Jan 15, 2010

POLL: Does 100% offshoring make good business sense?

Does 100% Business Intelligence Offshoring make good business sense?
We are living in the Information Age. If we don't investment in the wealth of this age then we are divesting from success.
Just like land was wealth in the 1800's and industry in the 1900's, it is information that is the wealth of the 21st century.
If you make a mistake in a single order due to a bad judgment, it could cost your millions of dollars.
If your information is inaccurate you possibly make small  mistakes on a daily basis.
Companies do not fail due to one single colossal mistake, but due to the accumulation of a whole lot of small ones.
Just like your would not allow your heart surgeon to cut you with the lowest cost scalpel, do not give your crown jewels to the lowest cost supplier as the end results could be quite similar.

Background 1: Business Intelligence is an integral component of every business. When business can be conducted without reports BI will become redundant, until then BI is integral to business success.
Background 2: After the 1008 (October 2008) financial meltdown companies, executives and business owners have been thinking in a state of flux and distrust to conventional norms
Background 3: Some companies have considered 100% Offshoring of BI as a solutions

I've seen so many claims over the years that offshoring "works" and is cost effective, and yet in 30 years of experience working with Fortune 100's, 500's and numerous companies that have attempted this for mission critical projects I have yet to see a model that really does "work". The largest offshore firms, when being candid and honest, will fess up and acknowledge that it's virtually impossible to simply hand-off a complex IT project to a firm that is thousands of miles away, separated by space, timezone and culture, and expect the project to work well. The honest firms will tell you that it takes a serious partnership between the client and offshore provider that may take a few years to bear fruit. Companies like Morgan Stanley dealt with this by sending a sizable team of their own NYC staff to India to spearhead an offshore shop, so that they could bring the company's culture and management processes to this new location where labor is cheaper.
Jonathan Strong - COO, CIO
What I would consider to offshore is more generic functions like Business Content loading and some data extraction, but when it comes to modeling and reporting on specific customer needs offshoring is not an option.
De Villiers Botha, Johannesburg

Just think about the critical business decisions made every day within a typical organization. Many poor decisions are made when they lack timely and accurate information. For example the sales manager who tells a customer he can't service their critical need because he has incorrect inventory data. These types of mistakes can easily cost a company millions of dollars each year, more than enough to support a strong BI organization.
Steven Weiand  PM BI

From a strategy point of view these are almost rhetorical in my opinion...but what does upper management really want to control? Cost or quality
Reference points: Microsoft CRM/BI offshore vs. Dell- Domestic; Auto mfr in the maquiladora region who came back to U.S. due to quality issues; Chinese pet food....the list goes on. Good precursor is "Theory Z" by Ken Ouchi(?) written back in the 90s
Bill Morrison, PM Balboa

Bottom Line not a good idea at all. What you cannot solve 100 feet from your business folks with expensive resources, how do you plan to solve 10,000 miles away with the lowest costs resources

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