A new model for outsourcers: Outsourcing their work

The 'business model' sounds interesting, though it seems to be yet another version of the 2rentacoder.com and Guru.com model. But there again, whatever works; right?

This is not a very revolutionary idea, and there are big problems in trying to scale this model.

Most small companies that claim to provide any service their clients want, resort to this (albeit not in an open form). I have driven this model myself years back as a business development personat a small IT services co. We ended up offering (succesfully!) services in FPGA & PCB design, SAN consulting & implementation, advanced C++ imaging engines, superb J2EE development, domain expertise in bioinformatics & cheminformatics, and finally, 24x7 call center & product support services - all to one client & with a total employee base of around 80 people, 75% of who were working with other clients already!!!! Beat that! :-)

The model worked beautifully, but we stumbled badly when we tried to scale it:
1. You CANNOT get extremely diverse teams working for different employers to work as one team to deliver a single project or process - no SDLC process is mature enough for this, even with the great collaboration tools we have today
2. The 'partners' always have their own business priorities. They will lie to you about resource availability & make up stories on fictional clients/projects just to avoid giving you the people you need as a virtual outsourcer, because they need those same people for a more lucrative or a more important relationship
3. Too much financial risk - managing the market & the employee pool as one entity is tough enough. Need I say more?

But, all the best to the team - always worth exploring ways to undermine these monolithic firms that we have started to refer to as private government office in India ;-)

Cheers!

Hi Steve, What does Antara Solutions do exactly ?

I think it is a situation play, that can be best handled by the program manager in the source company. Per the strengths and credibility of the sub-contractor, he can assign either one of the lead company as integrator or do it inhouse.

I agree in part with the issues listed in Vikram's 3 points above, having encountered these myself as the Executive Director (Asia-Pac region) of a large American IT company. However, having met with the Anantara management team, I am convinced they are well equipped to handle these issues. GB Prabhat is very clear on Anantara's goals, strategy and execution, is a brilliant leader, and, I believe, also competent to deliver on the 2 challenges stated by Steve. His team is equally passionate and committed to 'Second Generation Outsourcing' and are well aware of what it will take to succeed in this market. This company is poised to take on the 'monolithic firms' in India and should be on the Watch List

I tend to agree partially and subsribe to the comments of vikram on SGO.H/ever large monolithic organisations that are established in India in this industry can become very hard to manage over a period of time and alternate business models will have to eventually emerge to mitigate the risks that these organisations and their customers face. SGO gives one the freedom to benchmark the very best irrespective of the Geographical differences and provide the very best solution to the customer globally.

There are people who can sell icecream to an eskimo and vice-versa. With the best of products Apple could not reach where it should have and with products I need not speak about, Microsoft is world over. When all elements work together and as envisioned, success would happen. Neither easy nor impossible...

My personal belief is that the model should definitely work fine if planned and executed properly. In fact the recent huge outsourcing delas from major companies like GM opted for a multi-vendor concept to leverage the efficiencies The initial challenges ahead are:

1. Developing a quality capable supply base partners (quality systems and certifications are very important)

2. Ability to manage the Eco-system partners during the project (the operational level difficulties like resource planning, attrition etc)

3. If an overall business solution is put in place after combining the individual solutions (technolgy/process) from business partners etc, the ability to support, enhance and scale up the solutions as a single entity.

4. Building the confidence with the client about this radical change of outsourcing.

5. Ability of the partners to scale up and provde the same quality of service

Compared againt the odds if the model is successful:

1. The virrtually integrated model will provide the best solution at the lowest possible cost
2. Change the dynamics of outsourcing by customers
3. Cusotmers can get a good ROI
4. Flexibilty to scale up and down
5. Create more niche players as they see value

Hi! Steve,

Even though Antara has the advantage of choosing from many of the specialist firms, One of the critical success factor in this kind of a model is to select such firms who reciprocate your views and deliver high quality output. Further you are depending completely on many diversed outsourced partners, in delivering results w.r.t each engagement,hence you not only need to master the art of managing the projects but also managing your partner firms confidence in Antara.

Those who posted comments, how many of you have worked / are working for Anantara? As per Steve's message this is very innovative and insightful methodology and I see several experts commenting about the model with deep understanding?

hi! to everyone...this is an superb model, its already an success, now the company needs to stabilize and establish its presence in more countries...i wish them all the best to take-over huge IT giants...

Steve,
I stumbled upon your article as I was researching this company as part of my work for a resourcing firm. It is about a year since you published this 'newsworthy' outsourcing model. I'm pretty sure they have serious doubts in an eco system approach. They have been hiring so many tech resources that they are probably building more inhouse and outsourcing less. Time to revisit Second Generation Outsourcing?