Managing Global Uncertainty Demands the Adoption of a Second Generation Technology Sourcing Strategy

PWI executive briefing paper reaffirms the notion that to help mitigate geopolitical risk and drive innovation companies must implement a technology sourcing strategy that includes Russia.

Red Bank, N.J., -- June 11, 2002. In its February, 2002, report Russia: Offshore Software Development - Diamond in the Rough, PWI urged companies to examine the feasibility of adopting a second generation sourcing strategy for offshore software development. "The primary reason for doing this is to create a robust network of geographically distributed partners, each with distinct skill, productivity, economic and cultural attributes. Through this sourcing network, selection is geared to the unique characteristics and requirements of each particular initiative," says Greg Salvato, the report's author

A byproduct of implementing this strategy is a newly found and explicit capacity for a company to spread its geopolitical risk across a more diverse base of offshore service providers. "Managing geopolitical uncertainty was not the primary message in our first report. However, it's become a hot topic for the companies we've been working with," says Salvato. "Our clients have been asking us where and how Russia fits into this strategy. This briefing paper is a concise explanation that makes clear not only the where and how, but also the why," he continued.

Adopting a second generation sourcing model does not require a company to make wholesale changes to its mix of technology vendors. Rather, companies should expand their lists of service providers to selectively include companies in different geographic regions offering certain skills and competencies that complement the overall IT plan. Doing so requires a thoughtful and deliberate examination of the available options performed within the context of the company's current strategy and future requirements. As the relationship with a new vendor matures, it is fortified with the accumulated knowledge and experience that comes from the successful delivery of key projects. Over time, the "safety net" that is woven and tested provides an insurance policy against an unforeseen break in a company's access to skills, networks and key technologies.

Few Russian companies are tuned to take on the large enterprise outsourcing deals that are emblematic of the Indian offshore model. "Companies should look specifically to Russia and its human capital and knowledge resources to accelerate the new product and advanced systems development and R&D that will drive the next wave of technological advancement and economic success," concludes Salvato.

Astute first-movers are aware of the scale of existing and emerging talent and the range of specialized expertise that Russia offers. Organizations that intend to thrive in the hyper-competitive markets that define their industries should follow the example of other industry leaders and begin staking their claims by expanding their sourcing networks.

In times like these, companies can ill afford to not be investing in second generation sourcing strategies.

The executive briefing paper is available on-line at PWI's web site (http://www.pwicorp.com).

About PWI
Headquartered in Red Bank, New Jersey, (www.pwicorp.com) PWI provides advanced technology solutions in analytics, communications, security services and transaction processing to support the core business and product management functions of corporations across a range of vertical and horizontal industry segments. Led by client and project management operations in the US, and fueled with Russia's finest programming resources, PWI expands IT capabilities, stretches IT budgets and delivers sustained ROI, innovation and competitive advantage.

Contact Information:

Gregory Salvato
(732) 212-8110 ext. 235
gsalvato@pwicorp.com