Forrester Research came out with a research piece this week, titled “Will your Offshore Provider Survive The Recession? that asks BPO clients to take a cold, hard look at the health of India-based providers.
The Forrester researcher, Sudin Apte, paints a pretty grim picture of the India BPO sector citing that major providers are ill-equipped to handle a perfect storm of diminished demand, picky clients wanting better deals and anti-outsourcing rhetoric from President Barack Obama.
The researcher says: “Indian providers’ limited preparedness to fight the recession poses a risk for clients. While in the short term sourcing professionals will find it attractive to obtain lower rates, vendor viability is challenged in the long run — putting project delivery and overall client work at risk.”
These are pretty strong words and have major implications for Nearshore providers and US customers. What can providers learn?
Lesson 1: Differentiate yourself and your brand. Part of the problem for many India providers is they are doing too much and have lost sight of their core specializations.
Lesson 2: Build credibility through service excellence. The outsourcing business is very much a long-term gain proposition. It remains essential that providers consider their delivery value through continuous engagement and committing to invest in competency areas.
Lesson 3: Be honest. Say No. Part of the advantage of working in the Nearshore region, is the sharing of similar cultures. For that reason, the Western Hemisphere is probably better known for its ability to be “professionally blunt” when necessary to get the point across. This is an advantage for providers who are working with clients who are used to receiving “push back.” Being tactfully frank when necessary is something that customers will respect you for.
Lesson 4: Offer new methods of engagement. This point – courtesy of Forrester – is important since providers need to demonstrate that they are innovating in the right areas and looking at ways to improve the delivery of service, through human capital efficiencies, technology improvements or other creative models.
Is the India outsource industry about to collapse? Absolutely not.
But when major research firms like Forrester talk about anticipating bankruptcies – it’s a wake up call I would pay attention to.
Forrester advice to US clients working in India: “Rather than wait for a provider to go bankrupt or be acquired and face work disruption, identifying early symptoms of risk can save a lot of pain.”