EmPower in the News

The Impact of Globalisation

Wallydownundy
September 17, 2007

Debjani Deb is focusing on outsourcing and the impact on communications. How do you take advantage of this trend? And how do you manage communications?

First track the advent of outsourcing: Started with a drive for arbitrage of labour and raw material in manufacturing. The second was the extension of the customer base - new audiences to sell products to. The third was the growth of services - English-speaking professionals to do back-office services efficiently, cost-effective. The fourth - and today’s trend - is the extension to knowledge services. Can we get our analytics done in China and Inda.

Some examples: In the 1980s, WalMart began setting up procurement centres in China. That led to local outrage in the USA. Nike sets up manufacturing off-shore and deals with issues of worker conditions in China.

In the 199os, the focus is on the extenstion of the footrpint for new consumers. In 1995 KFC expands dramatically in India then pulls back. Outrage because of the oil used to fry the food included pork fat (an insult to local religion). In 1996 McDonald’s opens its first stores in India - and today is a destination restaurant for the elite of the country. That impacts communications dramatically.

Today the growth of telecommunications means we have more options for back street services. One challenge was Dell with the outsourcing of moving its call centres to India due to the problems of accents. How do you control the perception of quality? You can change the quality issues, but addressing the perceptions is harde.

The outsourcing market in India today is $70 billion - and that’s growing with knowledge work today. Pharmaceuticals is growing fast with a lot of knowledge work being undertaken in India.

From a communications perspective, how do you take advantage of it as a communications professional? How do you convince internal stakeholders that this may work? Finally - where does the value shift stop?

When it was manufacturing the argument was the loss of blue collar jobs meant the growth of white collar jobs. But now that white collar jobs are being outsourced this adds a whole new challenge to communications.

Many services: legal, engineering, medical, software, marketing, advertising, pharmaceutical. So many areas now able to be outsourced.

Next phase: Can high touch/customisation, high value roles be outsourced (eg, McKinsey)? Debjani believes no. Instead low customisation, low value starts. But the next phase is high customisation and low value services. EmPower offers:

1] 24/7 media monitoring

2] Measurement and audit on demand

3] Competitive intelligence

4] Market and trend analysis

In conclusion, how do you balance business needs versus sentiments of nationalism? How do you balance price and quality? Perhaps build appreciation among stakeholders for total value creation, versus the shift from one centre to another.