The State of Sourcing

As a market to sell in or as a destination to outsource to, businesses across the world have been fascinated by China. The Chinese economy has relied heavily on exports – mostly contract manufacturing. Contract manufacturing here is a loosely used term. It encompasses everything from shoes, clothes, books, computer peripherals to machinery, heavy fabrication, automobile parts etc. It would be safe to assume, that every product out in the market has a Chinese contribution. Services might take longer to make a significant contribution to the economy, but once the population overcomes language issues, revenues from services are likely to increase.

This week, I came across an article that mentioned a few numbers about the publishing industry – which I think is indicative at best. While the numbers might be debated upon (and that would be welcome), it does not discount the fact that China is a strong contender – as a destination to outsource printing and as a potential market to sell in.

Continue reading ‘The Paper Dragon’ »

In our nationwide survey of ~400 Indian higher education students (for the EDGE report on online assessments), we had some interesting insights w.r.t attitudes about online exams.

Continue reading ‘Do students want to take subjective assessments online?’ »

With the publishing industry facing cost pressures, change in consumption patterns and struggling to sustain its revenues, it only seemed logical that the industry as a whole would outsource more. To truly understand how the industry value chain perceived outsourcing, we at ValueNotes Sourcing Practice decided to conduct a publishing survey.

To gain clarity on where the industry is heading, we needed to understand: Continue reading ‘Publishing Survey: Disparity in cost savings continues’ »

The LPO industry has not grown as fast as was had estimated earlier. The industry growth rate (CAGR of 40+% over 2003-07) dropped to 28% in 2007-08, and further slipped to 16% for 2008-09.

As the global legal industry suffered, the offshore industry could not escape the negative impact (although short-term). The slow down in the buyer market impacted the offshore industry resulting in a drop in the growth rate. Revenues from the offshore legal services industry were US$320 million for 2008 and are expected to reach $440 million by end 2010, according to a recent ValueNotes study titled ‘Legal Process Outsourcing: Crisis Creates New Opportunities‘. Consequently, there has been a shakeout in the industry. Over the last two years, >20% of the total number of service providers exited the LPO business. Is this an unusual situation? Textbooks of micro-economic theory talk about firms exiting an industry all the time. This is probably a live and recent example they can update their texts with. As profits diminished, smaller firms that could not take the hit exited. In an uncertain economy, mid-sized and smaller service providers are the worst affected by margin pressures. However, over-hyped prospects and ease of entry in this industry led entrants to believe that getting business would be easy. Few bothered about the potential risks or competitive dynamics, resulting in many weaker players fading away in the current environment.

In the current scenario, almost all offshore legal service providers are in fact, battling. While in some cases billing rates have come under pressure, in others the volume of work has shrunk. A pertinent question is, in this situation, which company is best positioned to sustain the growth? While the smaller businesses battle with survival issues, service providers with multiple service capability will be better positioned to weather the storm. ‘Multi-service capability’ will become critical not just for sustaining growth but also for the very survival of service providers! Incidentally, we have recently released the ValueNotes Sourcing Prism: Legal Outsourcing Edition that presents a list of service providers who are currently best positioned in the industry. Follow this link to find out more about the product.

As you may be aware, following the release of the ValueNotes e-learning offshoring report, we held an executive briefing to discuss the key findings with members of the industry, and also to facilitate Indian e-learning buyer-vendor interactions. The result was phenomenal, as Deepali blogged about earlier.

What we didn’t expect was the great response to the ValueNotes industry presentation, an integral part of the event. Since we’re still getting requests, we thought we should share a few of the slides with interested parties in the Indian e-learning space. And what better place to do so than our blog!

Continue reading ‘e-learning outsourcing 2009: Advantage India’ »

“How do law firms select their offshore legal service providers?” one of my colleagues asked me. Aren’t the fundamentals more or less same across verticals or segments, was my initial thought. I’ve seen my own marketing team ponder and debate on what might impress (and what might put off) a prospective customer.

Luckily, I had an answer for my colleague from the recently conducted ValueNotes survey of US and UK based law firms. The survey findings revealed that the strength of the management team, company reputation and end-to-end service capability are the most important criteria when selecting an offshore legal service provider.

Continue reading ‘How do law firms select suppliers?’ »

While the offshore legal services industry garnered a lot of media attention, the recent survey of US and UK based law firms conducted by ValueNotes revealed that less than 3% of the respondents had any past experience of offshoring legal services.

Initially, even I was intrigued by this finding. But when we started digging deeper, we found that a sizable proportion of the legal community has not considered outsourcing legal services to lower cost destinations. There is a low perceived benefit of outsourcing legal services amongst law firms.

Continue reading ‘Lawyers Shy Away from Offshoring’ »