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Posted by Gene Cao on February 18, 2013
Over the past three years, multinational companies’ (MNCs’) approach to outsourcing in China has steadily matured as they seek to leverage broader outsourcing models and source from a combination of global providers and local Chinese providers.
In my latest report, Lessons Learned From Outsourcing In China: Part 2, I analyze the key outsourcing trends and approaches to help sourcing and vendor management (SVM) professionals at MNCs select the right local outsourcing suppliers. As part of this analysis, I’ve highlighted the main service capabilities of local Chinese vendors broken down by service model and profile the different types of service providers that currently operate in China.
Key findings from the report include:
So what should you do to take advantage of the increasingly broad range of viable outsourcing providers in China? Firstly, to move away from a pure global service provider approach, SVM professionals at MNCs must seriously evaluate local providers’ general technical background, service quality, existing credentials, and industry reputation.
As part of our research, we’ve identified a few key evaluation criteria that can help SVM professionals better engage with local vendors. At the top of the list is ensuring that senior executives be engaged in the outsourcing deal’s governance.
Verify that executives of local outsourcing vendors will be involved throughout the outsourcing deal, from the initial proof of concept to service fulfillment. Ensure that outsourcing providers can effectively collaborate with the MNC’s local IT and business operations teams.
It’s difficult for SVM professionals at MNCs to change their behavior overnight, but I believe incremental change is well underway in China.
Your own experiences and ideas are always appreciated. I’d love to hear from you.
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