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

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