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Contents 
Introduction
Profitability plus
Improving on multinationals
Niche skills on tap
The local touch
In defence of multinationals
Executive summary |
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Another way local service providers succeed is by having talent ready to go, taking advantage of the fact that while giant offshore companies may have expertise, it is not always available on tap.
Craig Errey is the managing director of PTG, a company specialising in user interface design. He says his area of the industry is problematic. "The entire discipline of the UI design or interaction design suffers from a big problem in that there is a magic black box of activities that happens between requirement and design," he says.
PTG has developed its own methodologies to address this gap and finds they are greatly appreciated not only by local customers but also by multinational services companies who may possess the same skills but cannot always deploy them in a hurry.
"Companies like IBM have used us locally," he says. "It is good that they have capability, but big companies can have the capability offshore and it can be more expensive."
"I won't cast doubt on their capabilities," he adds, "But local businesses need to ask if multinationals' specialists are as accessible as those from a local company."
Errey also wonders if bigger really means better. "It is true that the large companies have lots of resources, but whoever you use, if you go through the right design process the success could be the same," he says.
That success could also come from using multi-sourcing strategies, the practice of picking specialists to perform individual services and one Errey is keen to point out remains available even when working with an organisation of PTG's size. "We can get the UI requirements right for a project, and then send the actual development work offshore," he says. "One of the problems that causes things to go wrong offshore is that the programmers can't fill in the gaps in a specification." By keeping some work local Errey believes the final results are of a higher quality.
Strategy wins in the end
While working with local firms makes sense for the many reasons outlined above, Gartner's Jester warns that shopping locally for the sake of it is not a sound strategy.
"You need to go back to basics and think through your sourcing strategy," he says. "To do that, you need a deep understanding of a business strategy so you can determine what you want to do as a business, what are the core processes that and then go about deciding how to source them."
"You can do that by creating an inventory of your capabilities, projecting what they will become and then defining how you make decisions in your organisation.
"A federal government department and a hospital will have different priorities, value systems, criteria and business drivers," all of which help identify potential service providers. "Then it comes down to cultural fit," Jester says. "It comes down to comfort and cultural values and their strategies: who do they hire, why do they hire them, what size are they compared to us and is it a match for your business."
