Adjusting to the ‘new normal’, vendor management transformation in a post-recessionary environment, managing procurement vs. finance corporate showdowns and making sourcing relationships really work – these were just a few of the top level themes dominating the top flight S.I.G. event that just wrapped up yesterday in Savannah, Georgia.
Some key takeaways and insider news items that we picked up during the event:
China Meltdown: The Google-China clash of recent weeks, and other troubling signs of favoritism shown to domestic service providers and industry, are causing many to believe that the ‘open door’ policy of the last ten years is suddenly get slammed shut. On stage and in offline meetings, leading consulting firms and players in the market are quick to say that the political risk in China is something to take very seriously. It’s as if China has suddenly spiked on the risk scale and those with investments there need to take a hard look at diversification outside of the country. Even a China-based consultancy – which aims to play on the same field as IBM and Accenture one day – has representatives at the SIG event. When asked about the intensifying problems, the consultant said – “It’s all real.” By the way, Business Week has been doing a strong job covering this story and the implications for U.S. companies struggling to deal with the loss of access and eminence they once enjoyed.
MindTree Returns to the Nearshore: Insiders tell Nearshore Americas that India-based IT Solutions Provider MindTree which established a delivery center in Mexico in 2008, but quietly shut it down sometime after that – will be re-establishing a center in Mexico sometime in the second quarter of this year. The motivation to re-initiate a center is driven by the need to service a particular customer, sources said. MindTree spoke at the SIG event along with one of its customers, Avis Budget Group.
Third Generation Outsourcing Management: A lot of blood, sweat and anguish is generated out of customer-sourcing partner relationship to force both parties to get real about the need for better governance models. A fairly refreshing view on this is the concept of allowing a third-party to established better discipline around managing the relationship, keyed off things like installing better governance expertise, developing stronger processes, knowing how to scale up or down more flexibly and having the right technology in place, according to Claude Marais, partner and managing director at TPI.”You “you have to have your hands around all of these functions,” said Marais, who presented along with Sal Caruso, vice president information technology, at the SIG event. When Symantec hired EDS to take on some key IT functions, Caruso admits that Symantec had little knowledge of goverance and – as a result – hired TPI’s governance unit. “We knew from the outset we would have to do governance right in order to manage the relationship,” said Caruso, who relies on dashboards and other transparency-improving tools to strengthen the EDS engagement.
The Next SIG Summit: The Sourcing Interests Group Global Leadership conference is scheduled for Oct. 5-7 in Huntington Beach, Calif.