Right Sourcing

By Greg Tilley, President, Infotech Enterprises America, Inc.

The decision process for sourcing IT, geospatial, and engineering services used to be easier. The only question that needed to be answered was "Where can I get the best value?" Value was measured simply as reliable quality and schedule compliance at the lowest available cost. If those conditions were met, ROI was achieved.

Executives today have to weigh additional factors in sourcing decisions, particularly for offshore locations. "Will my data security or intellectual property be compromised?" "Is the location of work politically stable and a reliable ally?" "Are there enough skilled resources to meet schedule constraints?" "Can I get internal buy in from line managers and unions?" "Will language / time barriers add risk to performance?"

The answer to these questions is 'right sourcing', meaning that the sourcing solution is customized to the project requirements and reflects the sensitivity of the project to cost, schedule, skill availability, and security risks. Each of these can be evaluated to determine whether the 'right sourcing' solution is onsite, onshore, near shore, offshore, or any combination (including the location independent options of remote access and cloud computing).

As a US company with a global parent and multiple delivery centers, Infotech has the capability to offer any or all of these options as the requirements dictate. We call this a 'global delivery model' and that flexibility allows us to advise our clients objectively without prejudice to a particular sourcing option. Based on that experience, we believe the following are the key considerations in sourcing decisions apart from the obvious cost / value equations.

Security: A major concern today is data security. Sourcing for projects requiring supplier access to sensitive or proprietary data must consider the risk of security breach. There is an implicit assumption that there will be less risk with an onshore supplier. In fact, the opposite is just as likely to be true. Remember that the 9/11 terrorists came to the US for flight training (probably because security screening for students is less rigorous here). Therefore, when security is a concern, the location of performance is not as important as the standards of care practiced by the supplier. Strict conformance with the highest international data security standards (ISO 27001) is a must. In a compliant organization; production floors are secure, workstations do not have internet access, USB ports or DVD writers, and there is strict enforcement of procedures governing data handling. Such security procedures are practiced in the top rank of offshore suppliers, but are rare in US firms except for a few secure facilities performing defense / intelligence work. Right sourcing suggests that you pick your supplier based on the level of security credentials rather than the location. For highly sensitive requirements, have a security audit of the facility performed by an independent security expert.

Communication: Some key questions need to be asked to determine if proximity to your location and domain experts is required. "Are the requirements well documented?" "Will the interaction between your domain experts and the supplier occur hourly, daily, weekly or 'once and done'?" "Is an SOW sufficient for knowledge transfer or is hands-on training required?" Right sourcing will often lead to a blended approach employing some combination of on-site, onshore, and offshore resources to meet your requirements with least risk of missed expectations. For example, at Infotech we typically assign a local expert to assist with requirements definition and project control even when a majority of the work is performed offshore. Regular interaction may also be required between the client and offshore team; therefore, the offshore technical managers must be good communicators and available at appropriate hours.

Resource Strength: A primary measure of project success is schedule compliance. Beyond cost considerations, it is often impossible to meet schedule on a large services engagement if constrained to local or even US labor. Projects requiring a large pool of skilled resources to be mobilized for a limited period will generally need to be performed offshore. For smaller teams or projects without steep ramp up requirements, the onshore or onsite engagements become practical, particularly where a high level of interaction with the client team is required.

Quality: Early pioneers of offshoring have experienced mixed results with respect to quality, causing some to associate offshoring with uncertain quality. Quality is not a function of location; it is a function of skills training, experience, adherence to processes, as well as having a state-of-the-art Quality Management System in place as per ISO 9001, ISO 27001, AS 9100 standards, and the CMMi Level 5 Quality Model. There are some offshore companies that deliver poor quality, just as there are some in the US. Even qualified firms, whether on or offshore, can slip on quality when they are not careful to follow best practices. The way to assure good quality is the same regardless of location; choose suppliers based on qualifications, define specifications accurately, monitor progress diligently, and measure acceptance objectively. Where acceptance testing requires local domain knowledge or access to client's systems, right sourcing may involve deployment of a suppliers QA team on the client site to validate quality and provide feedback to the production team.

Buy In: Any outsourcing, whether onshore or offshore, may be viewed internally as a threat to job security, and unions in particular may resist any displacement of work to an offshore location. While managers are not necessarily compelled to achieve buy in on an outsourcing plan, it can make the execution go more smoothly when there is some consensus that the organization is strengthened by the action. The key to buy in is conveying that an outsourcing strategy strengthens the organization and offers the opportunity to expand higher value functions. Right sourcing helps this message because it means that the decision on the location(s) of work has undergone a careful review and the company has made informed judgments in everyone's best interest.

In summary, right sourcing means getting past the emotional response to outsourcing and offshoring, and instead conducting a reasoned assessment of how the organization can best meet its operational requirements and schedule constraints while insuring that quality and security are maintained regardless of where the work is performed. 

About the Author

Greg Tilley is President of Infotech Enterprises America, Inc., a California Corporation with $70+M in revenue and 400+ employees. He has over 36 years of experience in business management, GIS, remote sensing, and environmental planning. Prior to joining Infotech, Mr. Tilley founded and managed a company called VARGIS, which pioneered the commercialization of aerial imagery at least 10 years before Google Earth and MS Virtual Earth were conceived. Mr. Tilley remains active in the geospatial services arena with memberships in the Management Association for Private Photogrammetric Surveyors (MAPPS), Geospatial Information and Technology Association (GITA) and National States Geographic Information Council (NSGIC). NSGIC awarded Mr. Tilley an Outstanding Service Award and he has received formal recognition for his contribution to GIS in the States of Maryland, Virginia, and Texas. Mr. Tilley holds an MA in Geography from Michigan State University.

About Infotech Enterprises

Founded in 1991, Infotech Enterprises is a Global IT services and solutions provider specializing in Geographic Information Services (GIS), Engineering Services, and IT Services. Infotech currently employs over 7,800 software, engineering, and mapping resources across 26 global locations including 8 development facilities covering North America, Europe, and Asia Pacific regions. Infotech has a distinctive business model: "global services, local responsibility. We operate and manage 'Centers of Excellence' for some of the most recognized global names in the telecommunications, utilities, government, transportation, and mapping industries.

Infotech is recognized as a leading GIS services provider offering end to end geospatial services and solutions to various industries and governments globally. Our strong domain and technical expertise in chosen markets; reliable, scalable and cost effective service offerings; quality & information security systems in conformance to best industry benchmarks; and a global delivery model enables us to help our customers reduce costs, improve time to market, and optimize resources; thereby creating a business impact.

Infotech is a SEI CMMi Level 5 company and is also certified to ISO 9001:2000, AS 9100, and ISO 27001 standards.