This document discusses the differences between offshoring, nearshoring, and outsourcing. Offshoring involves having team members in different geographic zones, nearshoring involves having team members in different locations within the same zone, and outsourcing involves contracting with an external third party provider. Both offshoring and outsourcing managers require skills in cultural awareness, communications, workload management, compliance, and vendor management. The document advises managers to develop competencies in these areas in order to effectively manage distributed teams across locations and organizations.

1. OFFSHORING
IS NOT
OUTSOURCING
hey clueless managers – stop
being lame!!!!!
http://www.flickr.com/photos/55984616@N00/

2. PART ONE
OFFSHORING

3. What is Offshoring?

4. Let’s divide the world into 3 zones:
1) Americas
2) Europe, Middle-East & Africa
3) Asia Pacific

5. Offshoring happens when a
delivery manager has team
members based in more than 1 of
those 3 zones

6. Nearshoring, happens when a
delivery manager has team
members in more than one
location, but within a single zone

7. EXAMPLE
a software development manager
is offshoring if she has 4
developers in Zurich and 12 in
Mumbai and/or 6 in Weehawken

8. EXAMPLE
An operations manager is
nearshoring if he has 6 people in
Tokyo & 20 people in Singapore.

9. why offshore?

10. REASON ONE
Reduce the cost of operations
(potentially by far the most
important) by location-specific,
loaded salary arbitrage

11. REASON TWO
To support our clients or other business
units where (or when) they are

12. REASON THREE
Access global talent pools where they
exist

13. what do you need to know to be a
good offshoring manager?

14. managing nearshore & offshore
teams requires many of the same
skills

15. unfortunately nearshoring managers
often fail to receive training

16. which is annoying for Singaporeans
and Indians supporting managers in
Tokyo and Hong Kong who only
'think' they know how to manage a
nearshore team

17. so nearshoring and offshoring
managers both need to do some
training

18. Being good at Shoring requires 7 core
competencies

19. SHORING CORE COMPETENCY ONE
Cultural Awareness / Sensitivity

20. SHORING CORE COMPETENCY TWO
Using Communications tools effectively
/ Knowledge Transfer

21. SHORING CORE COMPETENCY THREE
Managing and architecting distributed
workload (how do you effectively divvy
up work across locations and time)

22. SHORING CORE COMPETENCY FOUR
Matrix Management

23. SHORING CORE COMPETENCY FIVE
Virtual-Team administration & talent
management

24. SHORING CORE COMPETENCY SIX
Jurisdictional compliance

25. SHORING CORE COMPETENCY SEVEN
Geo-political macro-economic trend /
strategic risk management & site
selection (only at leadership level,
really)

26. CAVEAT ALERT
You can define Offshore, Nearshore,
and Onshore around differences
between cultures as opposed to
geographical zone. I think geographical
zones is more effective in practice
though....

27. PART TWO
OUTSOURCING

28. What is outsourcing?

29. Outsourcing, happens when you enter
into a contractual relationship with a
third-party company to deliver a
product or process

30. outsourcing may or may not include
offshoring

31. so a manager in London would be
outsourcing if she worked with IBM in
London or Infosys in Chennai

32. Insourcing happens when you enter
into a contractual relationship with a
subsidiary to deliver a product or
process

33. insourcing also may or may not involve
offshoring

34. Note that many regulators (especially after 'Too Big
To Fail') require the same operational controls for
Insource as well as Outsource relationships even
though Insourcing is through parent/child legal
entities. So it is important to deal with them both in
any internal curriculum

35. why outsource?

36. REASON ONE
Acquire specialized skills

37. REASON TWO
Transfer costs and risk to third party
who enjoys economies of scope or
scale

38. REASON THREE
Transfer out non core-competencies
so that we can focus on our core
competencies

39. REASON FOUR
Move semi-variable balance sheet
costs (salary) to fully-variable costs

40. REASON FIVE
Move very fast

41. REASON SIX
Handle short-term demand peak

42. REASON SEVEN
Reduce costs

43. what do you need to know if you are
managing outsourcing?

44. being good at sourcing requires 8 core
competencies

45. SOURCING CORE COMPETENCY ONE
Service-Level Agreements &
Management

46. SOURCING CORE COMPETENCY TWO
Negotiation

47. SOURCING CORE COMPETENCY THREE
Contract Management

48. SOURCING CORE COMPETENCY FOUR
Vendor Discovery & Selection

49. SOURCING CORE COMPETENCY FIVE
Transition Management (in and out)
and Knowledge

50. SOURCING CORE COMPETENCY SIX
Invoice Management

51. SOURCING CORE COMPETENCY SEVEN
Supply Chain Management Controls
(Supplier Risk Management) Execution

52. SOURCING CORE COMPETENCY EIGHT
Competitive Core Competency
Strategy (what do we outsource and
what do we keep. Leadership skill
mainly)

53. PART THREE
FINAL WORDZ

54. OK, managers

55. you are now warned

56. skill up!

57. so you can stop shooting yourself in
the foot

58. with immature management practices

59. Selena Sol asks…..
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