Nearshore Outsourcing Customers Tell Peers: “Look Beyond the Surface”

By Patrick Haller

Jumping into a large project with an unproven Nearshore sourcing provider could prove to be fatal for buyers.  That’s according to two senior sourcing executives, from

AMD and Welch Allyn, who talked about their  successful engagement with Neoris, during last week’s Gartner Outsourcing Summit. Both executive made something crystal clear:  Nearshore is quite capable of out-performing farshore in higher-value outsourcing programs.

Eric W. Hunt, Executive Vice President and CIO, Welch Allyn, a privately owned medical supply manufacturer, and Peter Swartz, Corporate Vice President of IT for AMD, a manufacturer of computer chips, said it is important to identify internal personnel who will manage the vendor. They also stressed that it it is critical to start out with small projects to gauge performance. Vendor selection should not only include standard due diligence, but should also take into account the provider’s breadth in solution offerings, their understanding of the client’s long-term vision and strategic goals, and the ability to close skill gaps and fit into the corporate culture.

Comments were made during a panel discussion,  “Using Vendor Management and the Nearshore Delivery Model to Support Strategic Initiatives,” hosted by Douglas J. Gattuso, President, Neoris USA.

The Trust Factor

Building trust between a client and supplier can take a long time. Before it can become a true partnership, the relationship has to grow from –among other things– a base of respect, clarity and a shared desire to reach a successful completion. When Welch Allyn acquired another manufacturer, MD International, they were running a legacy system and needed to fully integrate it into the corporate network. Skill sets across Latin America were required in order to make the transition as seamless and efficient as possible.

“Neoris was in those locations and what was a Nearshore call became an onshore call,” explains Hunt. Another important aspect for Welch Allyn was having a provider who could help them understand the nuances of doing business in countries such as Mexico, Brazil and Colombia. Neoris, a global company with headquarters in Miami, FL, specializing in SAP and Application Outsourcing, has six global delivery centers, including Latin American offices in Argentina, Brazil, Chile, Colombia and Mexico. The company, explained Gattuso, created global teams to provide IT solutions within their particular region, delivering solutions to a spectrum of industries. This experience and presence assured Welch Allyn of Neoris’ ability to service them in the Latin American market.

The entire project took nine months from start to finish, and even though there were some issues along the way (as would be expected), the Project Manager “had a lot of passion” which helped to keep the process moving. As far as the creation of a sustainable strategy, Hunt said that “Doug and I have to be in alignment. We check-in with each other two times a year, then we have an annual Senior Executive check-in, and a bi-annual CEO check-in. These are for big picture discussions.” Gattuso added that the Neoris Account Manager, who works with a Project Manager, will “travel to the client sites, and touch base at least two times a month.” It is also possible that the Account Manager will “live” on site and be integrated into a client company.

Clear Expectations

A Statement of Work is executed so that each party is clear on the individual roles, and about the scope/scale of the project. “We have a set of core values and expect the team to fit culturally,” explained Hunt. The biggest mistake a vendor can make, he said, is “Complacency. In innovation, attitude, approach. Treat the customer relationship with respect; change and innovate.” An ideal client, Gattuso said, is one with “strategic intent, commitment to governance, involvement, consistent project management, a partnership mentality and a shared sense of urgency.”

Clients can also set unrealistic expectations, “When more than procurement is involved,” commented Gattuso, “they don’t understand and don’t have the experience. Our job is to try to manage them, set them up for success. Manage expectations at the front end.” A challenge for providers, observed Gattuso, is “that employee turnover is about 10% and demand has increased dramatically. Managing the bench [of staff] is key to success; manage the bench to the pipeline.”

Gattuso added that clients should ask about providers, “Can they do the work? Do I want to work with them? How do you work together?” part of the answer, according to Gattuso is “With demand increasing and resources less prevalent, look at their portfolio of services.” He also advises providers against doing “one-off” jobs. Neoris delivers to its US clients from Mexico and Argentina while “Brazil serves Brazil. We are building scale in a region where we are Tier 1 (the second largest in Latin America).”

Gattuso warns vendors against trying to be all, “You won’t win success if you are always saying yes. Play to your strengths. Don’t over sell / over promise. It is easier to ruin a reputation than it is to build it up again.”