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May 08, 2008

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Phil:

The software industry is amongst the most frictionless industries, yet the organizational lines are so rigid - its either "us" or "them", hence the genesis of the term "outsourcing". We (at Gridsolv) believe that the "global development" model needs to reinvent itself, through a network of suppliers (aka developers), akin to a global supply chain in the manufacturing industry.

A "Global Software Development Network (SDN)" allows multiple vendors to collaborate with the host organization to create an efficient global business process.

GLOOP is a collaborative platform, built by GridSolv to help subscribers realize the vision of a Global SDN.

The word "outsourcing" will be history, only when the underlying business model changes - and that change would require service providers to offer real differentiation through hard, reusable assets and not just talk about their "engagement model".

BMW may have an extensive supply chain, but the core engine is built by them and is not sold on the open market. In that vein, our flagship "asset", GLOOP is not available as a product, but packaged along with our "asset based services".

Girish in his comment says .. "if it is a wolf, you have to call it a wolf. I actually would agree with that comment. If "global development" continues to be practiced in the current manner, why bother calling it something else.

The challenge is for service providers to re-invent themselves and when that happens, all sorts of replacement terms will begin to pop up.

For now, we are going with a "Global Software Development Network".

I'd use "Distributed Delivery Model". The term "Distributed" implies there's a team involved, not a streambed change. And be assured, there will be components you can't outsource - requirements gathering, architectural plans, and all those Prince 2 documents you need to keep the outsourced resources on track. You can't outsource those, your your service provider will steal you blind.

Phil:

Having worked in x-sourcing before we had the name, I haven't found a term that makes potentially affected audiences feel any less threatened. I use "global sourcing", because it encompasses all the prefixes.

It struck me recently, while doing my first work with the US federal govt and defense sector, that government has been doing outsourcing for decades under the terms "contracting", "sub-contracting", and "third party procurement". They've developed a whole body of knowledge and expertise base that the outsourcing industry never really borrowed from, though it is at times over-engineered and can result in the proverbial $400 hammer.

To me, global sourcing is the leading edge of a shift to "global talent networks" and the "horizontal organization", but both of these terms are a little conceptual for the boardroom.

Good luck in finding a term that doesn't feel euphemistic and cynical. Unfortunately enough execs have used high-flying words to sell short-term, badly designed sourcing deals to associate "outsourcing" with fear and dissent among the rank-and-file, and I fear a rebranding won't change that.

Allan Tear
http://www.aptuscollaborative.com

Dr. Coase got a Nobel prize for suggesting the mechanics that might define a firm's boundaries. His work done in the thirties got him a Nobel prize for economics. It does not matter what this phenomenon is called - end of the day it is a classic "make-buy" conundrum that all organizations face.

If you really ask me, there has never been anything revolutionary or new about outsourcing to begin with and never a need to call it anything different. It is a pure make vs. buy scenario.

I know you are not looking for this answer(but this is my opinion):

If it looks like a wolf, sounds like a wolf, eats like a wolf, snares like a wolf and walks like a wolf then I think you should call it a wolf.

On another note if the term is giving such problems I can hardly imagine what the real actions generate ;-)

And you can always call them external solutions for inside opportunities ;-)

Phil:

I think that, over time, "outsourcing" will become obsolete as a term simply because a mixture of "local and distributed human resources" will be so ubiquitous.

I work in Internet consulting, and today I work with “local” colleagues across the greater LA/Orange County area. We regularly meet in person, but whenever possible we use IM, Skype and phones/texting to connect, allowing all of us greater productivity and time with our families. I also work on a weekly basis with colleagues in other parts of the U.S., from big cities to isolated rural areas, as well as those in Canada, Europe, and Asia. This arrangement allows me to pull together a highly specialized team with the ideal background for a client’s needs. It also sometimes allows me to save money, although that’s rarely the only motive for working with a remote resource. Frankly, it’s just more efficient than relying on the vagaries of the local job market to meet all my needs.

While all of us find it sobering to know that we’re competing with a much broader resource pool than before, that can also open up new opportunities. I only ask that, as businesses and as a country, we avoid working with business partners who fail to maintain a reasonable level of worker and environmental protections, such as prohibiting child labor, etc. Beyond that, work can and should be distributed to the optimal workforce, wherever it can be found. I think you’ll agree that “optimal” is rarely a question of cost alone, but usually more of an overall value measure that includes education, reliability, expertise, etc. Now, let’s just make sure that we as individuals, and as a country, qualify as “optimal” for the great jobs of the future!

Kathryn

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