Yogesh Pathak, CEO and founder of Path KPO Solutions, came in to brief Lighthouse this morning on a break from meeting clients in London. Path KPO is one of a number of Indian-headquartered firms leveraging their technology insight and deep analytical skills to produce ‘white label’ research for US and European companies.
After completing his MS at Michigan State and MBA at Georgia Tech, Yogesh worked at Tata Consulting Services, Booz Allen Hamilton (at the same time as my former Ovum and Lighthouse colleague Colin Brash), and in the venture capital business where he was a ‘power user’ of many of the analyst firms. At Kanbay, the premier systems integrator for finance and banking, Yogesh was central to a number of analysis and strategic planning projects. At Path KPO, he is leading an offshore services provider based on deep domain experience rather than assembly-line automation. Their focus areas are telecoms, media, enterprise software, network equipment and financial services.
It’s a rapidly maturing market. Many of the leading analyst firms, such as Gartner, Forrester and IDC, are established and comfortable in their offshoring. Of course, it’s not only analyst houses who are offshoring in this way. Evalueserve conducts telemarketing and research for our friends at Knowledge Capital, including its win/loss service. McKinsey and Company has led the way in this outsourcing, and been followed even by companies in high risk sectors such as finance.
However, these firms are typically using offshore resources for desk research, especially that involving explicit methodologies and repeatable tasks. There remains a lot of caution – rooted in concrete bad experiences – in using these firms for interviewing, consulting, analysis of ambiguous scenarios and relationship-based work (indeed, this is also Lighthouse’s experience – we offshore more of our desk research for European clients to the US than to India). As a result, to use Yogesh’s term, most firms are using outsourcing to solve ‘pieces of the puzzle’. In particular, analyst houses are able to take advantage of the longer-term availability, better capacity management, longer working day and stronger quantitative skills of offshore prodviders. However, many firms are still not comfortable offshoring higher-value activities, despite the cost advantage.
The challenge is to encourage firms to outsource more of each activity, rather than just ‘pieces of the puzzle’. Yogesh argues that this is because of the learning process. Higher quality research requires intelligent understanding that is based on the end-clients’ needs. That means more than building deeper industry expertise. He points out that the communcations cultures and analytical awareness changes widely between countries.
I would also add that there’s a particular chasm to cross with the US. Communication is generally direct, but negative feedback is oblique while praise is more fulsome than in Europe or India. Fluency in mathematics and statistics is less developed in the US than in most other industrialised countries, as the OECD has noted: this reduces the common vocabulary and means that the numerical content in work delivered needs to be either lesser, or presented more simply.
Offshored analysts? Sounds like the borgs holidaying in Hawaii….