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OutsourceWorld 2008 – Emerging Providers Missed A Great Opportunity

OutsourceWorld 2008 Observations

This year's OutsourceWorld conference featured several dozen individual providers from regions and countries worldwide.  As Esteban Herrera, the President and founder of NovaSphere Group LLC, a global sourcing consulting firm, said on his blog, we too were surprised by what appeared to be a light showing of buyers for such a dynamic, resource rich event.   Many of the attending providers possess truly unique and creative business models, legitimate BPO, ITO, LPO and other outsourcing specialties and demonstrate a real alternative to the well known Tier One players and regions which dominate today's outsourcing provider landscape.  

Regrettably, as capable as these firms undoubtedly are in technical offerings, most were noticeably deficient in marketing and sales best practices.  In fact, most of our conversations with the provider community went something like this. 

"Welcome to fill in the blank Outsourcing.    We have all these skills and certifications and many more which are not listed," the provider representative would say, pointing to the pre-printed signs of certifications and specializations affixed to the walls behind them.   Then they would add, "AND we are a U.S. based operating entity.   Our headquarters are in fill in the blank (NY, CA, DE, etc.)." 

"Great," we would say to them, "But what does that mean for your customers?"   This is where they would really puff out there chest and proudly exclaim, "We are a legal US company, but all our teams are off-shore in fill in the blank (China, Vietnam, Poland, Ukraine, Mexico, Jamaica, etc.)."  

Most of these discussions ended here, with the providers telling us what they felt was their strongest differentiator, "So we cost less than India and we are fill in the blank (smaller, closer, easier to understand, less busy) than Indian ITOs."

At this point we would thank them and move to the next booth where, with few exceptions, we heard the same message repeated again and again.

Selling Competencies are as Important as Technical Competencies

From the buyers we spoke with and those who presented, it is clear most feel a need to diversify their outsourcing engagements across some number of emerging providers and regions, but where they should look and what they will find when they get there is far less evident.   There was a lot of discussion and speculation about locations "other than India", but the actual advantages of these geographies beyond geographical diversification are not so defined.  If labor cost arbitrage is truly becoming less of the driver than it used to be, then unique differentiators and value propositions for these emerging regions and providers are necessary to create a compelling reason for buyers to pay attention.

Here are our recommendations for the many emerging providers we spoke with who wish to improve their sales readiness.  Of course, feel free to comment or add to the list!

The Top Ten Marketing and Sales Ideas for Emerging (Market) Provider CEOs:

1.       The US business community is a multi-trillion dollar system, not a single, mass market.  Carefully choose the segments you can best serve.

2.       Think strategically about your sales model.  Maximize leverage and speed to market.

3.       Identify innovative and creative approaches to positioning yourself relative to your competition.

4.       Be unique in communicating your value proposition and the benefits your solutions provide.

5.       There is no stack of magic leads or secret Rolodex of buyers.  No one who truly adds value to your marketing and sales process will work for contingency fees.

6.       Buyers are looking for process improvements and innovation from outsourcing relationships, not just cost cutting.  Identify examples you can provide during your presentations.

7.       Stop worrying about whether a slow economy is good or bad for outsourcing.  Your own decisions and actions determine your success far more than the latest stock market headlines or buyer surveys.

8.       Do not ignore your existing customers in your efforts to grow your revenues.  Remember, they are your competitor's prospect!

9.       Consider in-direct relationships (alliances, partnering, sub-contracting) as an alternative sales market. 

10.   Define a sales process for your company and follow it faithfully.

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