Atul Vashistha Knows the Power of Outsourcing

Atul Vashistha explains how, when done right, globalized staffing and sourcing can provide benefits for companies, consumers, and communities.

As common as globalization and outsourcing have become, the concepts can be extraordinarily polarizing. Atul Vashistha, founder and CEO of Neo Group, understands both the positive and negative perspectives of these processes. However, he has also seen that, if handled correctly, these practices can be beneficial for companies, consumers, and communities. Neo Group, which helps clients become what Vashistha describes as “better globalizers,” accomplishes this by helping them focus on four key strategies: what to globalize, where to globalize, who to globalize to, and how to manage globalization. “You can’t simply outsource and have it be successful,” Vashistha says.

To illustrate this point, he refers to a gaming client that engaged Neo Group after it had outsourced nearly its entire research and development staff. This decision had resulted in a 400 percent increase in the outsourced software development having to be reworked in order to fix mistakes, which negated the very savings and efficiencies the initiative had been expected to produce.

To avoid such outcomes, Neo Group works closely with clients to develop a comprehensive analysis of their intent and strategies through a “co-creation” process. This includes assigning client employees to the Neo Group team to facilitate smooth and efficient communication in both directions. The integrated team helps Neo Group advisors understand the client organization better and enables employees to become ambassadors for introducing Neo Group’s data-driven analytical processes and supporting them on an ongoing basis.

Following this approach, a semiconductor client was able to reduce the cost structure of its technology run operations by two-thirds over the course of six years. This involved shifting its engagement model from on-premises to a global model, which focused on managed services instead of staff augmentation and implemented benchmarks that were supported by dashboards and scorecards to maintain and monitor appropriate metrics. “Clients that have the discipline to follow a systematic process to identify opportunities, ensure good governance, and maintain continuous improvement of efficiencies and productivity and are open to new approaches like analytics and automation get the most out of global sourcing,” he says. “They understand that success requires constant nurturing.”

In addition to being an expert on globalization and outsourcing with three best-selling books on the subjects, Vashistha is also devoted to ongoing learning and sharing best practices. He is an adviser to several start-up companies and a founding board member of the International Association of Outsourcing Professionals. He also serves on the boards of YPO, the Sourcing Industry Group, Shared Assessments, LatAm
Alliance, and the Department of Defense’s Defense Business Board.

“All of us have a responsibility to give back, to pay it forward. My board activities help ensure that my industry stays healthy, but they’re also tremendous opportunities to interact with peers and get exposure to a variety of different approaches and ways of thinking,” he says.

Vashistha recently founded the Global Business Services (GBS) board to create a network of GBS Heads of Global 2000 companies. Representatives from some of the world’s largest corporations recently joined a GBS conference call to share ideas, challenges, and solutions related to operations maturity and automation. Vashistha was surprised by how candid, supportive, and forthcoming all the participants were, even when discussing their shortcomings. The experience inspired him to develop
SourcingBoard.org, which launched in the fall of 2016. It offers a buyers-only curated peer network for leaders who source technology and technology-enabled services in a confidential and moderated environment, where they can learn from one another. Vashistha expects to have 500 members by 2020.

Creating such educational spaces reflects the importance Vashistha places on learning, a lesson his daughter taught him when she was just eight years old. Vashistha appeared in a CNN interview on the impact of global outsourcing, and afterward, she pointed out that he needed to “pay attention to why some people don’t agree with you.”

The comment impacted him in several ways. First, he began focusing on the arguments of globalization detractors and responding constructively. For example, he emphasized the need for outplacement and retraining for employees whose jobs are outsourced. Secondly, he became acutely aware of the impact girls have on their families worldwide. Ever since, he has contributed to numerous international organizations that support girls’ education.

All of these experiences and priorities have led to Vashistha’s vision of Better Place 360, a formalized version of “giving back.” It extends beyond his belief in the benefits of outsourcing to the idea that globalization changes people’s lives. He points to huge middle-class growth in places such as China, India, Brazil, and the Philippines and greater access to affordable goods for many, helping to raise standards of living. This has occurred simultaneously while enabling US companies to be more competitive worldwide.

He concedes that outsourcing and technologies associated with it can also contribute to difficult transitions for workers in the United States and elsewhere. For example, the Foxconn workforce that produces iPhones outside Shanghai was reduced by 55 percent in two years due to automation. So, as part of Better Place 360, Vashistha contributes half of his book royalties to organizations that support programs for education and retraining. He also encourages associations to provide those services along with job placement and training for younger workers so that they are prepared for the marketplace. He encourages Neo Group clients to do the same.

“Through sensible, responsible globalization,” he says, “there are tremendous opportunities to create our own version of the future, but we have to have the courage to seize it.”