No one told me writing a blog was easy and as a result I have been remiss in not writing as regularly as I have done in the past. Writing a blog about outsourcing is challenging because many things remain the same over time and then something happens to stimulate change.

In my travels in the past few months I had the opportunity to attend and participate in NASCOM 2006 in Mumbai, India. The experience was well worth the journey for two key reasons:

1) The number of multi-national firms providing sponsorship included: HP, IBM, Accenture, Cisco, and even TPI. Those names were on the main stage with the companies you would expect in India such as Infosys and others.

2) The keynote speakers from Tom Friedman, who authored “The World is Flat” to the President of India, all focused on one theme - the need for innovation in the global marketplace.

Each speaker talked about the great accomplishments of India’s outsourcing market - this definitely was not a stretch as we all can verify. The companies in this market have challenged the business model of outsourcing. They have forced us all to become better at what we do – especially around pricing and standards. But they have also created a race around the concept of Global Delivery.

What is it and what can it become? Most of us talk about having onsite, on shore, near shore, and offshore capabilities. In fact we at HP use this approach with many of our global customers today such as P&G, Ericsson, Hutchinson, and as announced recently, Avago Technologies. The benefit of such a model comes in three phases:

1) Cost Arbitrage: the ability to place work such as service desk, applications, network monitoring or bridges in low cost locations.

2) Standardization: cost reduction can only be maintained over time through delivery from offshore centers which standardize on processes such as ITIL, ITSM and Six Sigma. Level five certifications take advantage of skill sets and additional cost efficiencies.

3) Virtualization: much is said about the virtual workforce operating in various businesses from home offices. The Global Delivery infrastructure provides this level of virtualization in the business of IT context, and provides the ability to shift and flex work as required.

The next phase and what we believe to be the key battle ground for client success is the Wave of Innovation. This is the ability of the Sourcing Partner to leverage knowledge both from within their company as well as their partner network throughout the planet. This knowledge is an on demand network to engage with clients in planning, prototyping, and implementing new, improved, or different processes and technologies to meet their changing business requirements.

And for those Sourcing Partners who have dedicated R&D capability, they will be able to be more proactive in the application of technology to business process as well as efficient utilization of both people and technical resources. If we look around, the challenge made at NASCOM to the Indian companies is already being taken up by the multi-nationals such as HP. This challenge is being met with Global Delivery Centers throughout the planet and with it the ability to take advantage of IP to meet the diverse needs of global clients. Not to be biased, but I like HP’s chances to lead this new wave of innovation. This will be the true business value of Global Delivery.

For the latest on HP’s outsourcing business, take a moment to read about our recent announcement with Avago Technologies in Asia Pacific: http://www.hp.com/hpinfo/newsroom/press/2006/060412a.html?jumpid=reg_R1002_USEN, as well as the recognition received by HP from Vodafone:

http://www.hp.com/hpinfo/newsroom/press/2006/060420a.html

JEH

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