http://www.zeissesq.com/home Los Angeles, California Fri, 05 Sep 2008 04:35:34 +0000 http://backend.userland.com/rss092 en In this election, outsourcing is getting a lot of heat from the left as a force destructive to our economy.   The right, on the other hand, seems to believe that outsourcing is generally good for the economy.   The Indian press seems scared.   Which is it? The answer clearly ... http://www.zeissesq.com/home/2008/08/the-political-perspective-of-outsourcing/ In late October, the IQPC Legal Process Outsourcing conference is happening in Chicago.  It's a great conference for those interested in LPO matters. The link can be found here. http://www.zeissesq.com/home/2008/08/conference-notice-legal-process-outsourcing/ One of the major sticking points in most outsourcing and services deals is risk allocation.  If the supplier is presenting the paper, risk will generally allocated entirely to the customer.  If the customer is presenting the paper, risk will be allocated entirely to the supplier.  Then, after the business terms ... http://www.zeissesq.com/home/2008/07/develop-your-risk-profile-in-advance/ Topping my list of favorite companies are Apple, Southwest and Toyota.  Why?  Because they unerringly meet my expectations.  That is what I expect out of a company, whether they insource everything or outsource everything. What makes these companies great?  Top quality products, for sure, but there is something else beyond the ... http://www.zeissesq.com/home/2008/06/favorite_companies/ This year's TiECon East conference focused on the continued likely growth in outsourcing to India - seeking to dispel rumors of a bubble in the outsourcing market.  While this is not surprising - TiECon is the conference of the Trans Indus Entrepreneur organization - and may, in fact, prove true ... http://www.zeissesq.com/home/2008/06/more-evidence-of-market-fragmentation/ In recent years, it seems as if corporate decision making has become increasingly risk driven.  Compliance requirements are seen as a key driver - because of some of the corporate excesses of the recent past, complex regulations like Sarbannes-Oxley have unquestionably increased the difficulty of addressing compliance issues. These regulations have ... http://www.zeissesq.com/home/2008/06/does-risk-awareness-cost-too-much/ In a recent article published on Law.com, W. Carter Santos makes an argument against using Letters of Intent (LOI’s) to move projects forward when the negotiations of an outsourcing deal become protracted. His primary argument is that the customer looses substantial leverage by letting the vendor begin work prior ... http://www.zeissesq.com/home/2008/06/loi%e2%80%99s-and-outsourcing-agreements/ Just moments after I wrote this morning’s post, my computer, a six-month old MacBook, froze.  After several attempts at restarting and some web research, I called AppleCare.  The agent, clearly domestic and probably an Apple employee, walked me through several, ultimately futile steps.  He then suggested that I take it ... http://www.zeissesq.com/home/2008/06/customer-service-%e2%80%93-the-way-it-should-be/ In an article in today’s India Daily, (link) Hrithik Ratnagar suggests trouble for the Indian IT outsourcing segment.  According to Mr. Ratnagar, this trouble is caused by the slowdown in the US economy, the weakness of the dollar and the strength of the rupee, the US political climate, and internal ... http://www.zeissesq.com/home/2008/05/trouble-in-paradise/ Yesterday, Ephriam Schwartz published an interesting article in InfoWorld (http://weblog.infoworld.com/realitycheck/archives/2008/05/outsourcing_bre.html).  The article talks about the challenges faced when breaking up a large deal into component pieces. Ultimately, the problem is one of management - the same affliction faced by many outsourcing deals.  Whether it is “one throat to choke” or many ... http://www.zeissesq.com/home/2008/05/how-many-throats-to-choke/  The Institute for Global Challenges and the Law at Boalt Hall in Berkeley is sponsoring a conference called:  THE INTERNATIONAL OUTSOURCING OF THE LEGAL PROFESSION  On Friday, April 25, 2008, in Berkeley, California  Registration can be found here http://www.zeissesq.com/home/2008/04/conference-notice-the-international-outsourcing-of-the-legal-profession/ Much of the monitoring of an outsourcing deal is based on specific metrics. There are good reasons for this approach — after all, metrics are “hard numbers” and are relatively easy to measure. No doubt, meeting metrics is also a very important part of any quality outsourcing deal. ... http://www.zeissesq.com/home/2008/01/beyond-metrics/ Here is my annual list of New Year’s Resolutions for those of us in the outsourcing industry. For Outsourcing Customers 1) I will dedicate adequate resources to managing my outsourcing deal. 2) I will send out RFP’s only to vendors with a chance of earning the business. 3) I will set service levels that ... http://www.zeissesq.com/home/2007/12/a-21-gun-salute-resolutions-for-customers-suppliers-and-advisors/ In one of my favorite recent articles, Victor Gomez of the Dallas Morning News discussed the troubles faced by the big three Dallas-based outsourcing vendors, EDS, ACS and Perot. All are feeling the heat from Indian-based vendors, and are blaming the cost differential for their problems. I would like to ... http://www.zeissesq.com/home/2007/12/how-to-save-the-us-outsourcing-business/ In an interesting article appearing on cNet.com on December 13, Steve Tobak asks the question, “Would you pay more for better service?” In the article, Mr. Tobak implies that most Americans wouldn’t pay extra for domestically-delivered service (assumed to be superior) than they would for off-shored service (assumed to ... http://www.zeissesq.com/home/2007/12/will-customers-pay-more-for-customer-service/ The life cycle of outsourcing as a trend is following the same pattern as recent business fads. Certainly, the U.S. domestic deal flow, which has been weak at best, is showing its age. I expect that European outsourcing, which was the major hot growth area in 2007 - ... http://www.zeissesq.com/home/2007/12/outsourcing-the-end-is-near/ In recent years, legal fees of major law firms have grown dramatically, both on a per-attorney and per-matter basis. Individual attorney fees can be as high as $300/hour for a first year attorney. For complex mergers and acquisitions, litigations and patent prosecutions, fees can easily reach into seven ... http://www.zeissesq.com/home/2007/10/legal-process-outsourcing-how-to-make-it-grow/ A September 17, 2007, article in CIO magazine entitled “How to Measure Real Outsourcing Success (Hint: It's Not the SLAs)” pointed out some interesting statistics about outsourcing and outsourcing happiness. Starting with the premise that SLA statistics are not a measure of happiness, the article described a process built ... http://www.zeissesq.com/home/2007/09/zen-and-the-art-of-outsourcing-happiness/ There was an interesting short article in Computer World on Monday, August 27 (link here) that described a trend in which outsourcing customers are bringing disaster recovery back in-house. Having witnessed this debate on an ongoing basis several times, I read this article with a combination of cynicism and ... http://www.zeissesq.com/home/2007/08/disaster-recovery-in-or-out/ Outsourcing has had a difficult year in North America. There are many explanations, some point to quality concerns, some to governance concerns, and some to a reduction in value caused by the combination of labor shortages and currency fluctuations. All of these represent a change in the risk-reward analysis that ... http://www.zeissesq.com/home/2007/08/fixing-the-perception-of-offshoring-in-america/ TPI’s Peter Allen, in a recent blog posting in “The Deal”, asked whether it was better to offshore a business process using a captive or third-party model. Interestingly, the article offered no real conclusion to the question of which is better, but did highlight the most important aspect – and ... http://www.zeissesq.com/home/2007/08/commentary-to-peter-allen%e2%80%99s-posting-in-the-deal/ In a recent ComputerWorld article, Gerry Clark of TPI offered his perspective on outsourcing trends. One of the most interesting things that Mr. Clark highlighted was the increasing effort provider markets take to distinguish themselves from other markets. He says: Differentiation seems to be the direction that most are ... http://www.zeissesq.com/home/2007/07/cost-scalability-capability/ In an article appearing in Computer World on July 23, 2007 entitled “When to Fix a Broken Process,” Bart Perkins of Leverage Partners, Inc., explores a question that many ask – whether it is better to improve your process before or after you outsource. Mr. Perkins aptly points out ... http://www.zeissesq.com/home/2007/07/fixing-broken-processes/ Claims processing is one of the cornerstones of outsourcing in the insurance industry.  This primarily back-office task is often seen as a great opportunity to save money – as it is primarily ministerial, not customer-facing and based on specific rules and guidelines.  Many insurers have grasped this concept and moved ... http://www.zeissesq.com/home/2007/07/outsourcing-issues-in-insurance-claims-processing/ According to a recent article found on ZDNet UK (here), more and more U.S. companies are participating in “do-it-yourself” (DIY) outsourcing. This has caused a slow down among outsourcing consultants and law firms – all of which suffer when companies take on outsourcing themselves. What is being gained ... http://www.zeissesq.com/home/2007/07/do-it-yourself/ The Wall Street Journal article dated June 16, 2007 and entitled "The Seven Myths of Outsourcing" (at this link) is a great survey of significant issues arising in outsourcing deals. While it points out certain major flaws in the deal-making process, however, it fails to scratch below the surface ... http://www.zeissesq.com/home/2007/06/the-seven-myths-of-outsourcing-wsj-article/ I recently had the opportunity to represent an outsourced services supplier in one deal and a new outsourced services customer in another. In both deals, the other side provided the paper. The experience left me even more sure that a better way must exist for these deals. The customer ... http://www.zeissesq.com/home/2007/06/a-tale-of-two-deals/ Addressing Complexity Complexity is the first thing that we must change to facilitate the development of governable outsourcing deals. We have all been taught to believe, axiomatically, that “more information is better information.” Current outsourcing deals generally reflect this approach, drawing “every leaf on every tree” to describe the ... http://www.zeissesq.com/home/2007/05/a-governable-deal-part-iii/ Why do we create ungovernable deals? Outsourcing deal documents fail to support governance for many reasons. Chief among them is that the deal paper is simply too complex. These documents go on for literally hundreds of pages, are full of arcane language and do not provide adequate information to ... http://www.zeissesq.com/home/2007/05/a-governable-deal-part-ii/ Like most outsourcing attorneys, I have experienced the telephone book-sized outsourcing deal. Truth be told, I even created a couple in my day. Being in the relatively unique position of in-house outsourcing counsel, I also had the opportunity to deal with the other end of the process – ... http://www.zeissesq.com/home/2007/05/a-governable-deal-part-i/ A few years ago, a product came out that could have - and should have - revolutionized much of the way that business information is presented. Called the "Ambient Orb," the product was simply a sphere that glowed, usually with the stock market. Green was up - the ... http://www.zeissesq.com/home/2007/05/keep-it-simple/ In E.M. Foerster’s “A Passage to India,” the conflicts between British aristocracy and the Indian professional class was explored. It was a difficult story, highlighting pride, prejudice and institutionalized bias. These days, however, passages to India (and Singapore, Argentina, Belgium and Thailand, among others) mean something entirely different for hundreds ... http://www.zeissesq.com/home/2007/05/a-bypass-age-to-india/ Over the past few years, outsourced call centers have become a whipping boy for the trouble with outsourcing. We have all seen the cartoons or the YouTube videos and we have all had similar experiences… A poor customer negotiates a maze of teleprompts and menus, is placed on ... http://www.zeissesq.com/home/2007/04/the-trouble-with-outsourced-call-centers/ Recently, there has been a lot of press coverage over TPI’s analysis of the first quarter’s severe market drop-off in U.S. outsourcing. Many press agencies have picked up the story and, like Chicken Little, are claiming that the sky is falling. Other analysts are calling it, at worst, a temporary ... http://www.zeissesq.com/home/2007/04/the-slowing-market-in-outsourcing-%e2%80%93-what-to-make-of-it/ Some law firms claim to be “Champions of the Customer,” a phrase that I always thought was a bit peculiar in the context of outsourcing deals. Thinking about this, I looked up the word “champion” and found the following definition: “a militant advocate or defender.” Is that what ... http://www.zeissesq.com/home/2007/04/champions%e2%80%a6-of-what/ Software as a Service (SaaS) is a services delivery model being sponsored by many software vendors. While not generally referred to as “outsourcing,” SaaS has many of the same features, and requires many of the same contractual precautions of an IT outsourcing. In a true SaaS model, the software vendor ... http://www.zeissesq.com/home/2007/04/software-as-a-service-%e2%80%93-another-form-of-outsourcing/ A short entry in Baker & McKenzie's March 2007 Outsourcing LegalBytes entitled "Governance: A Key to Offshoring Success" offers an interesting perspective on the importance of governance: A comprehensive study by A.T. Kearney offers surprising insights into the reasons for successful offshoring. Results from offshoring varied widely among surveyed companies, ... http://www.zeissesq.com/home/2007/04/governance-too-much-is-not-enough/ According to a Deloitte survey cited in an article by Jeana Wong in Channel News Asia, outsourcing is not generating the savings promised. Surprising? No. Actually, to anyone in the business, it is pretty obvious. Nor are the reasons surprising. In that article, Phua Jer Hong, regional practice leader of Strategy ... http://www.zeissesq.com/home/2007/04/why-outsource/ (the Obese Outsourcing Term Sheet, That Is) Back when I was in high school, I knew a guy who was a great athlete – baseball, football and track letterman. He had all the pretty girls swooning over him (including the one that I was secretly in love with). He ... http://www.zeissesq.com/home/2007/04/my-how-you%e2%80%99ve-grown-the-obese-outsourcing-term-sheet-that-is/ Much has been written about the failures of outsourcing deals to live up to their true potential. Poor communications, scope creep, and unrealistic promises and expectations top the list. Interestingly, these are all derivatives of poor deal governance – both by suppliers and customers. Certainly, the governance issues among customers are ... http://www.zeissesq.com/home/2007/04/why-is-outsourcing-governance-so-bad/