The Russian Outsourcing Future: Get it right
Russia now has a limited window of opportunity to develop a 'world's best practice' model that could be built on and provide a long-term opportunity for growth and sustained profits.
Jul 22, 2002
By Robert Burns
I have been in the IT industry for over 30 years and the phenomenon known as 'The Global Economy' prompts varying reactions from various quarters depending who you talk to. It seems that the need to become a member of the 'WTO' or World Trade Organization is the driver for most non-member countries to establish a 'Western style' model acceptable to most big corporates globally. Israel, India, Ireland and many others have tried to develop models that attract investment into their local economies to emulate the growing 'Tigers' in Asia. Each in their own right has been moderately successful to varying degrees BUT do not be fooled the primary draw has been a matter of cost.
Western countries had a boom in the early 90's and everyone eschewed the new 'Information Superhighway' as the wave of the future. It was to provide information to the masses and provide an e-commerce boom that would grow to US$800 Billion by 2004 if market pundits were to be believed. The shattered IT and Telecommunications giants of today are now licking their wounds that were self inflicted driven by the so-called marketing gurus who talked up the potential and hyped the unreachable goal. Not good news all round for the world's economies but strangely excellent news for Russia and it's fledgling industries. Why you ask? Simply put the need to 'catch up' has gone and a 'New Model' is needed to establish solid foundations and build for future growth. Russia has many talented individuals and very good skills but lacking experience and a true understanding of 'market pressures'. This can be addressed in various ways and with a 'value added' benefit to clients and Russia.
I have dealt with various companies in India and Israel and the best I can say is that Israel has many great hardware innovations and India has cheap labor. Many tasks for Y2K were allocated to Indian companies and to a great extent successful in their deliveries. The driver in quality was lessened by lower costs and a lack of experience by many newly graduated programmers. It would be in the best interests of Russia to learn from the past and try to combine the best of both worlds in developing a truly resilient and long lasting model not built on cost alone. Speed, quality, adaptive variations and 'knowledge transfer' are the main drivers for development of software and it's value added benefit to the customer. It is also important that IP or Intellectual Property is retained so that any 'out of contract work' may be offered as a value added benefit and could attract residual payments or licensing benefits.
In conclusion Russia now has a limited window of opportunity to develop a 'world's best practice' model that could be built on and provide a long-term opportunity for growth and sustained profits. It should also be stated that there is strength in numbers and the amalgamation of the varying companies to agree on terms and conditions that do not lead to non-viable competition with other countries is strongly proffered. Good days ahead if hard decisions are made now.
I have been in the IT industry for over 30 years and the phenomenon known as 'The Global Economy' prompts varying reactions from various quarters depending who you talk to. It seems that the need to become a member of the 'WTO' or World Trade Organization is the driver for most non-member countries to establish a 'Western style' model acceptable to most big corporates globally. Israel, India, Ireland and many others have tried to develop models that attract investment into their local economies to emulate the growing 'Tigers' in Asia. Each in their own right has been moderately successful to varying degrees BUT do not be fooled the primary draw has been a matter of cost.
Western countries had a boom in the early 90's and everyone eschewed the new 'Information Superhighway' as the wave of the future. It was to provide information to the masses and provide an e-commerce boom that would grow to US$800 Billion by 2004 if market pundits were to be believed. The shattered IT and Telecommunications giants of today are now licking their wounds that were self inflicted driven by the so-called marketing gurus who talked up the potential and hyped the unreachable goal. Not good news all round for the world's economies but strangely excellent news for Russia and it's fledgling industries. Why you ask? Simply put the need to 'catch up' has gone and a 'New Model' is needed to establish solid foundations and build for future growth. Russia has many talented individuals and very good skills but lacking experience and a true understanding of 'market pressures'. This can be addressed in various ways and with a 'value added' benefit to clients and Russia.
I have dealt with various companies in India and Israel and the best I can say is that Israel has many great hardware innovations and India has cheap labor. Many tasks for Y2K were allocated to Indian companies and to a great extent successful in their deliveries. The driver in quality was lessened by lower costs and a lack of experience by many newly graduated programmers. It would be in the best interests of Russia to learn from the past and try to combine the best of both worlds in developing a truly resilient and long lasting model not built on cost alone. Speed, quality, adaptive variations and 'knowledge transfer' are the main drivers for development of software and it's value added benefit to the customer. It is also important that IP or Intellectual Property is retained so that any 'out of contract work' may be offered as a value added benefit and could attract residual payments or licensing benefits.
In conclusion Russia now has a limited window of opportunity to develop a 'world's best practice' model that could be built on and provide a long-term opportunity for growth and sustained profits. It should also be stated that there is strength in numbers and the amalgamation of the varying companies to agree on terms and conditions that do not lead to non-viable competition with other countries is strongly proffered. Good days ahead if hard decisions are made now.