Nearshore Americas

Q/A: A New Group Fights for Transparency of Offshored Market Research

The global services outsourcing industry may have a  lot of things going for it, but in most cases the industry as a whole is not winning any awards for transparency. It is the view of Tom Anderson, who recently founded the Foundation for Transparency in Offshoring, that clients or buyers have a right to know where their business process (and more importantly IP) is being handled. OffshoringTransparencyHis group is particularly focused on the practice of offshoring market research.
We asked Tom recently about the reason he founded FTO and why transparency is such a big deal.
Why did you launch FTO?

I’ve had experience in offshoring market research services at different levels for a number of years both at large and small companies, in my own company as well as working with clients and suppliers who offshore. For years now I’ve felt there should be greater transparency in this area. However, it wasn’t before a friend who works in the market research offshoring business asked me to a debate related to offshoring at the Conference on Quality this year that I decided to actually do something about it. As part of the preparation for the event we conducted research among market research suppliers and clients and found that the majority agreed that greater transparency was needed related to offshoring.
Why do you think it’s so important for buyers to know if parts of a project are done offshore?
The EU has had laws in place to protect their citizens privacy for some time now. Unfortunately the US and other countries do not yet have anything like this in place. The FTO is a step in this direction. Depending on what country, type of project and data we are talking about there simply isn’t sufficient legal protection in place for either IP or data privacy.
Say a company like Cisco asks a well known research group like Gartner to conduct a survey and a report. In the process the client finds out that the work in being done, for example, in Mexico City and Bangalore. Who is supposed to help educate the client on the capabilities of the provider in those regions, and is it important for the client to differentiate one location from another?
It depends on what Cisco had in mind. FTO uses the commonly used definition of Offshoring as the movement of a business process done at a company in one country to the same or another company in a different country, usually due to a lower cost of operations in the new location.
Obviously, if Cisco approached Gartner, which is located here in Stamford, CT USA, with a request to understand the Mexican and Indian markets related to IT and Cisco used vendors in Mexico and Bangalore to conduct the fieldwork and local analysis, this would not be considered offshoring, and I doubt Cisco would have any issues with these local firms being used.
However, if Gartner was conducting a survey among Cisco’s own customer list, thus supplying Gartner with private information about their customers including name, email etc. and Gartner in turn sent this file to Bangalore, then we feel Cisco has a right to know.
From our research I would also guess that if the Cisco study involved say a new product test, they would also want to know this.
You have a self-certification program. Why is this important?
It’s simple and practical. A corporate officer can sign their organization up for FTO. It is modeled after the EU Safe Harbor site. By signing up a company is disclosing, and becoming more or less liable as the case may be.
Do you expect transparency to increase over time in the offshoring industry?
It depends. As you say the larger companies who have already invested heavily in their offshoring processes seem to want to keep it quiet. On the one hand they don’t mind mentioning it as a cost saver on finance calls. On the other hand they seem to be going out of their way to make sure it doesn’t get mentioned in front of clients.
If clients become more aware and require certification it will happen. However there are benefits elsewhere as well. If you ask an attorney or privacy officer of a company that offshores I think they would recommend that a company certify to give added legal protection if God forbid there was a security breach and information was lost.
I’m hoping Enron and the likes have taught us a few lessons about transparency.

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Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.