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On-Site Work a Growing Trend in Offshoring

October 17, 2006
Related Topics: Outsourcing, Latest News
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Brian Hendrickson knew he had to figure out a way to fill open positions faster. As director of systems integration and testing at Intermec, an Everett, Washington-based IT company, he noticed it was often taking four to six months to fill positions for senior-level software testers. This made it difficult for the company to get its products out on time and continue to grow, he says.

As a result, Intermec executives began talking about offshoring. But they had concerns. "There were several horror stories about companies offshoring," Hendrickson says. Specifically, the company wanted to make sure it didn't send the work into a black hole.

Intermec ultimately signed a deal with Global Consultants Inc., a Morristown, New Jersey-based IT outsourcer with more than 3,000 IT workers globally. Hendrickson decided on two things: start small and have the contractors spend time in the U.S. offices.

"I wanted to embed the team of contractors into our own teams so they could get a good understanding of how the company works," Hendrickson says. Intermec spent 10 to 12 weeks training five contractors from Bangalore. Four of those workers returned to Bangalore and now provide help to a 22-person team. The other contractor remained at Intermec and acts as Hendrickson's liaison to the Bangalore operations.

"My understanding of some of the failures that have occurred with outsourcing is that companies just threw their tasks over the ocean," Hendrickson says. "That was an inefficient way of getting things done."

Intermec is one of a number of companies that have realized the value of having workers from the outsourcers on site, says Lori Blackman, president of DNL Global, a Dallas-based acquisition specialist serving global outsourcers.

"Over the past five years, we have seen a shift of more companies using this model," she says. What's unique about Intermec's approach is that it is also making sure that more of its India-based workers spend time on site.

"It's a good way of doing things, because the success of this kind of work largely depends on the people aspects," Blackman says.

How people work together accounts for 80 percent of the success or failure of an outsourcing project, she estimates.

For Intermec, the model seems to be working. The company has seen a 35 percent increase in its capacity during the past year and has shaved three months off a 12-month project.

Intermec held meetings explaining the purpose of the new contractors to address potential morale issues among employees, but Hendrickson says it hasn't been a problem.

Intermec recently launched a similar model at its Singapore office, which it opened in July.

--Jessica Marquez

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