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The Best of Both Shores

Harish Revanna
Thursday, August 30, 2007
Harish Revanna
It is a fascinating time to be in this maturing IT services industry. The pendulum has swung to the right and to the left, finally calibrating itself,” remarks Dominick Cavuoto, the new CEO of Global Consultants, Inc. (GCI). A dig into the IT services history shows how some companies gave in completely to the trend of offshoring and went ahead slackening their services business. Until, in many cases, the benefits of doing everything offshore proved of questionable worth. And what to do where became the new focal point.

Therein is GCI’s value proposition. GCI, for one, is right under this swinging pendulum leveraging on the calibration. “We have seen the two phases,” says Cavuoto referring to the earlier swings, “and now in the third: the BestShore phase.” BestShore is a blended model for IT services activities. Its unique proposition lay in tailoring to the customers’ economic, technology, cultural, and strategic needs, while constantly determining what sort of delivery approach will work best. Be it onsite, offsite or offshore or a combination of all these.

“It is a best of breed model that germinated from our constant client interaction,” says Hiten Patel, the chairman and architect of this model. As a CEO of a small professional services firm trying to place consultants in its early days, he had encountered bizarre questions like “do we have to get this work done onshore or offshore?”, “is it possible to outsource?”, “Can we avoid mistakes by keeping this work onsite?” et al. Soon, his pensive mind had crafted two things. One was, of course, the BestShore model, and the other was the future of his company. “We realized early on that clients were more comfortable in dealing with a U.S based company than a pure play offshore outsourcing vendor. So we went ahead and established centers–both organically and inorganically, across US and offshore development centers in India, China and Brazil,” he says.

BestShore model today is the symbol of GCI. “But this didn’t come on a platter for the company, it needed (and will need) insurmountable convincing of clients,” says Ed Glassmeyer, Managing Partner at Oak Investments. Last year, sensing the new wave on which GCI was riding, Oak made a $30 million investment in the company. Glassmeyer, who has watched this transition of GCI from professional services to an IT services company, attributes the success entirelyto the vision of the self-made entrepreneur P a t e l. For Patel, however, this enormous undertaking was an outcome of his long cherished and embraced philosophy: one customer at a time. He has constantly offered superior customer service by understanding each of their business needs. Converting his long existing vendors into partners for GCI’s IT services offerings was solely an outcome of this customer philosophy.

Alongside philosophy, GCI is being helped by one of the world’s hottest business issues: Worthiness and benefits of doing everything offshore. Most IT outsourcing vendors today are making huge profit margins of 30-40 percent from projects outsourced, while the client themselves make 12-13 percent on their entire business. “It often embarrasses the management team to answer their shareholders on their infectivity. The commodity work offshored to the IT outsourcers is basically helping that vendor to make a fortune, while they couldn’t do it themselves,” says Cavuoto.

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