Ironically enough, and with no stereotyping or political punditry intended, the French have shown more backbone than their offshoring lemming comrades from the rest of the developed world in resisting the urge to move core business processes overseas. That wall of Gallic stubbornness is starting to crumble, but still leave it to the French to do things just a little bit different.
The rest of the West typically find a supposedly complementary partner in India or China or Malaysia, get mesmerized by the lure of cheaper labor, and voila! Traditional costs are magically cut, core technology and processes are transferred, and an overseas company becomes richer.
As this article from The Economic Times of India outlines, the French prefer a more organic approach. Instead of finding an independent partner, they create their own offshore subsidiary or acquire a smaller firm.
A slew of French companies, including Altran, Atos Origin, Bull, Capgemini, GFI Informatique, Silicomp, Sopra Group, SQLI, Unilog (Logica CMG) and Valtech have opted to create their own offshore subsidiaries — many of them located in India. A Forrester Research report points out that apart from Capgemini’s deal with Kanbay, most companies chasing inorganic strategy have ended up acquiring smaller firms — 200 employees being the maximum. In addition, French services firms do not see long distance partnerships a ‘viable option’, Forrester added.
If a company believes it must offshore, then there are definite advantages to remaining the boss and having full control over the offshore entity. Intellectual property is protected, full costs become better understood, and contractual arrangements, particularly escape clauses if the desire to globe trot arises, become simple.
And unless the company is trying to be closer to new customers in those foreign markets, it may soon realize that offshoring isn’t all that it was cracked up to be.