IDG Connect: Cognizant’s Group Chief Executive for Technology and Operations Says Emerging Markets are Driving Adoption of a Global Sourcing Model

“The value gained from outsourcing has moved to a new phase of “intellectual arbitrage”, where the goal has moved beyond simply improving existing outcomes or making them cheaper,” writes R. Chandrasekaran. “Now, it is increasingly about partnering and making use of talent in different geographies and time zones to achieve key business objectives and growth, while winning market share.”

According to Chandrasekaran, the services value chain has gone global in the last few years, in a similar way to the manufacturing supply chain that went atomically global a couple of decades ago. “Today, discrete sub-tasks can be broken down and farmed out to different locations where the best talent exists, at an appropriate price point,” he observes.

While more established outsourcing hubs such as India, China and the Philippines still remain, he says other regions such as Brazil, Mexico, Indonesia and South Africa are starting to make their mark. “However, by definition, no single location can offer everything to everyone. Instead, they are increasingly complementing each other in the global business dynamic,” he notes. “Over the next few years, we will see a dramatic shift in the balance of service production among developed and emerging markets, marking the rise of many other countries as attractive service delivery destinations thanks to their large talent pools and cost competitiveness.”

He adds, “Globalization has provided new opportunities for today’s businesses and changed the outsourcing world as we know it. To succeed, organizations need to partner with global outsourcing providers that have the expertise to ensure the investments, building, and execution of the capabilities are carefully planned and tailored to their needs. Central to this is targeting the right geographies with the right skills and infrastructure to meet strategic goals and win market share, while driving growth through innovation. This is true across all business functions from outsourcing traditional business process capabilities to the latest R&D laboratories.”

Click here to read more.