Rightshoring Decision-Making Process
October 7, 2013
On October 4, 2013, Professional Outsourcing published a video interview with Sergei Levteev, IBA Group Chairman. In the interview entitled Rightshoring Decision-Making Process, Levteev shared his perspective of rightshoring.PO: Hello, Sergei. Could you introduce yourself please and your title and role at IBA?SL: I’m Sergei Levteev. My position in the company is Chairman of the Supervisory Board. It is clear that I’m responsible for all strategic questions in our company, namely finance, investment, and marketing policy.PO: Could you tell us a little bit about the services that IBA provides?SL: We are an IT company and our main direction is to provide outsourcing for different projects in different countries. And these are various services: from programming development to support of these programs, migration, and consulting. This is our main activity.PO: Ok. What is IBA expertise in outsourcing?SL: First of all, it is necessary to say that IBA was a pioneer of this business in Eastern Europe and now we fulfill projects on five continents in more than 40 countries already. The size of these projects that we are doing starts from a few people and is up to thousands of men/months. And duration is also sometimes quite big: from a few weeks up to a few years. We are covering by our services various platforms. During these years, we have really created partner relations with our major customers.PO: We are here to discuss rightshoring. What’s IBA definition of righshoring and why is it important for organizations?SL: In my point of view, mainly you should make a choice between different destinations. In the past, outsourcing was practically equal to Indians. Now, more and more understanding is coming that companies from Eastern Europe where we are present and have our main development centers can fulfill these tasks, probably with a bigger advantage for the customer. Also, it is necessary to add that different expertise and a high level of this expertise is present in Eastern Europe just now. And it is one of the advantages of this direction when you are looking for rightsourcing.PO: How should an organization approach the idea of rightshoring if they’re looking to outsource?SL: First of all, to look for references about an organization with whom you are in contact. IT outsourcing is not so easy, it is not so easy to describe what’s necessary to do. There should be some level of trust and this trust is coming from the reference of organizations that already have experience of working with such company. Second point is that it’s necessary to find the right expertise. You know, it’s not possible to cover all expertise that is present in information technology. Some companies specialize in one direction, some are active in another. And it is the right expertise that should be found in various proposals. Once again, I would like to add that some level of common understanding should be found between an outsourcing company and a company which is looking for outsourcing. It means that the same words, the same descriptions should be understood absolutely similarly. This is very important.PO: So, it’s quite a complex decision–making process then. It’s not just deciding on cost or vertical expertise or a region, is that right?SL: Sure. Of course, cost is very important because we are on the market and should be competitive. But it’s also necessary to understand what is behind this cost. And very important here is the reference that a service provider can present to the outsourcers. Also, it’s very important to understand that nobody can provide a full range of services and every company has some specialization. It’s necessary to find the right service provider who had expertise for years in a particular technology.PO: Finally what are the pitfalls around right shoring — what should organisations avoid?SL: First of all, outsourcers should understand that relations with a service provider will be different than with their own staff, especially when it is an offshoring service, which is the most economical type of outsourcing. An outsourcer feels that it will be absolutely similar, if he has no experience so far. It will be necessary to create such relations from the beginning. Second point is the necessity to pay attention to the items which are not written in the contract. For example, attrition rate of the service provider. We’re proud that in our case we have one of the lowest attrition rates among IT service providers. It’s also an important point that it is necessary to create common understanding for the terminology, for any words you are putting in the contract or any agreement. Sometimes outsourcers and service providers understand the same words differently. I think these are three major points in this case.PO: Thank you, Sergei.