Global sourcing differs from internally developed and operated services. Global sourcing requires working with third-party organizations that operate in different cultural norms, and often, at a different organizational level.

All these complexities must be managed in ways consistent with business objectives. The relationship requires greater communication and a thorough requirements definition. The complexity of communication, travel, and governance increases when the third party is in a distant location.

While many companies still consider global sourcing for cost savings, they are discovering unexpected benefits such as innovation, transformation, partnerships, and business expertise. Companies discover that process improvements as measured by the Capability Maturity Model (CMM) or defined by the Information Technology Infrastructure Library (ITIL) can increase the alignment between the IT organization and business units and streamline project efforts.

Global sourcing introduces new kinds of complexities. Companies must communicate requirements for regulatory and privacy compliance, and design methods to protect intellectual property internationally. The costs, risks, and benefits of global sourcing must be understood in order to make informed decisions based on the organization’s strategic direction.

Global sourcing has immediate appeal because of the cost difference between labor in offshore locations and Western countries. The global sourcing equation, however, is more complex than comparing salaries within the same job class. It is a different way of achieving the same objectives. In some cases, a team might replace a single individual; in other cases, entire processes might be constructed around a set of activities.

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INFOSYS
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TABLE OF CONTENTS
Understanding Global Sourcing Principles 03
Undestanding Security and Privacy Protection 06
Undestanding Process Model Impact 10
Undestanding Global Sourcing Contracts 14
Undestanding Cultural Gaps 17

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