Here is an unofficial summarized translation of the article…

Nearshoring : KVB has found help in Eastern Europe

It’s been 6 months since KVB decided to outsource part of its developments to Romania and Poland. The CIO explains this as a reaction to the need of improving their flexibility and agility. “Our needs are two times bigger than what our internal competences allow us to accomplish. In the past, we have appealed to German partners to help us surpass this problem. But we had to cut down costs”. KVB was looking for a solution that would not only lead them to make savings, but also allow their employees to focus on high-level tasks in their core business.

Nearshoring rather than Offshoring

The possibility of an offshore solution was quickly put aside, because it seemed very difficult to work with people from another continent, given the branch specificity and terminology. “The time difference might have been a problem, which could have lead to an increase in our overhead costs”.

The situation is Europe is different. The geographical and cultural proximity greatly eases communication, but the linguistic barrier remains. In order to avoid mis-interpretations, we have decided to use only German within the project. “This may sound a bit unusual, but it is the only satisfactory solution for us”, the development manager explains .
The terms of the German health system are very specific, the legal texts are nationally “customized”, and they only exist in German language, concerning only professionals working in Germany. “It was obvious that communication in English would have driven to many errors and approximations. Certain words would have been impossible to translate”.

However, German-speaking collaborators are not easy to find, not even in Eastern Europe. The market is highly competitive, we have to fight against multinational companies that employ all engineers on the spot.

In order to limit the risks, KVB has decided to split the projects between two countries: one service provider in Romania and one in Poland. “A polish IT engineer costs us EUR 50/hour, but we expect him to speak German and to bring an expertise in architecture. In Romania he costs us EUR 25/hour, so we are less demanding. For now only the team leader speaks German and the rest of the team communicates in English. This is enough for the technical part of the project. The team leader translates wherever necessary and this works fine.”

Finding the right partners

The size of the company was a main criterion when choosing the service providers. “It is important to communicate with our partners on the same level; the company has to be able to support our growth. Having the opportunity to act on the choice of team members, by conducting together individual meetings, was also decisive. This way we would make sure the service provider allocates us the most suited persons. ”

For the CIO of KVB, long-term project planning and building partner and worker loyalty play an important role. At the beginning of the project, KVB has invited the Romanian and Polish teams to Germany for one or two weeks, so that they integrate with the team in Munich and become acquainted with the necessary project-related information. “We have thought about keeping one nearshore team member at our location throughout the entire project, but travel and accommodation expenses would have nibbled away our outsourcing savings. Still this would not have been very useful in the end, as communication between Germany and the nearshore premises works really well.

Internal tensions

“At the beginning our employees were really skeptical. To them the foreign workforce seemed threatening for the success of the project. But at the same time they were aware that we needed additional resources”, recalls the development manager. KVB based its strategy on an open internal communication that would dispel these fears.

The importance of communication

“Project managers were afraid that communication with the virtual team might not work. These fears were well-founded, considering the high agility level we require. Their perceptions were then swept away: deliveries came on time and the nearshore members came up with new impulses in the projects. The German personnel is very pleased with the results; they even demand the participation of the nearshore teams in other projects”, says the development manager. “This is an opportunity for them to acquire the necessary knowledge in the context of globalization”. Managing relationships with multiple service providers develops additional competences. “A nearshore project does not mean less work; on the contrary it implies higher demands. The new tasks are more diversified and bring about more responsibilities.” This is what motivates the personnel.

Positive results

KVB has now gained some experience and even though there are certain adjustments to be made, the results are encouraging. “We can already see the positive effects of this collaboration and we will probably reach the nearshore objectives set for the end of 2009”, highlights the DSI. In the upcoming months, Romanian and Polish specialists must intervene in other domains, such as datawarehouse development and the teams should reach a number of 10 members in each country. The CIO concludes: “We believe that the current projects will lead to a long-term collaboration”.

But it is even worse in the offshore business. I know dozens of companies that employ less than 10 persons, using the same photo galleries as big-sized companies’ websites and thus end up resembling them. They are kind of cheating. I love the Minsk or Bengalore-type company websites showing a tall, dark-skinned, female consultant, next to an Asian IT manager and two Wall Street bankers… Eventually this emphasizes that we are different and shows the reality of our forces, either to potential clients or to our employees. Especially in the offshore business, companies have to prove their human and social reality. Also, it is a means to give all our potential clients the possibility of building a real offshore team. The videos, when available, may also help. Finally, I am considering the idea to organize some sort of Pentalog social network, made of all the personal CVs of our team members, linked with each others by practical case studies, and to find this network among the most accurate public social networks, as a group of skills. We are not far from this now.

Business has been going well. A series of new deals have been signed: in Germany with LHS, belonging to the 5 biggest German software editors and number one on the global mobile phone invoicing market, and in France with NG Travel in the tourism industry and finally with Mousset in the logistic sector.

Following these quarterly results, the annual growth will be of about 60% with a sales figure of EUR 8, 5 - 9 M, whereas the annual growth objective was 30%, which means the group achieved twice the expected results.
Pentalog has also been granted a “Deloitte Technology Fast 50″ 2008 prize.

The Vietnamese branch may not have a significant contribution to the turnover until the second quarter of 2009.

One from Brasov, the other two from Hanoi. And when I think I had to go to the other side of the planet to meet this guy!

I promise I will reveal some other surprises on this guy! One true revelation we have had during a podcast made on Highway 4 in Hanoi (where you can eat fantastic roasted grasshoppers with ginger).

Monica vs. the grasshopper. Who’s going to win?

These 3 know each other for 5 years. Even before Monica joined the Pentalog team.

Monica and I, we discover the Vietnamese transportation.

But above all, I like the fact that Tri comes from Saigon, already foreshadowing Pentalog Vietnam based on a mature and balanced relation between the Nord and the South. The fact that our second collaborator comes from the South will facilitate our establishment/presence in Saigon, this 9 Million-inhabitant megalopolis. I love this city. We will also open an office there as soon as possible. I would like to thank Duc, Zhui, Quang, Maxime, Hanh Nhi and the Brazilliers for their hospitality. In fact, the more I think of it, I can only agree with Monica on the excellent Saigon cuisine, which is amazing!

The minutes pass and so are my fingers over my keyboard. I enjoy all these surprising images that struck my retina and also my lungs. I feel the warm humidity deep in my throat even if it is only 6 a.m. Still, Fred tells me that this time it’s cooler than the last time. I feel the tropical scents, the smell of all these mopeds I have heard about, that pass by like some mechanical river. The locals never stop, always on their small mopeds; the traffic is always acceptable. They infiltrate everywhere, but without any aggressiveness. Practically, no vehicle runs over 50k/h.

Afterwards, we had a series of meetings: companies, universities, students and our first intern! Fred will tell you more about him in another post.

In other words, I haven’t felt the shock in a negative way.

I was very impressed by the VNU (Vietnam National University), by the quality of its technical platform, the tidiness, the condition and the design of its buildings. All this is far different from the decay I am used to in the Eastern European Universities, where I have studied, taught and that I currently work with. What about the meeting with the students? I have been told they will be practically mute. The truth is that they have asked dozens of questions about our internships and our projects in Vietnam.

See, I expected a shock but it did not happen. Perhaps it will, but later. For now, all I can say is that life in Saigon has a very special flavour. Those who know Fred, may imagine that it won’t take long for him to find the best places to experience the local lifestyle. Well, believe me, there are many possibilities. We ate Nems with foie gras, lobster ravioli, scrambled eggs with truffles, sautéed tournedos garnished with foie gras and tuna, sublime wines from Burgundy and Rhone, raspberry millefeuille, a 5-dish variation of beef. In one of the three excellent restaurants we ate at, we have paid less than for a pizza and a beer in a restaurant in Colentina, Bucharest! For a two-star restaurant, according to Michelin guide, that is to say something that does not event exist in Bucharest! But in Saigon there are plenty. In my next post, I will tell you about the local cuisine and about my new friends, the spices. Those who know me know that I would leave the table if someone plays with a pepper.

What can I say about the Caravelle bar situated at the 9th floor of a building as old as the French colony, which overlooks a little bit the dome of the building occupied by Louis Vuitton. A real cocktail of France, saffron, warm rain and city lights …

We are now in Hanoi, where I am going to spend many months next year. I’d like to thank Frédéric for reviewing this post.

The launch of the Vietnamese project was entrusted to Monica Jiman, the Eastern Europe Vice President, manager of the Bucharest office and in charge of operations and business development there since 4 years. Monica will transfer the Pentalog way of working to Tuan Nguyen Quoc, who has been chosen to manage the Hanoi agency. Tuan Nguyen Quoc has a Master’s Degree from Paris Dauphine. He is an English-speaker. Monica Jiman, who graduated from the University of Orleans, will spend 6 months in Hanoi. Pentalog will also rely on its Romanian and French project managers and developers to ensure the project’s consistency with quality standards of the group.

Pentalog Vietnam is integrated into Pentalog’s Right Cost policy, which was launched 9 years ago, and brings the company its first « extreme low cost » capacity. Vietnam is probably the most competitive country in the world in terms of quality-price ratio. We will probably hire 50 Vietnamese active team members before the end of 2009. With 25 employees in France, 260 in Romania-Moldova and 50 in Vietnam, Pentalog should be able to offer the best cost-ratio available in Western Europe (92% of the team members are based offshore-nearshore). Many additional cooperations relying on the Romanian hub should be launched in the following months.

Frédéric Lasnier, Pentalog CEO quickly describing the objectives of this project: “to offer the Pentalog service quality, meet our clients’ growing needs, set up our training programme, with a price of EUR 100/day for a dedicated team, in other words a 40% discount to our average rates”.

For its part, Pentalog is the leader of offshore/nearshore IT services in the Eastern Europe with more than 250 engineers on 4 production sites in Romania and one in Moldova. The group relies today on 295 collaborators.

The two groups maintain their partnership since 2002. Thanks to this alliance, Acticall will have the benefits of Pentalog’s expertise on the Eastern European countries (Pentalog is also present in Ukraine for consultancy activities). From our point of view, Pentalog will strengthen its BPO Business Line activities (contract management, content management, financial and accountancy operations…). The new company will be based in Chisinau, Moldova, who, thanks to the exceptional multilingualism (Russian, Romanian, French, English, Italian, and Ukrainian) caught the attention of the two partners. This joint-venture, named “Acticall Eastern Europe, a joint venture by Pentalog and Acticall” will be supervised by Pentalog’s executives. At present Pentalog is the 5th IT outsourcing player in Romania and the 1st in terms of expansion, with a 100% growth in 2007 and 2008.

A number of our colleagues, Romania and Moldova, working for the U.S. or the UK (countries with an already major offshore maturity), know it. What should do the IT specialists in order to prepare themselves for the crisis? I see two key strategies: choosing an employer who knows how to manage his risk portfolio and to upgrade his versatility.

1. Choosing an employer with a strong commercial dynamic: many projects, many clients, frequent opening of new projects, multiple geographic origins, avoid companies too specialized or sector niche. Prefer outsourcers to software editors. Choose multi-specialized companies. Prefer a developing start-up on non-mature offshore markets (France, Germany, Scandinavia, Austria, Switzerland, Benelux..). Does this remind you of such a company? However, I truly believe in it. It’s an old technique spreading the risk. Although probably no sector will be spared by this crisis, some are more concerned than others.
2. Be more versatile: the IT specialists from low cost countries are often specialized to idiocracy. They are frequently trained by Microsoft during University (through partnership programs). They are often convinced that we can not be Java when we are dotnet or otherwise. Often they confuse language and technology. We recently had to let go two people REFUSING Java training. Can you believe it? An IT specialist saying “no” to training. As if their whole career will use only one language! Or that being trained to Java will exclude them from other Microsoft projects! I am on my third economic crisis since the beginning of my career. The one of 92-95 (after a burst of real-estate bubble), the one of 2002-2004 (the Internet burst bubble). We innovate today with a banking crisis. All I can say to everybody is that those who have crossed the most difficult years were those who knew best to move from one folder to another, no matter the language they used. It’s pure arithmetic, since there are fewer projects, we must be more agile to be part of it. We don’t choose a language as we were choosing our religion. Personally, I am very proud that I can speak French, English, German and Romanian and this allowed me to multiply by 3 the geographical origins of our client projects and likely to increase by 3 the commercial signatures. It’s the same thing with Java, PHP or Dotnet. Knowing several languages is certainly a way forward to the positions of manager and management techniques. Add that what I say about the languages may also be extended to different specialties: DBA, Business Intelligence …

The question now is at what point would the economics of IT offshore be affected by this storm, but its violence has surprised many countries in only a few days. Its spread is staggering. Therefore, it seems more appropriate to prepare before being affected! We belong to a profession that eludes most of the time more unemployed than others, but you must know that this rate has exceeded 10% for several months in the early 2000s! Offshorers, nearshorers, developers, analysts, administrators, let’s prepare for the storm! Maybe this will scare it off!

Officially, they say that this change is made in order to adapt to the changing IT markets and business expectations. They avoided referring to the number of exhibitors which, according to an exhibition neighbour attending this fair since 2000, was divided by 2 in a few years and the number of visitors (I have noticed myself and I frequented this show only the last 3 years) was constantly falling and so it was time to innovate a bit.

It is well known that the decline of interest in this kind of event is a general trend, partly because the site was right for them. But I think that it comes also from these events themselves. The firs time I went to CeBit in 2006, I was outraged by the impression of “fair”, in the negative sense, that the show left me. A noisy and colourful spectacle that seemed more for the general public than for the professionals. Without a stand of minimum 200m2 we were soon flooded in the mass. The SYSTEMS fair seems to have a more “pro” orientation, but it is obvious that this several decades old event needs a make-over.

All this to say that I find it unfortunate that trade show are losing so much speed. They are always a good opportunity, beside systematically providing new customers, to observe the competition, to listen to the clients’ positive or negative stories they have had with their offshore providers, brief to observe the market in order to be able to adjust our marketing strategy in order to fulfil expectations.

I’m curious and eager to discover the new concept that München Messe will propose for the next year. And I hope that the delegation representing the nearshore Romanian professionals will always be in the game.

- the Asian location will complete the group’s marketing position
- it will bring additional benefits in terms of production costs compared to Ukraine and Romania
- Vietnam enjoys great political stability
- Hanoi disposes of a very good education system and is less glutted than Ho Chi Minh City
- the country has understood the importance of having very well-organized high level academic courses, all over its territory, through international partnerships
- Vietnam already has 3 investment poles of great interest for our future development.

About this last point, I believe that a second Pentalog office will be set up in the near future in Ho Chi Minh City. I am expecting it for the the beginning of 2009. Ho Chi Minh will also remain a luxury alternative in case of difficulties with our office in Hanoi. Of course we are definitely not closing the door to Ukraine, a country that is so close to us, but we consider that the Ukrainian people must urgently solve their political and financial problems if they want to attract new investors. I cannot expand in a country that hinders circulation of capital and has shut its eyes for 2 years to the crisis that was obviousls threatening it.

Back to our Vietnam project, we are going to get back in touch with the persons we met, the persons we have been talking to and those we are going to recruit…

Pentalog’s business model made the company one of the most innovative, solid and fast-growing-ones of its sector in Europe. Always one length ahead of its competitors, the group managed to make its offer evolve quickly in order to meet market evolution and seize new business opportunities, as well as to assert its position in the cities and countries where its offices have been set up. I think we can say without blushing that we have achieved a “global”
position in terms of service range, and we are now on the way to become a global provider from a geographical point of view also.

To sustain our expansion and growth objectives we expect to achieve in the short- and mid-term, we need to set up strong partnerships with IT companies accross countries where Pentalog has already started developing business relationships (Germany, Austria, Belgium) but also in new areas where we feel the Pentalog model may be successful. We think of countries like Sweden, the UK, the Netherlands, the USA, hosting top-edge mid- and big sized companies in the IT service sector. Those companies could find in Pentalog the ideal leverage to develop their offer and market shares in offshore IT outsourcing. The current financial and economical context is likely to lead more companies to turn to offshore to remain competitive. This should generate all the more new opportunities for outsourcing vendors.

In 2007 we already set up an R&D department through our joint-venture alliance with a French company that enabled us to improve our expertise in embedded systems, and now representing an important service range in the group’s activities (18% of the group’s turnover). In 2008 we created a commercial branch in Germany and gained 10 new clients since then, within 6 months. We are now about to create a new development centre in another country. We really have gained substancial experience in company creation projects in foreign countries, managing cross-cultural relationships with our partners and learning a lot out of it. We are definitely ready to apply our model on a much larger geographical scale now, involving new languages, new technical skills, new time zones, new climates…

I feel the coming months are really going to be an exciting period for all Pentalog team members involved in the implementation of the company’s international growth strategy. I am delighted at the thought of the Europe map on our corporate flyer turning into a world map with plenty of new dots standing for all Pentalog locations!

So if you think you are one of these potential partners we are looking for, please contact us

I took the liberty to resume Fred’s first impressions about Odessa and also to state my own ideas about this second day of our trip.

The second day at the Odessa University gives us a more optimistic picture. Anyway, I wasn’t 100% agreeing with Fred. As an ex-professor at a Romanian University I profoundly disagree with any discourse so unconnected to the students’ interests. Being a teacher, as any other job, implies sticking to the rules. In those labs we visited yesterday, we saw that the professors were involved and they were putting the students’ interest on top. Furthermore they express a highly international openness. Still, as I have already seen in some other Ukrainian cities, the linguistic skills are not sufficient. I mean the students’ skills, who don’t sufficiently manage international languages, which restricts international university inter-connection. Anyway, I admit that Ukraine has big potential.

While I was writing these lines, Serghei informed me that the Ukrainian financial system is about to go bankrupt (Petru is attending a mission in Kiev for an important bank). In theory, the banks stopped refunding deposits and no money leaves the country. This is one more reason to re-think our future strategy.

The meeting we have had this morning with the teachers made us a little bit circumspect. It is quite clear that some Ukrainian cities are still looking for their IT models. We mention our training needs; they propose an association with our production structures. The professors from the LLC are clearly not fairly paid by the local system. They hope to see the day of an association with Intel, Microsoft or I don’t know who else!

Well, I have already seen this happen. Half of the teachers from one of our locations are paid by Siemens (while the DHR of Siemens is a university teacher), on some other location is Continental who rules and on the third one is Nokia. And we cannot blame them. Eventually these “collaborations” are positive. In some cases these collusions become too aggressive. I know a case where a company tries any form of pressure on the competitors, a company with an outstanding ethical chart, with any doubt. Tomorrow we will spend some time with the students and we will try to make an in-depth analysis of the difficulties the local professors encounter. We really want to help them, even if this was not the reason for our trip.

Before leaving tomorrow for Odessa, I took this morning a little tour at the wine festival. That was 3 years that I systematically missed it. Not very successful, no tasting of fine wines. Too bad for them, because I bought only 3 bottles, whereof one of Moldavian ice wine. Again, I took two pictures.

I couldn’t have waited to make this trip for several reasons. First, because the ideas clash into fertile “little big bangs”. I want to expose fresh ideas and then to announce which will be the next implantation of Pentalog on identical analysis bases. I’m sufficiently familiar with Ukraine at this moment. The strong points of these two competitors are extremely different:
- dispose of an Asian position or not
- proximity / change of continents
- cultural unity / cultural rupture
- 1h / 5h of time-lag
- 600€ / 500€
And finally there’s the sheer provocation, which is very important… I’m sure you’ll agree.

We just hit the low end rates. We just hit recession. Several major banks will disappear with the cash. The consequences on the IT sector will certainly appear in a few days or weeks. From now on, the banks will build their success on emerging economies only.

European governments, especially French and German, must quickly liberalize the economy if we don’t want to fall into confrontation with Asia. We don’t get rich, we speculate. The proof of this is this stupid real-estate bubble created by low rates. Far from me the idea that Asia doesn’t speculate, on the contrary, it gets wealthy.

The offshore sector will also be affected, at least those who work for the financial world (India is already particularly affected). However, there is still much to gain on industry and non-financial services. Perhaps the ratio between the prices growth and the offshore costs will reverse due to unknown context? The small countries are already affected by the monetary consequences. The Romanian Leu collapses, restoring the Euro-Dollar competitiveness.

Anyway, this crisis is not too convenient to anyone. The weeks to come, we should be extremely aggressive, conqueror and proactive.

Vietnam Airlines tomorrow night.

This contract doubles the actual operations volume we had with Germany. This contract will bring more than 1M€ per year. For now, I don’t know if I can reveal the name of the client, but let’s say it’s one of the major software editors in Germany. In several months, this contract will gather 20 to 25 persons.

Monday in Hanoi I found out that France Telecom plans to open a Technology Centre in Vietnam. The spot is hot!

What else? Oh, yes, the Vietnamese offshore works as the Indian or Romanian companies did ten years ago. The surplus seems to be widespread. And the managers are surprised to see the turn-over! This is not a good example. The best of them give up, while the average gets in a rut. The best company, we had the opportunity to visit, has a charging staff of half of the total. It is a widespread model and the owners of these companies hope to give to their employees a general training at the lowest cost. The result is awful, because away from retaining their staff, they give a wrong idea about the productivity. It’s not the proper thing to do. We have had this problem since 2000 in Romania. Today, if we want to reach Vietnam, we will demand the same productivity ratio.

It is obvious that if we confirm this location, in a few weeks, we will have to replicate the model of Pentalog “nursery”. The challenges of communication between the European management and the local work force will be very consistent. A company that does not succeed in breaking the ice with its Vietnamese team would have no chance in reaching the levels of communication essential to respect the quality in our profession. The cultural factors are clearly crucial when moving to a country still living with the concept of “generational classes” and that seem to still show a certain mark of respect to the white people.

Hanoi has the charm of a provincial town increased by the architectural structure and effect of a capital. I just made a reservation at a restaurant which claims to have 1000 oenological references!

Both cities have decidedly different advantages – How can I tie?

You don’t have to go to Saigon to see something, because there’s « almost » nothing to see. We go to Saigon for the rush and the atmosphere: suffocation, fun, speed! The people of Saigon “are” the richness of the city. We must see them live, eat on their small stools in the streets, selling you certified copies and certificates of authenticity for replica watches (a treat for the gourmet salesman), see them on their motorcycle waiting for the green light, like at the Tour de France.

I love this city. It reminds me of others that have nothing in common. It’s true that as older I grow, as more I love the speed. If I stop here, I feel that we are going to get this speed.

We are moving and our planning is rich. I already see the criteria for a successful location. Everyone talks about the turn over, but we have seen others in the Balkans. It is certain that Ho Chi Minh is a two stages settlement: local and offshore. A city of 9M people will not remain just an offshore place. The question is how long will it take to make this link? Maybe we should combine (as Bucharest until 2006)?

At this time, what worries me the most, is the mobile operators difficulties (the interconnection doesn’t work for several hours each day and the “Edge” continuously disappears, this is bad. This reduces by half what we could do in mobile telephony, if we don’t have the opportunity to test it. The Internet seems somewhat less problematic… if we have at least 3 providers.

In terms of resources, I begin to believe.

To be continued…

Post office with the picture of Ho Chi Minh
Notre Dame Cathedral

At Chisinau 3 we think big because we are going to double our number of potential openings. The office has 1000 m2 and it can accommodate more than 130 people.

Our office from Chisinau is the only one covering at 100% our offer of “Embedded systems”, “IT systems and software” and “BPO”.

It could also host the headquarters of a new joint-venture, developed with the second French operator of the call-centre market in order to provide solutions in French, Italian, Russian, Romanian and German languages. Its main domain of activity will be the multilingual technical assistance.

I will give updates about this the weeks to come.

Meanwhile, I wish godspeed to this new flagship of our Eastern fleet, its captain and all the crew!

In addition, the Pentalog in Chisinau (Rebublic of Moldova) is at a 2,5 hour-drive from Iasi and the two sites collaborate on several projects. Iasi is located in the ancient Moldavia. So there will soon be 200 of us in this region split between two countries. For now we are 265 people, among which 105 in the two parts of Moldavia.
Next week, it will be the turn of Pentalog Chisinau who will leave Puskin street, to double the office surface as well, in the framework of the 14-2010 plan.
I want to thank the support team of Alex who enabled the 35 Iasi people to start working in the new office without any technical problems. Good luck for next week in Chisinau!

This piece of news is likely to further strengthen the recently established partnership between ST-NXP Wireless and Pentalog Technology. Our Bucharest-Sibiu platform is clearly part of the greatest European adventure in industrial wireless technologies. It may even be the greatest European industrial adventure of the last 5 to 10 years? To be continued…

So, do not hesitate to contact me, either via a comment on this blog or by email through Viadeo, Linkedin or Xing.

After almost 2 years experience with BPO, I thought it would be useful to drop a few lines on the subject. Everyone wants to do BPO and to take its share of the cake, considered as particularly hearty. And as someone told me not long ago, “BPO is easy”.

I would rather say that it depends and that it could sometimes even be very complex. The process can sometimes be composed of so many successive steps, that each sequence might need to be validated and that it is sometimes necessary to call on for a specialist for this.

So, without any doubt, a company that does not have a well-trained team in terms of process management will get it wrong.

What would be then the ideal organization to manage process outsourcing properly?

I believe that it has to combine at least 2 control levels:

1. Middlemen: each intermediate step must have its own control level (probabilistic or exhaustive).
2. The final level: specialists who know what results should be achieved. The method could either be based on a global assessment, if the process allows it, or if not, on sample assessment.

When producing BPO operations, the organization cannot tolerate any bugs on the tools or the organization anymore.

In the end, how can you expect a BPO team to know French tax shelter, Photoshop, German labour laws, Liechtenstein’s geography or any other thing that they have to deal with? You cannot and you should not count only on the operator himself when the work load becomes too big.

So, before you start a BPO operation, you should check that you have set up the right controls and that they are in the hands of the right persons. For outsourcing a process means industrialization and acceleration. If your controls are not right, your team will make systematic errors in no time. A serious BPO operation without strong management is simply impossible. Any takers?