I’ve been wondering when the seemingly unstoppable trend towards globalization would mitigate concerns regarding which specific country is winning / losing as production is distributed around the world.  Up to this point, we have asked questions like, “Is India better than China for software outsourcing?” and “Should I place my big BPO center in the Philippines or in Costa Rica?”  To my mind, the basic assumptions behind these questions are faulty.  As reliable bandwidth becomes ubiquitous, and as various regions compete to the point that incentives become commoditized, we may see a time when the only question is, “What is the most efficient way to perform X?”  The right answer might be to do the work locally, or, perhaps, the best course would be spreading the work to many countries, or it could be to focus on an even less utilized region like Southeast Asia, or Eastern Europe.  I think that this is the basic thesis put forth by Thomas Friedman in his series of books and articles.

Mark Kobayashi-Hillary has an interesting post on this topic.  Mr. Kobayashi-Hillary observes that:

“…most senior executives I meet and talk to are really much more focused on the capabilities of partner companies, regardless of where that company is registered.

Can they do the job? I don’t care if they are based in California, Cornwall, or Korea. Yes, when companies are planning an offshore captive facility they will need to examine the fundamentals of that region, but I would argue that outsourcing is a lot more common than offshoring and creating a major captive for services.

Companies offering IT or IT-enabled services from regions such as China and the Philippines might want to work harder at developing their own reputation as a company, rather than supporting government-led initiatives and trade missions that do little more than present a sea of statistics and images of golf courses.”

Mr. Kobayashi-Hillary makes an excellent point in his advice that companies focus on their own strengths, rather than emphasizing national differences.  While I fully acknowledge that geo-political risk can be a factor in deciding against some countries, I still think that clients would be well served to concentrate on finding the right vendor, rather than picking a nation and then trying to identify a suitable organization.

Technorati Tags:  China, China Outsourcing