I finally had the chance to read the recently published "The Forrester Wave North American Outsourcing, Q1 2007" report by by William Martorelli with Christine Ferrusi Ross and Francesca Bartolomey. This analysis of 13 application outsourcing service providers found that the companies "offer adequate service offerings but that they must do more to meet customer demand for value and innovation."
The report compares the offshore players (Satyam, TCS, Wipro et al) with the multinationals (IM, Accenture, CSC et al). While the former can provide better pricing, the latter still dominate for global reach and broader domain competencies – in general.
What they all have in common, for the most part, according to client interviews performed by Forrester, is that the suppliers tend to "deliver to the letter of the agreement but fail to suggest meaningful improvements."
In other words, the great promise of innovation or process transformation through outsourcing is tough to get in the segment of application development (and, I suspect, in other segments too).
One point that seemed to surface in customer quotes was that it doesn’t matter what your service provider is marketed as being excellent at. You will only truly discover those qualities it excels at after you have worked with it for a while. If it has CMM level 5 capabilities, that may not be brought to bear in your environment. Likewise, even though a vendor may already have clients in a specific vertical, best practices may still not show up in the work that provider does for you.
Also, some of my assumptions were blown away about which category (offshore vs. MNC) would excel in any given characteristic. Forrester gave me permission to republish the table below, so you can see what I mean.
I would have thought the offshore providers would do a better job at performing against SLAs, since they tend to have strength in repeatable process; but the MNCs earned a higher score. (At the same time, the offshore players earned a higher score in "quality of SLAs.") Also, I would have thought the cultural fit would be wider between the two groups; it’s actually quite close.
So who are the leaders? All 13 vendors ranked as leaders or strong performers. Yet, the top dogs on the MNC side were Accenture and IBM; on the offshore provider side, Cognizant edged out TCS and Infosys.
To read the table of contents and a brief excerpt from the report and buy it, visit: