth.  We heard directly from a client that this will likely result in a move to managed outcomes.  So there it is:  work so tightly with a preferred vendor that the trust necessary for a managed services relationship is not only logical – it’s inevitable.
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The Combination Of iGate And Patni Will Be Synergistic -- How Will It Impact Their Clients?

"iGATE Corporation (NASDAQ: IGTE), the first Business Outcomes based integrated technology and operations company, today announced that its subsidiaries have executed definitive agreements to acquire a majority stake in Patni Computer Systems Ltd. (NSE: PATNI, NYSE: PTI), the Mumbai-based IT services and BPO company. The transaction is valued at approximately $1.22 billion, including the mandatory open offer to the public shareholders of Patni. The transaction is expected to be completed in the first half of 2011. iGATE expects the transaction to be accretive by 2012 on a cash earnings per share basis. "

-- Excerpt from iGate press release, January 10, 2011

Now that the acquisition has been announced, it is expected that current Patni customers will be cautious and concerned, but it would be unwise to assume that they are ready to switch vendors. The reality is, application development and maintenance (ADM) transitions are not easy, they have the potential to cause a lot of disruption, and are more likely to impact the client’s end customers. In addition, client current priorities are focused on new technologies and keeping pace with their industries.  If they are happy with their existing relationship they won’t divert the attention needed to switch out the vendor due to an acquisition.  Besides, acquisitions in the tech space are more common these days. Our research shows that Sourcing & Vendor Management Professionals are better prepared to articulate their concerns and expectations to the acquiring firms.  They are less likely to switch vendors today, due to an acquisition, than they were 5-7 years ago. 

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Change Is Good!

I can't believe that I've been with Forrester for three weeks.  I am still learning cool new things every day but also feeling more at home as each day passes.  I've been very fortunate to have already had many interactions with so many sourcing and vendor management professionals.  I've really enjoyed getting to know so many of you and I'm totally psyched about all the questions you are asking and the things you want to talk about.  Keep them coming!  And speaking about psyched, I'm a huge fan of the TV show "Psych."  Shawn and Gus are the best!  Thank heavens for the invention of the DVR and the ability to watch the episodes I missed, all at once.  But I digress . . .

Despite being so psyched, I also have to deal with a lot of changes in my life:  leaving my previous company after nearly 28 years; moving from an office in downtown Minneapolis to a home office out in the suburbs; traveling more than working from home; working with a new team and meeting many new colleagues; switching to an iPhone after using a Blackberry for over 8 years; learning a whole new set of company applications, benefits, policies, procedures, tools and templates; and becoming a writer and a researcher.  But I'm still psyched.

Amidst all of this change, some key things in my life remain the same.  I’m still focused on offshore outsourcing, global delivery, and vendor management. These key areas of concentration have been my passion for the past 11+ years.  The thought of being able to focus on these areas full time is very exciting.  I’m so anxious to work with all of our clients.  I was in your shoes, I know what you are going through, and I know that I have a lot I can share with you and your company.

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