Visa-less offshore development?

Paypal founder backs Blueseed "visa-free entrepreneurship and tech incubator" (link)

Nation states require visas, employer sponsorship, and other impositions such as taxation and juridical regimes. All of these are obstacles to free movement of people, trade, and industry.

On the topic of national identity and nation states Einstein stated
"I am by heritage a Jew, by citizenship a Swiss , and by makeup a human being, and only a human being, without any special attachment to any state or national entity whatsoever" (link)

Comment on Peter Thiel's (Paypal co-founder) commitment to supporting Blueseed's floating "Googleplex of the Sea". Who gains? Who loses?

Global Pulse, who benefits?

Who benefits from data Philanthropy? Individuals, organisations and corporations have long dreamed of the free availability of social data. We now imagine that Orwellian vision to be so much closer by accessing messages in social networks, text messages, blogs, micro-blogs and other emerging social exchanges. Worthy causes break down our reluctance to give up or give over something we may have never appreciated fully. But who benefits?

“something is happening that is evident in the digital smoke signals... This is computational behavioral economics,” he said. “We’re part of a whole new science here.”

Robert Kirkpatrick, director of Global Pulse (quoted in Lohr, 2011)

References and further reading
Global Pulse: Harnessing innovation to protect the vulnerable. Website (link)
Steve Lohr, pSR1 The New York Times. December 18, 2011. (link, may require registration and/or fee)

You can outsource the work; you can't outsource the risk

RT @mrkwpalmer: "You can outsource the work; you can't outsource the risk" @BBGLINK #BBTech Raj Samani, McAfee #security

Does location matter?

Innovation, startup, silicon valley or fen or bog whatever. Does location matter if you intend to start a new venture?

The FT ran a piece in 2005 investigating the phenomenon of Cambridge startup success; "The Fertile Soil of Silicon Fen". The argument goes that Cambridge's close social circles and the willingness of entrepreneurs to try again and again, priming new ventures with prior experience and capital while also drawing on the fertile imaginations and academic excellence of the University's graduate output.

In spite of the small scale of firms spawned under Cambridge's influence, profiting from early success undoubtedly worked, the next question was always going to be "can a Cambridge startup achieve global success?" Well apparently that question is answered in the affirmative, albeit by firms that aren't quite household names but are nonetheless well known in their respective fields. The Cambridge Startup Report "From the lab to the limelight" looks at recent history surrounding Cambridge. Previously Cambridge innovation stories were characterised by early stage sales, meaning few firms attempted to grow and achieve scale success; now it seems that has changed with the four+ biggest Cambridge startup stories displaying longevity, ability to grow beyond the initial concept product and the capability to scale.

So a question: What would a 'Dublin Startup Report' have to say?

References

Maija Pesola. The Fertile Soil of Silicon Fen, The Financial Times, 2005 (link)
The Cambridge Startup Report "From the lab to the limelight" (link)

Accenture report on managing a global workforce

HR capability is perceived to be a crucial input into whether a multinational organisation is able to manage a global workforce or not. Global presence and global expansion necessitate the extension of a firm's workforce into regions beyond those that were responsible for its origin. Expansion may be an outward pushing into new markets or it may arise through acquisition or disparate national organisations and businesses. Zynga for example has grown into a multinational firm by virtue of its acquisition strategy, buying smaller games developers from Sao Paulo to Tokyo to Boston, London and beyond.

This report from Accenture highlights the remarkable growth of business taking place in emerging economies; what might have previously be considered the 'developing world'. This change implies another change, a change in employee's perception of corporate culture and prior assumptions that culture reflected the national character of the parent company. Corporate culture is increasingly being seen as cosmopolitan, global, international, not necessarily an extension of a central value system or language of the parent. HR is posited as a force for standarisation, a system for enforcing unity in so far as the corporate entity is constituted through policy, procedure, terminology etc. HR is also posed as the corporate function best placed to encounter, interpret and implement compliance with local regulation while at the same time as it translates between and among the global 'locals' of national offices within the international firm. In this sense HR becomes a shared service, a global function that services the 'local' wherever it is.

Reference
Gartside et al, (2011), Different strokes: How to manage a global workforce, Accenture. (link)
Commentary from Silicon Republic, July 19 2011 (link)

Why the Irish are the business.

Robert Short from RTÉ interviews Bono after the Global Ireland Economic Forum concluded. He asks about Bono's perspective on Ireland as a place to live and a place to work, considering the character of Irish people, their fighting spirit, self belief, and what he suggests is an openness to thinking different.



Robert Short recalls Bono's earlier reflection on ideas around anarchic mind, Bono replied...

"That really is the key to the digital age..."

"To write code, to write software, to crack the problems of the digital age, you have to think different!"

"In the information revolution, thinking different, smartness; India particularly there are some amazingly brilliant software writers - Ireland this is who we are... That anarchic spirit, it's actually, that's what makes us good at the future."

"We live on a small rock in the North Atlantic Ocean, it is pissing rain here, a lot! We have to be very smart about how we bring people, to want to work here and live here."

"And then think it's other things. It is culture, it's, you know, walking around Temple Bar and there's something in the air."

Bono (Paul Hewson)

---

And consider this short promotional video from IBEC, the Irish Business and Employers Confederation, on why Ireland is a good place to do business and to be a base for business with the rest of the world. Naturally IBEC has its own take on the financial crisis, Ireland's position in the world, and the kinds of values we should hold, however it does present a compelling view on 'why Ireland'.



(for more on IBEC see ibec.ie)

Sourcing shift: Polycentric Innovation

Link below to a HBR Blog article on Indian firms shifting to "polycentric" strategy?
Is polycentric just another word for outsourcing or is it code for multi-national? In this case the authors (Navi Radjou, Jaideep Prabhu, Prasad Kaipa, Simone Ahuja) trail the idea that it's a battle between Western and Eastern multi-nationals; a non-conflict or not?
blogs.hbr.org

FT special report on outsourcing issues.

(FT login required to read these articles, access limited to 10 articles per month)
Outsourcing enables IT companies to increase flexibility, harness new skills and cut costs.

Outsourcing: The business model that keeps on giving.

Model that works even in turbulent times
Paul Taylor introduces a focus on outsourcing – used for flexibility, to harness new skills and cut costs.

Security: Internet is industry Achilles heel
There is confusion between cloud computing providers and clients about who is responsible for security, says Maija Palmer.

Industry trends: Standardisation is the way to save
Providers look for work that is scalable and repeatable. They avoid complexity and systems that need customising, discovers Jane Bird.

Business case: First, ask 'why are we doing this?'
Only well run IT functions should be delegated, finds Charles Batchelor.

Service location: Governments vie for work in offshoring beauty parade
The leaders of large outsourcing companies are shopping for locations in a buyer's market, says Jessica Twentyman.

150 new jobs at SouthWestern. Focus on BPO

SouthWestern to invest €3.5m in R& D with Enterprise Ireland Support (links).

SouthWestern has bases in Ireland and Poland. HQ is located at the West Cork Business & Technology Park, Clonakilty, Co. Cork. Service offerings surround Customer Relationship Management, Finance & HR, Public Sector and Financial Services. (more info)

A study of Apple and Google mobile phone application developers

Following on from a recent CITO seminar at UCD presented by Prof. Debra Howcroft, based on a study by Birgitta Bergvall-Kåreborn (event notice link).

http://media.falf.se/2011/05/Bergvall-m-fl.pdf

An important study into a nascent industry sector. Of particular interest is the pull towards casualisation of the work of software production, driven in part no doubt from the lower economic rewards (drive down in software price) of mobile apps. The growth of apps as an industry sector is notionally built on the idea that apps may become components of a service, a service that someone will pay for, either the customer for the good or another say for marketing/ad-ware etc that seeks to access the producer's customers. The economics is of course one aspect; the personal and social impact is another important facet and is ultimately the main the focus of this paper.

Outsourcing expansion from Ireland

I.T. Alliance invests €750,000 in cloud infrastructure: http://www.siliconrepublic.com/strategy/item/21765-i-t-alliance-invests-750/


Major growth in IT outsourcing predicted (Joe Peppard produced report...)
http://www.siliconrepublic.com/business/item/22042-major-growth-in-it-outsourc

Gilt Groupe Establishes International HQ in Ireland... will locate its International HQ and Software Development Centre in Dublin. Its Customer Support Centre will be operational in Limerick by September.
http://www.gilt.com/careers/tech/category/ireland/about-ireland/

A Patent on the Outsourcing Process for Maintenance? You Cannot Be Serious!

Have a look at this and make up your own mind. Seriously, is this an innovation? Is it non-obvious? Is it an invention? Is there no prior art?

www.google.com/patents

And don't ignore China

And if anyone thought I'd been ignoring China in the cases and theory sessions, believe me, China is to be reckoned with. China is not India, it is very very different, and the Sparkfun blog illustrates for me how and why. China is all about things, hardware and manufacture. It reminds me of my impressions of Japan in the 90's, the clustering and volumes of business in Denki-Towns in Osaka and Tokyo and anywhere else (trans. Electric town: a commercial area dedicated to electronics and high tech, e.g. Akihabara, Tokyo)

Anyway, read Nate's Return to Shenzhen to get a feel for what it's like.
http://www.sparkfun.com/2

Shared Services Discussion - ServiceFrame

Class discussion with Daniel Berman. 12/April/2011

Daniel Berman is a founder and Head of Product Development for ServiceFrame, a SaaS based provider of sourcing governance software. Daniel is a Science graduate of Trinity College, and worked for a number of consulting and technology businesses before founding ServiceFrame in 2009, including PwC, AOL Technologies, Accenture and Palladium. During this time he worked in Software Development, Systems Integration and Outsourcing. Daniel is an Authorised Evaluator for eSCM - a Sourcing Capability Model for IT enabled Sourcing.

ServiceFrame's web-based software monitors the outsourcing or shared services contracts that companies have with external service providers for functions such as IT, human resources or finance. Organisations can use the software to measure these agreements on an ongoing basis against several criteria, including cost or quality of service. ServiceFrame claims its software significantly reduces the manual effort involved in collecting and assessing governance information, allowing companies to spend more time on managing the relationships with suppliers more effectively.

Notes:

• ServiceFrame (www.serviceframe.com)
• ServiceFrame material on YouTube
• Article in the Irish Times (irishtimes.com Friday April 8th, 2011)

Exercise: Distributed Agile Planning Game

Agile release iterations deliver multiple features and improvements in response to customer requests and/or project requirements (Kroll, 2007). One of the key elements of the scrum iteration is the planning activities that take place at its commencement. The goal is the organisation establishes a clear view of feature specification and value, understanding of architectural implications, and possible design solutions, and estimates of effort to facilitate the planning process between those representing the customer (or the business) and those responsible for development (Beck, 2000). The following figure suggests both how this can be part of both an up-front and an on-going process (fig. 1).

Goal
To demonstrate and experience the process of planning in a distributed team environment.

Overview

For the purpose of this exercise the following roles and activities are defined...

Roles/Identities:

• Product Owner
• Architect
• Lead Developer
• Scrum Master
• and additional developers if needed (Joe, Mary, Wu)

Activities for the PLANNING GAME

• Feature Discussion (5 minutes)
• Architecture discussion (~5 minutes)
• Design-delivery discussion (~5 minutes)
• Decide backlog including iteration deliverables, project size etc. (~10 minutes)

Materials

• Role cards
• Feature:Architecture:Deliverable diagram card
• Rules card
• A1 work sheets
• Marker pens and post-its

Part 1. Instructions  ~50'
This exercise is quite involved and difficult to understand first time, give sufficient time for the groups to produce a planning chart.

1. Divide the class into an even number of groups.
2. Handout materials and cards to each group (this can be done in advance of the class)
3. Groups assign roles.
4. Commence and conclude the first run of the group-centred PLANNING GAME. Allocate approximately 25' for this stage.
5. Each group produces a product backlog list with tentative delivery dates (Gantt style project schedule) using the A1 worksheet, post-its etc.
6. Review results with the whole class.

Discussion ~10'

What helped establish shared understanding?

How might you share knowledge in a commercial setting?

What tools and technologies facilitate?

Part 2. Instructions  ~50'

1. Divide equal numbers of either 'Clients' or 'Suppliers'
2. Now assign pairs of groups - Blue with Yellow - to conduct the second run of the game in a distributed-teams mode. 
3. Pairs of groups spend 5 minutes to introduce each other and roles.
4. Groups return to their work areas (opposite sides of the room or in different rooms).
5. Paired groups to discuss and agree a new product backlog and tentative delivery date for the first and/or subsequent iterations. Allocate approximately 15' for this stage. Paired groups may meet in person, via phone/skype, chat/text.
6. Each groups three points that worked well, three points that could be improved.
7. Paired groups report progress to the whole class.

Discussion ~10'
Do you think of the planning exercise as a problem with a fixed solution?
Do you think of the exercise as a process (on-going or one that could continue later)?
Once the groups were split into clients and suppliers did geographic separation improve or disimprove the planning process?
What kinds of things act as impediments to managing distributed teams?

References
Beck, K. (2000) Extreme Programming Explained : embrace change, Reading, MA, Addison-Wesley.
Kroll, P. (2007) OpenUP In a Nutshell. IBM Rational.
Schwaber, K. (2004) Agile Project Management with Scrum, Redmond, Washington, Microsoft Press.

Managing Distributed Teams

What is a 'distributed team'?

Why are distributed teams such a key part of outsourcing initiatives?

What tools are out there to help me manage a distributed team?

• Basecamphq project management software (...as a service, monthly fee) see basecamphq.com/
• Pivotal Tracker for Agile project management (...as a service, monthly fee) see pivotaltracker.com/
• activeCollab for project management (installable or as a service, mixed pricing) see www.activecollab.com/

Research and Further Reading

• Agile Game Development with Scrum
• What sort of Games can we play with teams?
• What electronic scrum/kanban board do you use and recommend for distributed teams?

SLA: If it looks like a contract and smells like a contract?

The typical SLA (Service Level Agreement) looks and smells like a contract, but is it a contract?
Have a look at these examples and make your own mind up (from Vinny).

Some SLA examples for Microsoft's Windows Azure Cloud Services Platform.

http://www.microsoft.com/windowsazure/sla/

These contracts service 'compute' capability, 'storage', and specialised applications like data, web content, and apps.

Notice the following: Contract-like structure (terms, definitions, exclusions, ), provision to claim 'credits' against 'downtime', and measurement methodology including parameters.

However, it's not quite a contract, it's more of a promise (that the vendor can change whenever) and in these case with a bonus (or penalty in the case of the supplier) "here's what I give you back if I fail to deliver". An SLA is nice to have, I might even pay something for it, it may even be referred to by a contract, but it isn't a contract!

Governance or 'how to manage the alliance'

The 'management' perspective on sourcing and global sourcing incorporates many tools, frameworks, methods etc. but tends to leave the 'management' model itself underdeveloped, presumably because firms already know 'how to manage', i.e. align and control resources. To phrase this differently, we assume management know how to manage, therefore remedies, techniques, and structures proposed for global sourcing are presented as unique or appropriate to the global sourcing context. Management simply needs to apply these novel or customised techniques in their own organisational contexts. Management simply wants new tools, the activities of management itself, "the acts of harnessing and controlling human activity to achieve desired goals or objectives", remains unchanged.

In the case of sourcing initiatives (projects) through to sourcing industries (addressing or creating markets for sourcing projects and services) we can bring focus back onto the overarching activity of management under the heading 'Governance'. Governance is the administration of activity, of people, projects, and resources. Governance retains the notion of its politics, of hierachy, of the concentration of resources and their control. Thompson (2003) refers to governance as action concerned with creating the conditions for ordered rule and collective action, but that it can be employed across multiple organisational forms: hierachies, networks and markets. Oshri et.al (2009) define governance as "the processes and structures that ensure the alignment of strategies and objectives of the parties involved" (Oshri et.al:112, 2009)

For sourcing initiatives governance capabilities are defined in terms of client and supplier perspectives by Oshri et.al, (2009). For the client organisation they are the processes that "align the client's objectives and strategies with the vendor's delivery system" (Oshri et.al:57, 2009). Governance from a supplier's perspective is "the dynamic alignment of the activities of the IT function with those of the overall organisaton." (Oshri et.al:84, 2009)

Reverting back to earlier research into the ITO (IT Outsourcing) industry, 'outside service management models' (Clark et.al, 1998) fall into five types: User Managed (functional manager), IS Managed (divisional), Vendor Managed (supplier), Committee Managed (e.g. a joint board or similar), Mixed Management. Each of these different types require differing forms of management or governance. Governance structure according to Clark et.al (1998) deals with and varies across three areas: Contract, Governance Costs, Governance Mechanisms. Contracts may be lengthy and detailed or short and general. Governance mechanisms can span close meticulous oversight through intensive compliance monitoring, through to 'light touch' intent monitoring. Costs and the need for cost control vary accordingly in direct proportion.

Aside: The very idea of 'Management', its purpose, meaning, legitimacy, culture, and consequences, has been widely and continuously debated by practitioners, theorists and researchers. Few deny the need for management as an activity, however the apparent necessity for Management as a specialisation is debated; see (Grey, 2005) for a gentle introduction to the issues of management of organisations.

References:

• Grey, C. (2005) A Very Short, Fairly Interesting and Reasonably Cheap Bookabout Studying Organizations, Sage Publications Ltd.
• Clark, T., Zmud, R. & Mccray, G. (1998) The Outsourcing of Information Services: Transforming the Nature of Business in the Information Industry. IN WILLCOCKS, L. P. & LACITY, M. C. (Eds.) Strategic Sourcing of Information Systems. Chichester, England, John Wiley & Sons.
• Oshri, I., Kotlarsky, J. & Willcocks, L. P. (2009) The Handbook of Global Outsourcing and Offshoring, Palgrave Macmillan.
• Thompson, G. F. (2003) Between Hierachies & Markets: The logic and limits of network forms of organization, Oxford University Press.

A Project Classic - Keep your 'eyes on the prize'

Reminded this evening by Michael McCabe of Fergus O'Connell's most excellent presentation of the project management solution; "How To Run Successful Projects - The Silver Bullet". The book and Fergus's training courses have deeply influenced many in high-tech in Ireland (link)

Governance Themes in Sourcing

What is the fact basis and following implications of claims that the IT industry has shifted from being people-dependent to process-dependent? (Oshri et al., 2007) One of the more significant implications is the claim that “knowledge management becomes part of the process.” (Oshri et al., 2007)

The idea that business operations should depend heavily upon ‘knowledge management’ appears at first to be vague, nebulous. What is knowledge and its relationship with skill, experience, expertise, know-how? How can knowledge be managed? Can knowledge be captured absolutely, transferred and shared unambiguously, valued, codified, commoditised, sold?

Oshri et al., (2007) don’t engage in understanding and theorising knowledge or knowledge management, instead they shift focus slightly towards the apparently less problematic idea of ‘expertise’. They characterise the desire to manage knowledge in terms of expertise as a personal characteristic, a characteristic that is evident as a resource both of the person and of the organisation.

“Expertise is a specific type of knowledge. It is dynamic, it evolves, and it consists of embodied knowledge and skills possessed by individuals. For our purposes, it refers to ‘knowing in practice.’” (Oshri et al.:54, 2007)

In this case study they present Tata Consultancy Services (TCS) ‘global delivery model’ (GDM) as a system of knowledge management, a system for managing dispersed expertise between pairs of organisations and multiple sites of labour (on-site, off-site, offshore). However while the article is located conceptually within knowledge management the global delivery model, its practices and dynamics address governance.

TCS's GDM is a project oriented view of the outsourcing business world. It requires a minimum 6 person management team, with three or more others (HR, QA). The GDM presents a set of recommended structures, processes, values and other mechanisms to shape or manage social processes surrounding knowledge and expertise development. Ultimately the GDM appears to be an organisational model, a simplified synopsis of TCS's own organisational structure and operational capabilities that contribute to its success as a kind of 'organisation of organisations'. The idea of an organisation of organisations captures TCS's situation where it manages multiple outsourcing relationships with many client firms. The first practice "implement an organizational structure that is a mirror image of the client's structure" imposes organisational flexibility upon TCS. The second, "implement a knowledge transfer methodology follows. Transfer commences between client staff and TCS onsite staff and continues from TCS onsite to TCS offsite (and remote) staff. Once 'internalised within TCS the GDM mandates codification, sharing, and reuse. Importantly though this is practice-centric human system rather than a static codification. They link projects with organisational capability as evidenced through personal development, career profiles and project records. The whole GDM as a process is reinforced by organisation-wide cultural conditioning, explicit 'values' to invest in continuous learning and knowledge sharing. While TCS's view of the work world is project centric, due to the continuous commencement and conclusions of project 'relationships', its success is dependent on its capability to share, bridge, and use learning 'across relationships'. The tetrad of interactions between TCS's four key capabilities (project management, quality assurance, digitisation, and centers of excellence) is central to the resilience of knowledge within TCS, despite the strangeness of TCS adopting the same multi-various organisational forms of its clients organisations.

It might be said that TCS is a purely knowledge organisation, one that is imminently adaptible yet consistent because of its reliance on the 'global delivery model’ (GDM).

References

Oshri, I., Kotlarsky, J. & Willcocks, L. P. (2007) Managing Dispersed Expertise in IT Offshore Outsourcing: Lessons from Tata Consultancy Services. MIS Quarterly Executive, 6.

IBM's Seven Keys of Success

IBM's own transformation as a competent and reliable global sourcing partner (supplier) involved refining and emphasising its internal 'project' perspective on high-tech production. They recognised that successful projects were the key to IBM's continued success. IBM had a catalogue the practices and techniques observed to be effective on the many hundreds of internal projects, both successful and unsuccessful projects, and practices or techniques that aided and impeded success.

"If you want to alter the course of your project's history, you must communicate at the executive level." IBM white paper, 2004

IBM's Project Management Centre of Excellence was promoted and eventually ingrained its approaches as core corporate value. They adapted the project perspective and refined it into a system for corporate delivery; governance for suites and programmes of projects. In essence this is a 'project of projects' approach and is applied across the entire organisation. A traffic light system monitors both direct and indirect controls. Direct controls are the typical outputs of any project: a schedule, scope, and performance against both. Indirect controls address the project's context, its environment and politics: overall benefits, stakeholders' involvement, risk mitigation, and delivery of benefits.

(figure 1. IBM 7 Keys HUD)

The model generally runs on a monthly cycle. These shared and relatively simple measures apply to all projects in the organisation (globally). The data is simple enough to be meaningful, aggregated and comparable across projects. The dynamics of the model are similar (if not identical) to the 'Deming cycle'; plan, do, check, act. In IBM's case for each project; 1) assess the state of the 7 keys over the period (1 month), 2) plan adjustments and change, 3) act and implement, 4) resulting in new status of the 7 keys.

Further reading

• IBM white paper: Altering project history - Seven Keys to Success, 2004 (link)
• IBM's Journey to Becoming a Project Based Enterprise (link)

Exercise: Introducing Outsourcing to an 'Industry'

Prepare a Response
As a consultant specialising in sourcing and outsourcing consider how you would respond to the statement, question and situation presented below...
Please post your comments in the comment form below.

Statement

Outsourcing is such a bad idea. The supplier simply wants to make profit. The buyer will make loads of mistakes and get shafted. So don’t do it. Its just a bandwagon!

Question

Formal criteria for selecting external suppliers are used in about one third of outsourcing decisions. Should formal criteria be used?

Situation

We are all members of the Management team in a large company employing 900 people here in Ireland. There are 18 people employed in the HR Department. Our Chief Executive has been to lunch with a friend who runs another large company employing 1,100 people. The friend has just made a decision to outsource his HR function (including payroll). There are two possibilities for outsourcing – one is with a company here in Ireland and the other is with a company based in Bermuda. The Chief Executive is keen on the idea and has nominated two people to “fulfill his wishes”. Let’s discuss the approach / issues involved here.

Acknowledgements: Questions/statements posed by Michael McCabe (mvmconsult.com)

Case: Bank of Ireland Outsourcing 2000-2011

Irish banks have, in the past, outsourced considerable operational activities to third-party providers. Bank of Ireland's multi-year deal with HP followed by the switch to IBM exemplifies one particular case of the benefits and risks of adopting a deep outsourcing strategy in a digital 'information' industry.

(24 February 2003: article-link) BOI license desktop and server software from Microsoft.
(4 April 2003: article-link) BOI announce 7 year deal with HP for IT services worth ~500M, over 500 bank employees to be transferred to HP.
(2 July 2003: article-link) BOI announce multi-million deal for banking software products.
(3 November 2010: article-link) BOI announce 5 year deal with IBM for IT services worth ~500M,

Goals of the MGS blog

Our goals are to equip ourselves and anyone following with the tools to:

• Describe typical organizational activities and products amenable to sourcing beyond the traditional boundaries of organizations. State the common modes of sourcing high-tech products and services.
• Highlight, summarize and justify the advantages and disadvantages of different sourcing modes.
• Relate historical trends in global sourcing to current topics and explain how local conditions have evolved. Illustrate the application of the various sourcing modes in example industries.
• Illustrate the relationship between technology trends and the emergence of expanding arrays of options around sourcing of product components and services. Analyse global sourcing discourse and break them down to identify the interests involved.
• Juxtapose the strategic decisions available to business between in-house and outsourced delivery. Propose remedial measures addressing organizational and technological issues relating to global sourcing. Suggest concepts and frameworks for interpreting and deciding sourcing cases.
• Identify emerging trends in sourcing relationships that are likely to be important in the future and contrast them against the current situations. Extrapolate and justify the implications of changing sourcing arrangements on complex inter-organizational relationships.

IBM virtual team in Belarus, China, India, Latvia and the U.S. to create JavaBeans (1997)

Source: The Edge: Work-Group Computing Report (archive at findarticles.com).

begin quotation...

---

February 18, 1997, Tuesday
IBM Goes On 24-Hour-A-Day Cycle To Speed Java Application Development LENGTH: 798 words DATELINE: SOMERS, NY   Highly Skilled Software Developers in Belarus, China, India, Latvia and the U.S. in Virtual Team to Create JavaBeans

It's 7 p.m. in Beijing. At China's renowned Tsinghua University, a team of highly skilled programmers are putting the finishing touches on software written in Java, the hot Internet programming technology. They will end the day by sending their work electronically to an IBM programming facility in Seattle for further development during the U.S. work day. This scenario will soon be repeated daily in Belarus, India, and Latvia, where some of the world's top programmers are involved in an IBM initiative to develop Java components, literally around the clock. IBM will spend hundreds of millions of dollars over the next few years to incorporate Java technology into its enterprise products. The goal is to help customers more effectively harness the power of the Internet and network computing to conduct electronic business. Twenty-four-hour-a-day virtual development teams tap the resources of top high-tech organizations in emerging markets to speed the development of JavaBeans(TM) for IBM's award-winning VisualAge(TM) application development environment. "Java holds the promise of applications that can be written once and run in any operating environment," said Steve Mills, general manager, IBM Software Solutions Division. "A seamless, networked computing environment, where even mission-critical applications can be moved around the organization, helps customers do business on the Web by increasing speed and efficiency." Around-the-Clock Development IBM is pioneering the innovative 24-hour-a-day development cycle of Java.

---

end quote.

Some notes on the background of sourcing.

Henry Ford’s Model T was the emblem of modern manufacturing systems characterised by suppliers and integrators working together to create value.
Industrial production, contracting, subcontracting and contracting out have been defining features of modern organisational forms since the industrial revolution and perhaps prior.
Two main organisational forms have prevailed in the modern era:

1. Vertical integration, managing and owning the whole value chain process from procurement of raw materials through to production of end product.
2. Horizontal specialisation, focusing on crafting/creating/delivering excellence at once core stage of the process of production before passing the processed good onto another stage.
3. Fordist manufacturing created conditions for interfaces between different tasks, activity, input, output, or stages of transformation making up the manufacturing process.
4. Japanese Kanban system is one extreme of layered specialisation from many small suppliers coming together under the umbrella of the main supplier/contractor/manufacturer in the manufacturing environment.
5. Inter-firm information/data process specialisation was enabled by EDI (Electronic Data Interchange) standardisation initiatives from the 1970s through to the turn of the century, now continuing under the aegis of XML and newer standards.

EDI enabled ‘e’ interfaces to be constructed between firms in a similar way to the input/output models of staged manufacturing.
Along the way it demonstrated the overcoming of geographical, spatial and temporal barriers to data exchange.
The modern global supply chain is an extreme case whereby a process’s implementation is facilitated by data exchange between a diverse array of firms thereby creating the very possibility of an integrated supply chain.

---

As an outsourcing destination Ireland has lost appeal throughout the last decade.
Rising costs and competition from developing countries has eroded many of the advantages that Ireland once held.
Consequently Ireland has itself become a net consumer of outsourcing services.
A driver of this trend is the steady erosion in competitiveness in Ireland at country level, a trend which has been in place since the mid-1990s.
The Irish Central bank quarterly bulletin January 2010 provides harmonised competitveness indicators (HCIs) for the Irish economy. Cost driven deterioration in Irish competitiveness has been partially compensated for by increases in productivity but only it appears by shifting lower cost lower value added activities and processes offshore.
The picture for IT outsourcing is however less clear as Irish based offices of multinationals move up the value chain.
Like all mature markets Irish firms and multinationals based in Ireland often outsource organisational function activities to local or international-based outsourcing providers; for example traditional areas like payroll, accounting, finance, legal, HR, purchasing, and logistics, but also such as marketing focused on SEO (search engine optimisation), web development, website hosting, IT services like e-mail and spam filtering, virtualised storage, and telephony services.
Core or primary value processes may also be outsourced but at a higher risk or for reasons other than cost reduction alone.
Whether providers of outsourced services based in Ireland themselves source their activities offshore or not is a matter for their own operations.

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Claims for the size of Ireland destined outsourcing activities and Ireland generated outsourcing vary, range widely between 100s of millions and billions.
Helpdesk and international call centre operations is one area where firms still see value in Irish based operations, particularly where multilingual skills and addressing the European market are important requirements.
In 2003, the value of the outsourcing market in Ireland passed €209 million ($234 million).
Irish banks have outsourced considerable operational activities to third-party providers (e.g. Bank of Ireland's multi-year deal with HP followed by the switch to IBM).
The public sector in Ireland also has long experience with outsourcing services particularly IT (e.g. The Irish Revenue Commissioners and Accenture).
Regardless of the provisioning destination (whether onshore or offshore) the trend is for organisations to increase the investment in outsourcing projects.
Even so firms experience with the outsourcing phenomenon is mixed as expectations to deliver higher levels of service grow and priorities change from simple cost reduction towards valued added.
Regardless of the experience with individual projects outsourcing is likely to remain a popular option with over half CIOs in Irish firms having budgets cut in 2009, cost saving will remain a huge driver or outsourcing initiatives.

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HP Video Podcast: Be "on the business" for strategic IT and outsourcing
Tim Hynes, IT Director Europe, Middle East & Africa, Microsoft

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