Second Generation Outsourcing
posted by Glen Stidolph in Outsourcing |
Picking up from Steve Hamms article “A new model for Outsourcers” in his Bangalore Tigers blog http://www.businessweek.com/globalbiz/blog/bangaloretigers regarding the setting up of a new outsourcing model by a company called Antara Solutions.
Anantara Solutions is trying to revolutionize the Indian outsourcing industry by operating as a virtual outsourcing company–which taps partners with specific areas of expertise. If this model takes off, it could pose a serious challenge to the outsourcing status quo, not just in India but worldwide.
Anantara was started last year by G.B. Prabhat, who, beginning in 1995 had run Satyam Renaissance Consulting, a joint venture with India’s Satyam Computer.
They call their model Second Generation Outsourcing. Here’s how it works:
Anantara operates as a prime contractor and the interface with clients. It puts together a “solution,” including strategy, business processes, technology, and performance management. The company, with just 40 employees, has an ecosystem of 25 other companies, with a total of 2,500 employees, who are specialists in everything from Java coding to software testing. It draws on their skills to deliver the solution. Rather than focusing just on India, Anantara’s ecosystem also includes companies from Russia, China, and Singapore. And it plans on expanding into additional countries. Anantara gets the advantages of high-level skills from Russian companies and very low programming costs from some in China–where labor rates are as low as $8 to $11 per hour. “For the past 10 years, the outsourcing business model hasn’t changed, but the scale has expanded,” says Prabhat. “We have a radical vision of how outsourcing can change.”
I try not to mention my own company Catenate Sdn Bhd on Metagrobolize, however we operate a very similar business model as a manufacturing services company, with the difference that we actually own significant equity in vendors who carry out the core competencies that we market to clients around the world. The reason we do this is simple, we want to be known and remembered for our quality and the IP of our clients is a fundamental, and owning equity in our vendors gave us the most direct route in being able to influence them. This differentiates Catenate from many competitors in China and India, and we’ve all seen the results recently of clients not paying enough attention to the quality and capabilities of their vendors
Many vendors lie about their capabilities, capacity and lead times, and I see Anantara suffering from these problems with such a small staff, liaising with companies in many different countries and particularly when they try to scale up. I applaud Anantara for trying to take on the big guys in India, and wish them all the best, as well as watching carefully what their quality and deliverables turn out to be like.
