Sinking like a BRIC

Better Choices than Brazil, Russia,

India and China

Steve Mezak, CEO of Accelerance, Inc.

BRICs and the Next 11

Source: BRICs and Beyond, Goldman Sachs, 2007

B-R-I-C

“The results of the exercise are startling. They suggest

that if things go right, the BRICs could become a very

important source of new global spending in the not

too distant future. The chart below shows that India’s

economy, for instance, could be larger than Japan’s

by 2032, and China’s larger than the US by 2041 (and

larger than everyone else as early as 2016). The

BRICs economies taken together could be larger than

the G6 by 2039.”

Source: Dreaming With BRICs: The Path to 2050, Goldman Sachs, October 2003

Source: Dreaming With BRICs: The Path to 2050, Goldman Sachs, October 2003

Source: BRICs and Beyond, Goldman Sachs, 2007

Source: Dreaming With BRICs: The Path to 2050, Goldman Sachs, October 2003

Source: Dreaming With BRICs: The Path to 2050, Goldman Sachs, October 2003

Source: BRICs and Beyond, Goldman Sachs, 2007

Why Limit Yourself to BRICs ?

• Because you sell to BRIC markets

• And. . .

?

• Or. . .

Why Not Consider All Options?

Other Criteria

Distance & Time Zone

Cultural Affinity

Retention / Attrition

IP Protection

Senior

Talent

Available

Government

Incentives Universities

Basic Infrastructure

Cost

Where are they Outsourcing?Pros & Cons & Costs

• India ($20/hr)+ 80% of outsourcing

– 10 to 12 hours away

• China ($18/hr)+ Many engineers

– Limited English

• Philippines ($20/hr)+ English & low cost

– Limited tech workforce

• Russia ($25 to $30/hr)+ Analytical technologists

– Limited English & stability

• Eastern Europe ($20/hr)+ Well educated & low cost

– Limited English skills

• Vietnam ($17/hr)+ Young,enthusiastic workforce

– Limited English

• Mexico ($25 to $30/hr)+ Near & time zone overlap

– Higher cost than other countries

• Central & South America ($20 to $30/hr)+ Low cost in same time zone

– Limited tech workforce

Why is Offshoring a Failure ?

• 2008 Robert Half Survey* Says:

“Ninety-four percent of chief information officers

(CIOs) surveyed said their company does not

outsource information technology (IT) jobs outside

the United States. Among companies that once

sent IT jobs overseas but discontinued the

practice, nearly six in 10 (59 percent) respondents cited management challenges as the top reason.”

No Offshore Outsourcing

Management Challenges

* 2008 Overseas IT Outsourcing Rates Low Among CIOs Surveyed

Lot’s of Graduates, But. . .

How many are globally

competitive programmers ?

Who’s on your project?

* 2008 Getting the Numbers Right, Duke University# 2005 McKinsey Global Institute Report

#

#Dynamic Engineers*

• Capable of abstract thinking

• High-level problem solving

• Using scientific knowledge

Transactional Engineers*

• Solid technical training, but

• No experience to apply knowledge to larger domains

• Responsible for routine tasks in workplace

Offshoring Models

Body

Shops

Freelancer

Network

SW

FactoryODC BOT

Captured

Operation

Specs

Working (?)

Software

Specs +

+Specs

Software

Releases

Software

Releases

Summary

• BRIC countries are possible choices

• High economic growth expected

• Other countries should not be ruled out

• Identify your offshoring decision factors

• Select the proper engagement model

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Steve Mezak, CEO Accelerance, Inc.

Steve@Accelerance.com