The Research Industry Summit on Data QualityThe Marketing Research Event
Las Vegas, NV 2009
Tom H. C. AndersonCEO, Anderson Analytics
Founder & Chairman, Offshoring Transparency Foundation
What I’m Not Going to Talk About
• Is Western MBA or PhD = MBA or PhD elsewhere• Macro Economics• Politics/Nationalism• …
Please keep in mind: • Not Anti-India• Not Anti-offshoring• Offshoring is a fact
..but…• Trust, Data and IP Confidentiality is critical
so must have this discussion!
What I will Talk About
• Market Research, KPO, India • MR “2/3 of MR firms off-shore”• Types: ITO BPO KPO
(KPO est. $17 billion market 2010)• India (expected to capture 70% of
market share)• No Offshoring, Captive/Wholly
Owned, Third Party, and JV • Lack of Transparency in Offshoring!
• India aka “Region 13” • Biggest problem with offshoring• A solution!
Offshore Employee Issues (Qual Exploratory)
• Research among professionals in off-shoring business.(Issues from their perspective)• Frequently quoted benefits/concerns
• Time zone coverage, benefit but…
“Access to resources AND
Reactive/Flexible Employees”
“Should Market Researchers
Regularly have the 2:00am shift?”
“Hierarchical/Lack of Creativity/No
Pushback”
“Abundance of MBA’s and
PhD’s”
Supplier AND Client Issues (Exploratory)• Challenges
• Ethics - In China “Guanxi”, in India “Bakshish”• India ranked 85th out of 180 countries in corruption
(Transparency International/Cambridge University Press/Ernst & Young 2009)• Data confidentiality breeches (Both IP and Customer Data) • Highly Competitive = Little Loyalty
• Churn. Attrition rates Remarkably high (30-50% for BPO/KPO, over 100% for ITO!)
• Inherently dangerous, constant movement of confidential data• Employees/Ex-Employees highest risk for breech
• No Protection• Risk: On US Trade Representative Priority IPR/301 Watch List• Lack of Compliance: NO Gramm-Leach-Bliley Act, NO SOX, NO HIPPA, • NO EU-Safe Harbour… (send it to Romania)• Lack of Law: No Statute on IP, Work for Hire (Must have contracts) S. Baldia• Contracts must cover subcontractors and employees• India Ranked 182/183 in enforcing contracts by The World Bank!
Most Important (What Client Wants)Quantitative Research
• Next Gen Market Research Group on LinkedIn (NGMR)
• 6,000+ Market Researchers
• NGMR Survey Currently in Field n>800(73% US, 27%ROW)(19% Buyers, 76% Suppliers, 5% Other)
Do “2/3” of Companies Really Offshore MR?(Among MR Suppliers n=586 Client n=145)
ClientsSuppliers
Transparency Gap
Most Important (What Client Wants)
• What is your personal feeling on Offshoring any part of themarketing research function?
1. It is necessary and a good way for companies to stay competitive
2. 3. Neutral4. 5. It is not as profitable as others think and is fraught with
risk
Mixed Feelings (What Do Client Want/Expect?)
AllSuppliers
Clients/Buyers
Pro Offshoring
Wary of Offshoring69%61%
31%40%
Most Important (What Client Wants)Suppliers - Who is Offshoring?
Transparency Gap (What Clients Want/Expect)Suppliers Utilizing Offshoring vs. Clients
• Percent ”OK” with this part of MR value chain being offshored
OK
NOTOK
Transparency Gap (What Clients Want/Expect)Suppliers Utilizing Offshoring vs. Clients
• Percent ”OK” with this type of MR project being offshored
OK
NOTOK
Transparency?
• Q. Regardless of what your stance is on offshoring, do you believe research suppliers have an obligation to tell their clients that they offshore?
>Yes, companies need to be transparent
>No, that's proprietary information
Transparency (Almost Everyone Agrees!)
68%
31%
73%
26%
61%
38%
90%
8%
Most Important (What Client Wants)
Thank You
www.OffshoringTransparency.org
Register Your Co./Require Your Suppliers to Register Show your support on LinkedIn, Facebook or Twitter