The shift from multinational, to transnational, to global corporations is well underway, and the need for borderless business collaboration is becoming ever more vital.
Increasingly, today’s business climate is neither time nor location based, meaning that companies must build strong global capability themselves or through a network of suppliers to compete.
One method being used to strengthen links between partners in remote locations is the adoption of web 2.0 technology. Once solely the domain of the consumer, enterprises are now taking web 2.0 principles and ideas and applying them to the business world.
In particular, outsourcing firms and their customers have a lot to gain from using web 2.0 technology to create bespoke online networking platforms in order to improve the quality and speed of globally delivered projects.
The evolution of outsourcing
When the concept of outsourcing first emerged, its primary goal was cost cutting, using low-cost labour to supplement existing staff and leveraging economies of scale and rationalisation.
Through the offshore relocation, cost-effectiveness immediately improved but the model was insufficiently equipped to perform anything beyond basic engagements. When inadequate results were delivered on more complex projects, the immediate need to revise and resolve meant that any short-term cost savings disappeared.
The latest model of outsourcing puts long-term business impact at its core. Characterised by seamless integration between provider and customer, IT providers taking this approach combine the cost-effectiveness of offshore capability and on-the-ground expertise needed to manage projects at the highest level.
The one element that continues to contribute to the outsourcing industry’s rapid growth - apart from the availability of talent - is, of course, their improved results. Competition amongst outsourcing providers is intense and outsourcers continue to drive down costs through developing, utilising and maximising resources in India, China, Europe, North and South America. With these resources spread throughout the globe, their efficient use is crucial in generating competitive advantage, and advanced collaboration over the Internet is key to this process.
Over the last few years, consumer web 2.0 technologies have redefined how the Internet can be used to connect remote individuals, and the business world has taken note. Developments like blogs, wikis, VoIP and IM, and websites such as eBay, YouTube, Facebook and MySpace have all contributed towards a historic shift towards online networking and collaborative content generation.
Organisations, learning from the rapid evolution and massive success of these consumer services, are now looking to incorporate similar techniques into their own business models, blurring the boundaries between consumer and enterprise IT. An early example of this is streaming online video, which is now commonly used to disseminate information throughout a business, having been popularised by sites such as YouTube or the BBC iPlayer.
Taking these principles further, forward-thinking organisations are developing structured platforms - sometimes referred to as the “Services Cloud” - that foster a collaborative, real-time, knowledge-sharing portal through which they can deliver significant time-to-market, cost and transformational value to clients.
In this way web 2.0 is helping to move global outsourcing forward by ensuring that clients are given the best possible level of service, and are able to profit from new, more collaborative ways of working. It allows outsourcers to develop new levels of customer closeness and satisfaction, and if correctly implemented, can result in dramatically reduced interaction costs but with an improved result - made possible by drawing upon a global pool of talent and using the ability to track project performance in real time.
The Services Cloud
Real-time collaboration on specific projects between global, regional and local development centres through one central portal is the first benefit of a web 2.0 platform. Consultants across the globe are encouraged to collaborate to solve specific business problems using the best delivery resources, regardless of location.
For example, a developer in China, a tester in Hungary, a designer in Chennai and an analyst in the US can collaborate in real time to execute a project, using tools such as web conferencing and IM to overcome physical distance. These tools make it easier for colleagues to simulate face-to-face conversation and reduce the possibility of any misunderstandings.
This is very similar to an open-source development, except that it is a defined project, with set deliverables and a particular process to follow. Within such a virtual work environment, remote colleagues can use their combined experience, knowledge and creativity, avoid duplication of work and complete the given task more quickly.
Collaboration like this gives clients a global pool of knowledge from which they can draw appropriate resources, even if a project is primarily being delivered by staff working in just one offshore location. In today’s hyper-competitive IT market, the ability to tap and share intellectual capital increasingly separates the market leaders from the rest.
This is especially true when operating on a global basis, where constantly moving projects are simultaneously worked on in multiple locations. In these situations it’s imperative that managers trust remote staff and understand that whilst asleep, progress, decisions and possibly mistakes will be made. This puts a premium on employee empowerment, with consultants across the globe trusted to make the right decisions.
Judgement and creativity can come from any aspect of the organisation, so to leverage and maximise intellectual capital, organisations need to develop a leadership model that encourages individuals to share insights. This has the potential to improve the knowledge of all onshore and offshore agents, meaning clients can expect better results, while employees learn on the job from talent pools located elsewhere.
Here web-based, participative community models can be built, using wikis, forums, blogs and social bookmarking. As an example, at Cognizant we now have over 10,000 regular bloggers, whose pages attract two million page views per month and 17,000 active commenters.
Our wikis have reached 8,000 pages, with over 100 different communities, while the social bookmarking system now numbers over 75,000 bookmarks. This sharing of knowledge has helped to improve the timeliness and quality of responses to customers, while also bridging geographic boundaries and reinforcing our own corporate values and identity.
The above techniques help consultants improve their quality of work and speed of final delivery, but what else does web 2.0 bring to their clients? Aside from faster, better results, clients’ main benefit comes from the ability to gain valuable insight into each project as it happens, using the platform to capture, measure and display consultants’ performance in real-time.
In the same way that a consumer can track the precise status of an order with an online retailer such as Amazon.com, companies who outsource projects can be given direct access to their service provider’s system, where they can log-in and check up on the progress of any particular project at any time. Reporting can also be improved, as clients get real-time visibility of their projects 24 hours a day, compared to the periodic and static reports issued in the past. As a result, the provider can develop a much greater sense of transparency and trust.
Global delivery represents the future of the outsourcing industry, but efficient use of remote resource is essential to maximise the potential benefits. By learning from the recent successes in consumer IT and absorbing these ideas into the business world, providers can move quickly to generate valuable competitive advantage. Web 2.0 technology makes the best use of an organisation’s intellectual capital, taking quality, efficiency and productivity of service to new levels.
This article was written by Sanjiv Gossain, UK Managing Director of Cognizant Technology Solutions.