Posts Tagged ‘offshore’

BPO vs. Protection of Intellectual Property

June 27, 2009

In contemporary information society data management and intellectual property protection have been an important competitive edge. Knowledge about markets and trends, products and services, competition and own R&D, customer and employees data is much more important than the fixed assets possessed.

Many companies avoid to outsource operations as they are of the opinion that outsourcing brings much risk. For instance, sensitive data, processed by an external service provider, would not be safe any more. That can be subject for discussion as data is not equal information and information is not equal knowledge.

It makes now sense to understand what is the difference between these three concepts.

Data is defined as pieces of information that represent the qualitative or quantitative attributes of a variable or set of variables. Information is a collection of data from which conclusions may be drawn. And knowledge means the confident understanding of information with the ability to use it for a specific purpose if appropriate. (Oxford English Dictionary)

In different legals systems different regulations regarding protection of intellectual property apply. However, if a vendor processes data, it does not automatically mean that they possess knowledge or even information — does not matter what legal circumstances there are in their country. It is definitely easier to create information or knowledge in-house, having better connection to the business made. Therefore, it could now be asked if the data are really safer while processing them in-house then outsourcing them?

However, BPO companies recognize the problem of the lack of trust dealt by their customers and react respectively. Nowadays it is for instance almost impossible to meet an employee at a BPO organization who deals with data of competiting companies. Many BPO companies try to divide people working for different competitors into different offices. Also signing of confidentality agreements is a standard procedure in BPO industry.

Magdalena Szarafin
http://www.szarafin.info

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Magdalena Szarafin is a Polish economist, residing in Frankfurt, Germany. She works as an international management accountant in a big multinational group. In her leisure time she prepares a PhD dissertation focused on shared service centers. Her research interests include insourcing and outsourcing in connection with the value chain. She is the author of many publications dealing with outsourcing, knowledge management and total quality management.

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Public sector to outsource

June 26, 2009

Public sector has been subject of transformation in many countries for a few years. Under the pressure of tax payers, decision-makers have come to the conclusion that public institutions would deliver high-quality service at the same or even reduced tax burden if they try to act similar to private companies.

If private companies use outsourcing and are successful, also government institutions can do the same.  It is a possibility for them to reduce costs, increase quality and improve performance. Outsourcing also offers them the possibility to create new jobs or get the existing jobs remain in the private sector.

However, offshore outsourcing by public sector is a subject of discussion of many citizens who are of the opinion that one of the task of the government agencies is to contribute to job creation or job retention at least. Therefore, offshoring by public institutions can be seen as politically incorrect.

That is why it is important for the public institutions to choose the suitable vendor in their own country. Such a solution can be a supplement to traditional government measures as subsidies for companies creating jobs in regions with higher unemployment rates.

An example of Washington National Library is very interesting in this context. The Library as a public institution wanted to outsource digitalizing and archiving of documents to a national service provider. Therefore Lakota Technologies, South Dakota has been chosen. The region of South Dakota has not as good cost structure as India or China, however, it offers better cost structure than other US regions.

Magdalena Szarafin
http://www.szarafin.info

_______________________________________________________

Magdalena Szarafin is a Polish economist, residing in Frankfurt, Germany. She works as an international management accountant in a big multinational group. In her leisure time she prepares a PhD dissertation focused on shared service centers. Her research interests include insourcing and outsourcing in connection with the value chain. She is the author of many publications dealing with outsourcing, knowledge management and total quality management.