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Services Shift, The: Seizing the Ultimate Offshore Opportunity

By Robert E. Kennedy, Ajay Sharma

Published by FT Press

Published Date: Jan 9, 2009


“Kennedy has artfully integrated the phenomenon of offshoring services in the global competitiveness agenda of firms. His insights on the key economic drivers and trends paint a picture of the potential and the pitfalls of this phenomenon. No manager can afford to ignore this shift. All managers may want to read, understand, and ride the competitive benefits of this shift.”

       —C.K. Prahalad, Paul and Ruth McCracken Distinguished University Professor, Ross School of Business, University of Michigan, author of The Fortune at the Bottom of the Pyramid


“This is a must read guidebook for business leaders who want a global competitive advantage. The Services Shift not only maps the current terrain, but more importantly, provides where the world is headed and what it will take for businesses to win tomorrow by globalizing services. This is a well researched book with very practical lessons for winning the offshoring battle.”

      —Noel Tichy, coauthor (with Warren Bennis) of Judgment: How Winning Leaders Make Great Calls, and Professor of Management and Organizations at the University of Michigan Ross School of Business


“Global Sourcing of Services is a powerful source of competitive advantage as economic borders become thinner... Kennedy pulls up the curtain and explains the what, why, and where of offshoring. His work with both providers and customers illuminates both the potential and the challenges of global sourcing. The Services Shift provides insights on the shifting business paradigms. This book cuts through the rhetoric and provides managers practical advice. A must read!!!”

      —Anurag Jain, Managing Director, Asia Pacific; President for Applications Solutions (AS); and President of Insurance & Business Process Solutions (IBPS) for Perot Systems


“If you found that Tom Friedman’s The World Is Flat raised interesting issues but didn’t connect them to your business, The Services Shift is for you. It appeals to both the strategist and the practitioner. It covers the range of key impacts when services shift offshore—economic, social, political, organizational, and the human factor—talent. Kennedy [and Sharma] have written an excellent book, clearly written by practitioners and not academic theorists. It is also extremely practical, with penetrating insights into the firms leading this trend, and real tools to help you analyze your business processes. The Services Shift is a comprehensive, thoughtful, and immensely readable book. I recommend it for every manager who faces global competition.”

      —Mark Hodges, Chairman and Cofounder, EquaTerra, Inc.


“With the air thick with debate about ‘shipping jobs overseas,’ ‘offshoring,’ ‘race to the bottom,’ and ‘outsourcing,’ The Services Shift could not come at a more propitious time. Bob Kennedy’s book offers both a thoughtful and practical treatment of this critical phenomena, which will only accelerate in the coming years, especially in the services sector. Whether you are a corporate manager, a government policymaker, or a labor activist, you will find this book useful in making the globalization game pay off for all constituencies.”

      —Stuart L. Hart, S.C. Johnson Chair in Sustainable Global Enterprise, Cornell University


By now, most business people, pundits, and politicians in the United States and other developed nations have come to grips with the phenomenon of manufacturing jobs moving offshore: The process is variously referred to as “outsourcing” or “offshoring.” But a far bigger wave of change is approaching the shores of those same developed nations: the globalization of services. Where are the jobs going? Which companies benefit—or could benefit? How exactly does services offshoring work? How do you “get in the game”? Who makes a good partner?And what are the policy implications? The Services Shift answers all these questions, and more, offering powerful insights for managers, public policymakers, and citizens alike. Leading researchers Robert E. Kennedy and Ajay Sharma reveal how services offshoring works in both industries and individual companies, and show how to define and implement realistic services-sourcing goals for your organization. You’ll learn who’s involved in services offshoring, understand leading business models, and tour the main geographical centers—from China and India to Hungary, Russia, Morocco, Brazil, South Africa, and Mauritius. Drawing on detailed interviews with participants, the authors review the management skill sets associated with successful services offshoring. Next, they assess policy initiatives in both developing and developed countries, including U.S. proposals aimed at restricting the offshoring of services. Finally, they preview the newest trends in services globalization, helping you prepare for the world as it will be—next year, five years from now, and in a decade.


     Services offshoring: what’s different, what’s the same?

     How the offshoring of services resembles the offshoring of manufacturing—and the important ways it differs


     Defining a realistic framework for services offshoring

     How to set clear goals, define what to offshore, and then execute successfully


     Touring the offshore universe: models, locations, activities, and beyond

     Understanding all your options—and their tradeoffs and implications


     Understanding the broader political and economic implications

     How governments are likely to act—on both ends of the provider-to-consumer spectrum—and how that will impact you


Table of Contents

Acknowledgments  xv

About the Authors  xix

Introduction  1

Chapter 1: Globalization of Services: What, Why, and When  17

Chapter 2: The Economics and Drivers of Offshoring  49

Chapter 3: Making It Real  89

Appendixes for Chapter 3  135

    Appendix 3A  135

    Locating a Task on the Process Decomposition Compass    

    Appendix 3B  136

    Assessing the Feasibility, Value, and Risk of Potential Outsourcing Efforts

    Appendix 3C  138

    Assessing the “Offshoreability” of Potential Tasks and Processes

    Appendix 3D  140

    What’s Typically Covered in an SLA?

Chapter 4: The Supply Side  143

Chapter 5: Shifting Skill Sets  175

Chapter 6: The Services Shift: Policy Implications  199

Chapter 7: Looking Ahead  245

Appendixes for Chapter 4  263

    Appendix 4A  263

    Country Attractiveness

    Appendix 4B  264

    Country Notes

    Appendix 4C  272

    Country Profiles

Index  317

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ISBN-10: 0-13-264345-6

ISBN-13: 978-0-13-264345-0

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