The 'futurescape' of global sourcing

The WBPO/ITO Forum kicks off next week with a focus on reinventing global sourcing. Here's a preview of Vishal Ahluwalia's talk on offshoring trends.

The World BPO/ITO Forum kicks off next week in New York with keynotes by Marv Adams, COO at TD Ameritrade Holding...

Corp. and Filippo Passerini, group president, global business services and CIO at Procter & Gamble, and talks by a who's who of prominent C-suite executives. Now in its 7th year, the World BPO/ITO Forum bills itself as the "only global thought-leadership forum specifically designed for mid-to-large cap enterprises in maintaining a competitive advantage through global sourcing arrangements that drive innovation and growth." This year's theme is "Reinventing Global Sourcing: Cloud, Mobile & Social."

SearchCIO editorial director Christina Torode caught up with event speaker Vishal Ahluwalia for a preview of his "Going Vertical Panel: Outsourcing Strategies & Emerging Business Models in 2014 and Beyond."

Ahluwalia has held global sourcing executive level positions at UBS, Credit Suisse and Unisys. He is a strong believer in rightsourcing, insourcing and optimizing business process outsourcing (BPO) through seamless offshore delivery. Here is what he had to say on why CIOs need the full panoply of these sourcing modes to deliver value and innovation to their companies.

On the future of offshoring

Vishal AhluwaliaVishal Ahluwalia

There are a few things happening to shape the "futurescape" of offshoring. Cloudsourcing is creating a global work force. With 50% of your workforce interacting with you offshore and through the cloud, you are bound to synthesize their knowledge within your team. What is also happening is insourcing, due to a strong need to meet compliance regulations and prevent risks. That's why we're seeing UBS using facilities in Nashville [Tennessee] or Credit Suisse in Raleigh [North Carolina] for core banking functions. At the same time I see a lot more offshoring happening in the next five years because a lot of the low-hanging fruit functions that are non-core, have yet to be outsourced. Then you have the trend toward human and robotics working together to create automated processes. And, with cloudsourcing, human/computer automation and insourcing and offshoring reaching an optimization plateau as a result of these things coming together, I think real innovation will start to be seen in offshoring.

On initial steps to create a global sourcing strategy

A lot of the low-hanging fruit functions that are non-core, have yet to be outsourced.

Every time sales had a contract they brought before the board, it had to have a reason why that value position couldn't move offshore. And, if it couldn't move offshore, we had to look at bringing those functions under one umbrella. Many times functions are siloed, but functions such as testing or operations -- and ones that cut across HR, finance and many departments -- need to be moved under one governance structure into a shared services model.

On the challenges of moving to an offshore model

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What function or process is your company offshoring?
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My company offshores software development. Not all of it - among our software development teams, we are about 90% contractors. Of those contractors, nearly 50% of them are offshore. It can be a pain, at times, as all of the employees must spend a significant amount of time guiding the contract teams and checking over their work. Most of the pain points are inherent to all of the contracted teams of developers, but there are additional legal issues specific to the offshore teams, because the U.S. government has laws pertaining to the type of data we process and store, and we cannot allow non-U.S. citizens to have access to this data. As you can imagine, it makes their jobs very difficult for them, and we have to compensate for that.
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Little to none.. We might look into it when project deadlines become an issue and we can't spare the manpower. Otherwise it's in-house. 
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