Analyses of world-flattening trends in outsourcing, offshoring and the wider landscape of IT services are not exactly a rarity these days. But there is no lack of originality or dynamism in Global Services: Moving to a Level Playing Field, a joint study by experts in the field, Mark Kobayashi-Hillary of the National Outsourcing Association and Dr Richard Sykes, chair of the outsourcing group at industry association Intellect.

Of the book’s several rich themes, its examination of how business process outsourcing (BPO) is being extended to embrace the phenomenon of ‘knowledge process outsourcing (KPO)’ is arguably the most salient and engaging. Set to outstrip traditional BPO activity in coming years, KPO is defined by the authors as “a continuation of BPO…with rather more business complexity”, involving the provision of ‘value-added’ services, such as information analysis and decision-making, especially when those involve domain experience in a particular industry vertical.

The most crucial distinction to grasp here is that the emergence of KPO marks a fundamental shift in the entire offshore outsourcing model – a model originally predicated solely on the basis of cost arbitrage. Increasingly, argue the authors, cost-centric differentiation is becoming unsustainable for the majority of offshore IT services players due to creeping wage inflation and competition from more immediate near-shore players in regions such as Eastern Europe.

Moving up what is often dubbed the ‘value chain’ represents a natural (and necessary) progression for such offshore IT service providers with a developed infrastructure and strong client-relationships, argue the authors. In this model, however, the cost-saving of moving knowledge processing offshore can no longer be the service provider’s central business proposition: added-value has to become the mantra.

But if a vast range of business and IT tasks, once considered too specific, complex or proprietary to outsource, can now be delivered flexibly and efficiently on a remote basis, what does this mean for the modern company? The answer is a shift to a much-anticipated reality: the virtual corporation. Increasingly, organisations will be composed of decentralised, geographically dispersed groups of self-managed, often self-employed individuals, drawn together for a finite period, using additional IT services as a utility.

And how that will pan out provides the basis for a wide-ranging and engaging analysis – to say the least.

At points, however, Global Services over-reaches itself, making what are unnecessary and, on occasion, unjustified forays into grander socio-economic theory. The assertion, for example, that offshore BPO has provided white-collar jobs for “frustrated youths” that “in many cases” might be inclined toward “crime or terrorism” is as breathtakingly patronising as it is gratuitous. In this, and other such instances, the reader is left with the distinct impression that too many ideas have been shoe-horned into too small a space, with the regrettable result that not all emerge fully-formed or with their relationships to one  another clear.

Such lapses are forgivable, however, in what is an otherwise well-researched, lucid and at times highly absorbing discussion. Kobayashi-Hillary and Sykes succeed in challenging many of the established presumptions and myths that continue to surround the often-controversial subject of global IT sourcing. As such, they have compiled a valuable, thought-provoking resource for any organisation working with an IT services budget – whether a provider of IT services or a consumer of those services.

Further reading

Tif to benchmark IT services

Expert opinion: how to know what you’re paying for

How Capgemini embraced India

Top ten Indian IT services providers

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