Could Madison County, NC Be A New Tech Hub?

By: Amrita Tahiliani Joshi

Madison County – Tahoe with a Bit of Berkeley? Not your Typical Rural Community

A couple of weeks ago, I got the opportunity to visit Madison County, North Carolina with our partner Tom Mirc, Principal, KeyOak Advisors as part of an USDA rural economic development grant to look at the potential of bringing Technology and BPO services to the region. I have written before that I am continuously surprised when visiting rural areas in terms of how different they are from typical rural stereotypes and how varied they are from each other. What is most surprising about Madison county is that there is nothing typical about it as a rural community. First the landscape is gorgeous-there are mountains everywhere, and the greenery reminded this California girl of Lake Tahoe. Second, Madison County has a very artsy, trendy (and a bit hippy) vibe to it stemming from being so close to Asheville. Asheville is the anchor city for the MDA and about a 20-30 minute drive to most areas of Madison County. For those of you who are not familiar with the city, Asheville is becoming a very popular due to the art, trendy restaurants, multiple breweries, gorgeous landscape, and more. Asheville was even coined the “Paris of the South” by Huffington Post.

Madison has benefited from the growth of Asheville. With the rising popularity of the city, Asheville has become more expensive. As a result, people have pushed further out into the surrounding areas like Madison. For example, many artists are moving into Madison County. A large building in Marshall on Blannahassett Island, was recently renovated into artist studios that have been completely occupied.

While Madison County is a great place to live is there potential for it to be a technology services hub?

My initial impression is a definite yes. The biggest strength for the county is the ability to attract workforce to the region. Unlike many other rural communities – the area caters to today’s active young adults. Residents have great outdoor recreation such as skiing and river rafting, an organic farming community, and the city of Asheville close by. While we were there, we heard over and over again that Madison County would have no problem attracting people (senior and youth) to the area if there were jobs. We also heard many stories of people who moved to the area because they had the ability to work from their homes.

In terms of technical talent, the region produces roughly 130 technical graduates a year. One place we spoke to during our trip was AB Tech in Asheville which offers 2 year technical degrees. I was very impressed with the school’s administration in terms of their ability to quickly adapt to changing technology market requirements and how they were able to put together customized programs for businesses in very technical areas such as gear manufacturing and composite training in a matter of weeks. An interesting fact about the school is that in 2010, a group of AB Tech computer programmers won second place in a national web programming contest, beating out schools like MIT, and finishing just behind Stanford.

Students from AB Tech continuously get the opportunity to work with local technology and manufacturing companies in the Madison county area which creates great opportunities for both the students and companies. Schools like AB Tech are vital in creating successful economies in rural areas like Madison County. Madison County is also home to Mars Hill which is in a wonderful college town which annually produces roughly 30 computer science graduates and 400 overall.

If We Build It, They Will Come.

The largest hurdle Madison County will have in attracting businesses is finding available commercial space. Although there is a lot of small retail and charming old properties, (I have my eye on a church for sale that would make a wonderful office for my company!) the Class B office space that could house 100-200 people is non-existent. New companies coming in would most likely have to build their office space. This is usually not an option for most service firms unless they are targeting offices with 500 or more employees. However, Madison County is aware of this issue and their new economic development team will be tackling this head on. We feel very strongly that if they able to increase the availability of office space, companies will come because of the attractiveness of the workforce and the area.

 

Why Increasing Diversity in Technology is Good for the U.S.

By: Amrita Tahiliani Joshi

Several weeks ago, I was at the Dreamforce Women in Innovation panel discussion with Gayle King – co-host of CBS This Morning, Jessica Alba – Founder, The Honest Company and Susan Wojcicki – CEO, YouTube (the panel was by the way fantastic for ANYONE to watch).  A major part of the discussion was focused on how to get more women into the technology industry. Both Google and Honest were at the forefront of this cause and spoke about the different initiatives underway within their companies such as increasing maternity (and paternity) leave, conducting girls coding camps, mentoring women and seeking out women candidates. But the question I was left with was – will a few progressive companies be enough? Or the better question – how long will it take for companies to make the impact needed?

Wait! Before you say….”Diversity – I don’t care, that’s “their” issue, if you do care about America’s technology competitiveness, then diversity in technology is your issue!  Attracting different types of people to technology is VITAL for the U.S. not just because of the benefits normally cited such as higher performing teams, fostering creativity and increased critical thinking. All those reasons are true and significant but I would say there is a more urgent issue: if we don’t attract more people to technology we are not going to have enough technology workers to contribute to U.S. demand, let alone global demand. More dire is that, as technology makes certain jobs obsolete, if we don’t prepare those people for jobs created by the new economy, where will they go?

According to the U.S. Bureau of Labor Statistics the number of software development jobs are expected to increase by 22% from 2012 to 2022, equivalent to a 222,000 increase compared to 11% for U.S. jobs in general. If you add up all the occupations under computer and information technology which includes occupations such as web developers, computer information and research scientists, computer networking etc. the total increase is estimated to be 694,000 jobs of which all have growth rates that are significantly faster than all other occupations – an average of 18% faster. I wasn’t able to find purely computer science graduates numbers that were not muddled with all engineering but can tell you the growth rates are nowhere close.

The largest indicator of the digital divide is the current high school curriculum which includes little if any computer science instruction. In 2015, less than 30,000 students took an AP Computer Science exam out of 2.5 million students who took at least one AP exam. In 2013, Collegeboard.com reported that computer science only appeared on the curriculum of 3,249 schools across the U.S., out of more than 98,000. If kids are never exposed to a computer science course they certainly aren’t going to focus on it!  In terms of demographic, in 2013, women accounted for 18.6% of computer science exam-takers, Hispanic students 8.1% and African American students 3.7% compared to their make up in the entire workforce nationally: 51%, 16% and 12% respectively.

Most telling to this divide are statistics from Silicon Valley, the heart of technology innovation in the world. On average, just 2% of technology workers at 7 major Silicon Valley companies that have released staffing numbers are African American; 3% are Hispanic. I find this astonishing because the overall population in California comprises of 38.6% Hispanic. Women make up 51% of the workforce nationally and 30% of the tech industry labor force. However, as numerous reports will tell you, these numbers do not align when you consider actual technical/leadership roles.

The Consequences?

  1. Not enough people in tech! We will HAVE TO send technology work overseas even if perhaps that is not our first choice because the talent just WILL NOT EXIST in the United States. Global companies will continue to expand their operations and outsourcing overseas in order to access global talent to meet their technology resourcing demands. When you consider the overall demand for technology systems and applications in high-growth markets like China and India, the U.S. will be doing a diminishing portion of the development and implementation work. Over time, that means the U.S. will lose its position as the leader in technology services.
  2. Increased unemployment and a wider income gap in the United States. Technology will continue to displace jobs worldwide. If we do not invest in technology education where will all these people go and what will they do?  A recent report from the Oxford Martin School’s Program on the Impacts of Future Technology attempts to quantify the extent of that threat. It concludes that “47% of American jobs are at high risk of being taken over by computers within the next two decades”.

We need more diversity in technology because we need more people in technology! I am not talking about only women but other underrepresented ethnic groups. Ultimately, what we need is more access to all Americans, especially those in lower middle class America as their jobs are most vulnerable to displacement by technology. We need more diversity in technology because we need jobs of the future to replace the jobs of the past.

So what can we do? Stay tuned for my next post on what we can do to increase diversity and access to talent in technology.

 

 

Why the Fast Growing Domestic Sourcing Market is Changing How Economic Developers Attract New Business

By: Eric Hochstein


The following is a guest post Eric Hochstein. Eric is an Economic and Business Development Consultant at Highstone Associates.


Domestic sourcing providers, companies which provide technology services from United States operations centers, remain relatively unknown in the global outsourcing industry, but are among the fastest growing segments of the IT industry. As a result of that growth, and the highly desirable jobs these companies offer, economic development agencies across the U.S. are aggressively seeking to attract these companies to their communities.

A combination of well-paid, highly skilled jobs and a clean industry makes domestic service providers outstanding targets for economic developers today. However, without a more detailed understanding of the industry, many pursuits will end unsuccessfully as the companies in this industry are creating different business models and going in different directions. Economic developers need to focus their attention on the right companies for their locations.

Domestic Outsourcing is Growing While the Global Market Contracts

Since the Y2K crisis, CIOs in major companies in the United States, and around the world, have relied upon offshore outsourcing, mainly from India, to relieve cost burdens of managing the growing technology demands of their enterprises and the limited availability of qualified resources. The offshore model provided access to almost unlimited, highly educated resources at a fraction of the localcost.

However, due to dissatisfaction with increasing costs and lower quality over the past decade, and with business models changing, causing a shift in spending control from IT departments to operating business units, the outsourcing location pendulum has begun to swing from an offshore extreme to more of a balance between offshore and domestic-based delivery.

Companies have begun to appreciate the benefits of domestic delivery for key components of their outsourcing portfolios, especially in the era of digital innovation.

The global outsourcing market has declined from peaks reached in 2010 and the value of outsourcing deals signed in 2014 shrank 17% to $120.4 billion from $145.5 billion a year earlier according to KPMG. But the value of contracts being delivered from the United States is actually growing.

With U.S. headquartered buyers estimated to account for approximately 40% of global outsourcing contracts, there is almost a $50 billion market opportunity for domestic providers to serve. Today, it is likely that less than 1% of global contracts are being serviced by purely domestic providers in the United States.

Despite having such a small share of the global market for outsourcing services, the domestic sourcing industry has grown rapidly over the past five years. Although there are no reliable industry figures, company executives say their companies are growing in the 20-50% range annually.

They need to be able to open new locations to keep up with the demand.  With a growing demand for U.S. delivered services, the future for domestic sourcing providers looks quite good.

As a result, communities of all sizes across the United States are anxious to attract outsourcing companies and the jobs they create.

What’s Driving Domestic Outsourcing?

First known as “rural outsourcing”, and based on the premise that only rural locations in the U.S. could support the low-cost business models required to compete with the costs of offshore outsourcing to India and other distant countries, the model has matured over time as the market has changed and the playing field has broadened.  As a result, service providers have established delivery centers in the United States.

Companies are choosing to outsource from domestic locations for a number of reasons.  Some have to do with problems in the offshore model, while others are related to the advantages of being onshore.

The first driver was the escalation of labor, recruiting, and training costs that decreased the offshore labor arbitrage advantage, which had been the original driver of the growth of offshoring.

The spread of “offshore fatigue”- the added stress and strain on domestic project teams charged with managing offshore projects – compounded the concerns about offshore costs. The fatigue was caused by long distance travel pressures, late night conference calls, and frequent issues caused by cultural and language differences and it accelerated internal dissatisfaction with offshoring.

More recently, changes insoftware-writing methodologies from waterfall to agile development, which demands more frequent intra-team communication and quicker iterations, magnified the benefits of proximity, similar time zones and culture. Since domestic sourcing aligns project teams better and speeds up development and testing, early adopter companies are rebalancing their outsourcing portfolios, shifting some work from offshore to onshore and sending new strategic work to providers in the United States.

The new paradigmrequires smaller teams with in-depth knowledge of the business domains and practices that reflect the unique traits and competencies of the contracting companies.  Business analysts, architects, and developers create more strategic and innovative applications, often in the emerging areas of social, mobile, big-data analytics, and cloud.Todayskill becomes more important than scale.

In the original labor-arbitrage outsourcing model, large-scale offshore projects often involved hundreds of engineers, developers and systems specialists working on networks, maintaining infrastructure, and supporting legacy systems and generic services. That work continues to be done offshore.

Another recent change in the outsourcing industry is also shiftingwork from offshore. Intelligent automation, the use of smarter and more integrated technologies to further eliminate the need for human interactions, has reduced the need to send work offshore. The new technologies require fewer, but more skilled and business-savvy, employees who can be found domestically.

Finally, some types of companies prefer that work be done onshore.  In regulated industries, such as financial services and healthcare, privacy and data security concerns are also driving work to the U.S. rather than offshore. Government agencies are, in many cases, prohibited from sending work offshore while some companies, for “patriotic” or marketing-driven reasons, prefer to keep work in the United States.

What Does this Mean for Local Economic Developers?

From the largest global companies to small and emerging domestic outsourcers, providers are increasing their domestic capacity and will need new locations from which to deliver their services.

Major global providers are revisiting their domestic capabilities as they adapt their global delivery models, while little known domestic-only service providers, such as Onshore Outsourcing, Nexient, and Eagle Creek Software Services all claim that their businesses are growing rapidly and that they are rushing to keep up with client needs.

At the same time, leading offshore providers, including the major Indian-owned service providers and companies from Europe, Asia, and Latin America, have been expanding their domestic presence due to changing market conditions and client requirements.

While all types of companies have been looking for domestic locations, their requirements differ widely. The larger, global companies appear to have a dual-prong strategy. They locate small teams in major cities near their customers’ locations and create larger delivery centers in lower cost locations, often second or third tier cities, near major educational institutions.

Offshore suppliers, particularly Indian-heritage companies, have also tried to be closer to their clients, often locating centers near major client facilities. For example, TCS (Tata Consulting) opened a large center in Midland, Michigan, near the headquarters of its client, Dow Chemical.  Infosys, opened a center in Milwaukee, Wisconsin to serve Harley-Davidson, headquartered there.

These companies usually staff their offices with a combination of U.S. residents and foreign workers on H-1B (temporary work) and L-1 (specialized knowledge) visas. With those visas becoming harder to get, more American workers have been hired by Indian companies in recent years.

The “purely” domestic suppliers are focused on identifying lower costs locations in the United States where they have access to a sustainable supply of resources and are fairly protected from competition from other service providers.  Some have chosen to locate in second or third tier cities, with populations around 500,000, while others have built strategies around smaller, rural communities with fewer than 25,000 people.Other companies believe their sweet spots are in the middle, in communities with between 75,000 and 250,000 people.

For the established companies with existing delivery centers in smaller communities, growth generally means opening centers in new locations with fresh supplies of labor, rather than local expansion. Their centers in small, low-cost areasreach a saturation level for the type of workforce that they require when they reach 150 or 200 employees.

This forces them to expand elsewhere with similar attributes.Some of these companies have developed a competence in recruiting, hiring and training the right candidates for their positions allowing them to go into almost any location.

For other companies, with facilities in larger cities and a capacity to scale larger as needed, physical expansion to new locations may be driven more by proximity to customers and new market opportunities than by the need to expand their candidate pool. In these cases, one important element is the availability of college graduates.

This means that economic developers, to be successful, must carefully profile the companies in the market and understand the specific needs and strategies of the companies they choose to approach in relation to the assets in their communities.  They need to be able to target the right companies for their community and offer the appropriate incentive packages and workforce development tools.

Communities Need a Collaborative Approach to Attraction

The growth of domestic sourcing requires all types of technology services providers, from global leaders such as IBM, to the smaller upstarts, to identify viable locations for their businesses with the right combination of skilled workforce and competitive costs to sustain their growing businesses.

To respond, economic developers will do best with a community-wide approach to attraction incorporating innovative approaches to workforce development, alignment with higher education, and a strong financial proposition.

Local universities and community colleges generally play a major role in helping to attract these new employers, in training their initial workforce, and in sustaining the flow of skilled resources to the companies. Companies say they are looking for those communities with established tri-partite partnerships between government, economic development organizations, and educational institutions.

The incoming companies want to see strong cooperation in the local community and significant benefits available to them in the form of grants, incentives and other programs which will help them start up quickly and which require minimal front-end investment in infrastructure, strong support for recruiting and training their new work force, and future commitment to their growth and local expansion. At the same time, most companies want to work closely with the local institutions to assure that education and training of students is relevant to the needs of their businesses.

Whether the companies are information technology services companies (IT), providing application development, network management, or quality assurance, or business process outsourcing (BPO) providers, handling processes such as finance and accounting services, human resources, or customer service, communities desire their presence and make them generous offers because they attract professionals and offer above-average salaries who are likely to establish roots in the community.

These companies require a vibrant ecosystem around them to support their growth and satisfy the broad requirements of the new employees. In fact, some believe that for each dollar of a service provider’s payroll, another $4-5 of economic activity is generated locally.

It’s Not just Rural Outsourcing

Companies of all sizes are actively providing outsourcing and technology services from the United States, some of which is being brought back from offshore as clients rebalance their outsourcing portfolios. IBM, the largest global technology services company, has established new development and innovation centers in mid-sized cities with strong academic centers around the United States.

Some of IBM’s newer locations include Dubuque, Iowa; Columbia, Missouri; East Lansing, Michigan; and, most recently, Buffalo, New York.

In 2013, IBMannounced it would create about 800 jobs in Baton Rouge, Louisiana. A key part of that deal was an investment of more than $14 million in state funding designed to accelerate the growth of the computer science program at the Louisiana State University.  Also, as part of the same deal, a local developer announced a new $55 million mixed-use development downtown with offices for IBM and an 11-story residential building.

IBM, state officials, and LSU formed a statewide partnership which has embedded IBM employees in the University to advise on curriculum development, teaching strategies, internships and career placement, as well as the encouragement of STEM careers throughout the state’s educational system.  Enrollment at LSU in the computer sciences has already tripled.

This public-private-academia partnership has already been replicated in other areas of Louisiana.  A number of leading domestic outsourcing companies have established operations in and around New Orleans, Houma, Lafayette and Baton Rouge, making Louisiana one of the hotbeds of the domestic sourcing industry.
Other companies are working with similar models. CGI, a Montreal, Canada-based global technology services firm which claims to be “the sixth largest independent information technology and business process services firm in the world”, opened its newest onshore delivery center in Lafayette, Louisiana in late 2014. CGI has established operations centers in four other U.S. communities including Belton, Texas; Lebanon, Virginia; Athens, Ohio and Troy, Alabama.

Each location draws on the resources of local colleges and universities to assure a quality workforce and “gives college grads more opportunities to live locally, while giving businesses throughout the U.S. the ability to source more IT work in America’s heartland.”

CGI stresses that its onshore model creates quality IT jobs in the United States, invigorates local economies, and is an example of community investment, requiring collaboration between local communities, governments at all levels, academia, and the private sector.

Models Fit All Sizes of Cities

Global firms, like IBM and CGI , have different requirements than emerging providers such as Rural Sourcing, Inc., Onshore Outsourcing, Genesis10, and Eagle Creek Software Services, all of whom are rapidly growing, purely domestic outsourcing providers. But it would be mistaken to think that all domestic outsourcing companies had the same business models and location profiles.

Monty Hamilton, CEO of Rural Sourcing, Inc., an early domestic outsourcing player, says that his business is “all about workforce and accessibility to talent”. His company has centers in Augusta, Georgia, Mobile, Alabama, and Jonesboro, Arkansas. While these are not “Tier 1” cities, they are not “rural” towns.  He says “RSI’s mission is to create 3,000 IT jobs in tier-2 cities across the United States by bringing jobs that were lost due to offshore outsourcing back to America.”

At the other end of the spectrum, companies like Eagle Creek Software Services and Onshore Outsourcing, are truly taking outsourcing to rural America.  But they are doing it in different ways. Eagle Creek, with headquarters in the Minneapolis area, has technology centers in Valley City, N.D., Pierre, S.D. and Vermillion, S.D.  Vermillion, has a population of about 10,600 and is the home of the University of South Dakota. Eagle Creek partners with, and recruits from, the school, but also recruits professionals from out of state to move to Vermillion for the promise of a career in a place with a good quality of life.

Offshore Outsourcing, which has an office in Macon, Missouri, population 5,500, generally recruits locally and regionally and trains and develops it core staff. It prides itself on bringing positive change to the communities it invests in.From an economic development perspective, Onshore’s arrival in Macon has been a driver of rebirth and great change in the local economy.

Domestic outsourcing service providers are a good new target for economic development teams throughout the United States.  The companies are growing and there will be a continuing need for new locations where companies will create 100 or more new jobs at a time.

In this industry, however, one approach will not attract all companies.Companies with different profiles will have different requirements, while communities of different sizes will have different assets and benefits to offer.

To be successful, economic developers must understand the industry, the companies, and the specific requirements the companies have. They must sell to the specific requirements of the individual companies and they will need to have their red carpets ready, and their partners prepared, because the outsourcing companies move fast when they are motivated and won’t have to wait to find good offers.

Silicon Bayou – Much More than Economic Incentives

By: Amrita Joshi


Why Louisiana is the Hottest Destination for Technology Companies Today

As part of RevAmerica 2015, I had the opportunity to learn about how Louisiana has become a popular destination for technology companies through conference panels, interactions with government representatives and agencies, and a site visit to companies and educational institutions in New Orleans, Baton Rouge and Lafayette.

I can’t tell you how impressed I was with how much Louisiana has done to grow its technology industry in in such a short period of time. Before I visited Louisiana, I had heard a lot about the aggressive economic incentives that the state has put into place to attract technology companies. However, I was not aware of the extensive work being done to increase and sustain the technology talent pool….and how fast they are doing it.

As part of the main conference, we had a panel on “Building Scale: How Louisiana is Transforming its Talent Base” where we had three senior deans/program directors from major Louisiana Universities as well as two executives from companies that had recently established delivery centers in Louisiana, IBM and technology services startup, Enquero.

The level of cooperation between the companies and educational institutions was the highest I have seen during my years of working in onshore services development. For example, IBM has been working hand in hand with Louisiana State University for the past two years (project managers, weekly meetings and everything!) on developing the workforce they need for their new 800 seat Baton Rouge center. Through their work they have had significant input on all aspects of workforce development, from recruiting students to the college to shaping the computer sciences curriculum. IBM’s GM of Services – Americas even came up with the concept for the university’s computer science recruitment campaign around “changing the world, building the future”.  In addition, in just one year, IBM together with the university’s faculty have helped develop a new Computer Science curriculum. For those of you who have experience working with universities, this is no small feat. How did the Dean sell this internally? By convincing faculty that they were not doing this for IBM, they were doing it for the students.

Enquero, a technology services start-up, received a significant amount of attention from state and local governments when it announced its first center would be in Louisiana. More importantly, they are playing a key role in the community to develop the talent pool in Lafayette. They have established a partnership with the University of Louisiana at Lafayette to recruit students from the University’s School of Computing and Informatics as well as serve as advisors on such matters as curricula, tools and internships. In addition they are serving as an industry advisory board member on the NSF’s Center for Visual and Decision Informatics, to help advance next-generation Big Data and Decision Support technologies.

Most incredible is the pace at which these companies and universities are expanding. Over the five year period, Louisiana State University, University of New Orleans and University of Louisiana at Lafayette have committed to at least tripling the number of Computer Science graduates. In actuality they are doing this much faster.  This dedication to creating knowledge talent quickly is what is going to make Louisiana a great destination for technology services – long after the incentives have run out.

Watch video from RevAmerica 2015 session “Building Scale: How Louisiana is Transforming its Talent Base”.

For more information about Louisiana, please visit http://www.opportunitylouisiana.com/page/software-development
or contact Josh Fleig at [email protected]

Onshoring, Talent Development, Automation – My Top 10 Picks from RevAmerica 2015

By: Everest Group


The following is a guest post from our Research Partner, Everest Group. Sakshi Garg, Practice Director, Global Sourcing, recaps the RevAmerica 2015 conference and shares her Top 10 key takeaways from the event. Presentations from the conference can be found here.


Last month I had the opportunity to attend and co-present with Eric Simonson at a special event in the outsourcing sector, RevAmerica 2015, held in New Orleans, LA. You can download our keynote presentation here. For those who might not know, RevAmerica is a domestic outsourcing event in its second year. The event focused on a multitude of topics and was attended by a strong community of service providers, buyers, economic development agencies, analysts/consulting firms, and academic institutions. Here are my top 10 takeaways from the event:

  1. Buyers are looking at their IT and BP service delivery portfolio more holistically than ever and asking the shoring question more seriously. They are willing to evaluate onshoring as an alternate and in some cases willing to even bend their rules around cost savings to get the extra flexibility in delivery.
  2. Service providers have a major role to play in onshoring growth as they can not only harness the available talent pool, but also create a delivery model that makes economic sense.
  3. Domestic pure-play service providers are diligently making the business case for onshoring. The ones that do this without demeaning the offshoring benefits are likely to be more successful in not only winning pursuits, but also in sharpening their own value proposition for buyers. In this regard, I liked Genesis10, Nexient, and Rural Sourcing’s approach that are playing on the strengths of onshoring rather than making unnecessary comparisons with offshoring.
  4. Economic development agencies (EDAs) are evolving in their thinking and go-to-market approach. Those who are serious about this sector, such as North Dakota Dept. of Commerce and Louisiana Economic Development (LED), have a more collaborative approach towards working with providers/enterprises. However, there is a lack of collaboration among economic development agencies for the common goal.
  5. Talent development continues to be an area of immense interest. Partnership with universities, training/re-skilling programs to create talent in places where people have limited opportunities, and hiring veterans and their spouses are all examples of initiatives to strategically develop the available talent for domestic sourcing. A great example of this is the partnership between IBM, LED, and LSU College of Engineering where State of Louisiana will invest in the institution to expand higher education programs in order to increase the annual computer science graduate output to support IBM’s delivery center in Baton Rouge.
  6. Tier-3 cities are the epicenter of activity in the domestic sourcing space, with maximum centers and headcount located in this cities. They are also the ones that will see maximum growth in the future, but we should watch for saturation trends.
  7. The buzz around robotic process automation (RPA) is getting stronger, especially in the context of domestic sourcing as onshore providers can compete with the offshore labor arbitrage model by harnessing the potential of RPA (where applicable).
  8. The role of educational institutions has to increase to make onshoring a compelling alternative in the eyes of both providers and buyers. EDAs can only promise sustainable talent pool, but not deliver it unless educational institutions show the flexibility and support at a sustained, tactical level – implying changing curriculum, adding industry interaction programs, etc. while still serving the overall mission.
  9. Agile methodology and its implications for working models for IT teams are a great blessing for the onshore model. However, agile can only be one of the selling points. Domain expertise, ability to ramp up/ramp down, technology expertise, and cost of delivery are all factors for evaluating a provider’s capabilities in the onshore context.
  10. The notion of “domestic sourcing = impact sourcing” is flawed. Beyond generating jobs for the underprivileged, domestic sourcing’s larger mandate is to create jobs for the unemployed educated people of the country. There are some domestic sourcing plays such as Onshore Outsourcing and Liberty Source that are doing impact sourcing in an onshore model.

Overall the event touched upon some very relevant topics from the domestic outsourcing perspective and is paving the way for developing a stronger ecosystem to support this sector. Kudos to the Ahilia team for organizing a great event! Last but not the least, in case you are interested in learning more about the domestic outsourcing landscape, you can download Everest Group’s full report here. You may also want to read Eric’s blog on tier-3 cities: John Mellencamp Named Honorary Everest Group Analyst of the Month.

*Originally posted on Sherpas in Blue Shirts, the official blog for Everest Group. Click here to view the original post.

RevAmerica 2015 – So What’s the Fuss?

By: Juliana Gidwani


People ask us, there’s so many outsourcing events out there so how is RevAmerica 2015 different? Well for one, it is the only national event focused on U.S. IT and BPO onshoring/domestic sourcing. That means we have designed the program not around general outsourcing, but the changing landscape of IT and BPO services being delivered in America and how this industry impacts the overall US economy and local communities.

When we kick off RevAmerica 2015 tomorrow in New Orleans, we commence a day and a half of conference sessions that will see 30+ industry experts and thought leaders discuss, debate and share insights on U.S. onshoring. Conference highlights include:

  • Keynote speaker Michael Rogers, the Practical Futurist and former Futurist-in-Residence at The New York Times, will discuss how organizations in the U.S. can stay ahead of the pack in assessing and adopting new technologies to retain their innovation edge in the global economy.
  • The launch of Everest Group’s landmark research report on the U.S. domestic sourcing industry based on the first and most extensive study of its kind. Everest Group’s leading analysts will present key findings of this study including the variations for different types of services and the approaches of onshore pure-plays, traditional multi-nationals, and India-centric providers.
  • Real-life case studies from companies like Red Hat, CGI and Louisiana Economic Development (LED) that provide different perspectives of the onshoring coin – from the viewpoint of a services buyer, a service provider and a state government focused on attracting services companies.
  • Expert panels on key trends impacting onshoring service delivery models including digital and robotic process automation.

The conference is only one part of the program. On Day 3 of RevAmerica 2015, we will visit 4 service delivery centers in New Orleans, Baton Rouge and Lafayette, LA. These are some of the popular Louisiana cities for locating delivery centers including the Louisiana Immersive Technologies Enterprise facility in Lafayette. This site visit provides attendees with a firsthand look at the Bellwether Technology, IBM, CGI and Enquero centers as a testament to how onshoring can work successfully in low cost U.S. locations, and how LED has put together the right programs and partnerships to attract service companies.

That’s a lot of learning but where’s the fun stuff? Well, the program has numerous networking and social opportunities including 2 evening receptions. We also have left time for attendees to explore New Orleans – the conference venue (Omni Royal Orleans) is just around the corner from Bourbon Street.

All in all, we are excited about RevAmerica 2015 in New Orleans and are really looking forward to having good discussions, eating great food and meeting friends, old and new!

Welcome to The Onshoring Blog!

By: Amrita Joshi


With just one week until our flagship event, RevAmerica 2015, this seems like the perfect time to launch The Onshoring Blog. If you have not checked out our event yet, take a look at our program and fabulous speaker lineup at www.revamerica2015.com.

The Onshoring Blog will cover a wide variety of topics that impact and influence the American onshore industry. Specifically we plan to cover:

  • How onshoring fits into a global sourcing strategy
  • Current and future value propositions for onshoring
  • How America can retain its innovation edge globally
  • How to train, recruit and develop American talent
  • How to promote and market the industry as a whole
  • Anything else our readership feels is important to the industry!

We want to have an open, honest dialogue on the value of American IT and BPO services – and appreciate all points of view. We know that major players in the global services space have varying opinions and look forward to having a professional discussion on those different views as addressing them head-on can only help move the industry forward.

We need you to contribute! One of the challenges in the onshore market is that it is very fragmented- There are so many fantastic players in the market that don’t define themselves as “onshore”. Please let us know who you are and contribute to the discussion! To contribute to The Onshoring Blog – please email us at [email protected].