Rural Sourcing: Trend or Main St. Savior?
Download as PPTX, PDF•1 like•510 views
This document discusses rural sourcing as an alternative to offshoring for IT services. It provides an overview of Liaison Technologies' rural sourcing program based in Carbondale, Illinois. Some key points: - Rural sourcing offers lower labor costs (30% less than urban areas) while maintaining quality through partnerships with local universities. - Liaison established operations in Carbondale in 2010, taking advantage of lower costs and skills available through SIU. Their program has grown to 35 employees with plans to expand further. - Rural sourcing provides economic benefits to the local community by creating jobs and opportunities for recent graduates. The partnership between Liaison and SIU is mutually beneficial.
Rural Sourcing: Trend or Main St. Savior?
- 1. © Liaison Technologies. All rights reserved. Liaison is a trademark of Liaison Technologies. @LiaisonTech Rural Sourcing: Trend or Main Street Savior?
- 2. @LiaisonTech Larry Mieldezis COO Liaison Technologies, Inc. Kyle L. Harfst Executive Director Southern Illinois Research Park, Inc.
- 3. @LiaisonTech Definitions • Offshoring is the relocation of a whole process, piece of a process, a function, or a discrete piece of work outside the boundaries of the United States, either within or outside the boundaries of the company. • Onshoring is the sending work to service providers in domestic locations where salaries and operating expenses are lower.
- 4. @LiaisonTech Progression of IT Sourcing 1990’s 2000’s 1980’s Domes&c, urban firms contracted to provide IT services – OLD SCHOOL Contrac&ng or hiring in places like India and China where labor costs were lower Contrac&ng or hiring in rural communi&es within the USA or establishing distributed rural teams Contrac&ng or hiring in places such as Central and South America – lower wages, closer to home
- 6. @LiaisonTech Considerations for IT Rural-Sourcing (Offshore or Not) LABOR COSTS Annual salary, recruiting & turnover Average of 30%% less compared to urban areas, recruiting and attainment considerably lower AVAILABLE SKILLS Formal education, resource churn and stability Alignment (partnering) with a University or region where you are the big fish in the pond DATA SECURITY Regulatory, law enforcement, perception Healthcare, Financial, regulatory – completely protected by the US legal system LANGUAGE & CULTURE Inferred understanding, work ethic, expectations First language English, any other is available via services or training. MidAmerica work ethic TIMEZONE Issue or incident response, project alignment Work as a team, in the same time mode. Project Management, delivery & support (24 hours if need be) INTANGIBLES Economic incentive Embedded real interest to make your business work
- 8. @LiaisonTech Liaison’s Rural-Sourcing Program • State of the Art new Facility, access to University technical services and advances • 25 Liaison Employees located in Carbondale, Illinois – 24 x 7 Staffing model – Plan on ramping up to 35 by end of 2012 • 70/30 split of recent graduates and seasoned veterans • Global Competencies: MAPPING, PRODUCT SUPPORT, MANAGED SERVICES • Tight alignment and support from Southern Illinois University – Recruitment – Curriculum Influence – Research and Special Projects
- 9. @LiaisonTech Labor Costs – Urban vs. Rural Sourcing 2010 Dice Salary Survey – Ciber Consulting - 2011
- 10. @LiaisonTech TTP – Time To Productivity Recrui/ng ® + On-‐boarding (O) + Knowledge Acquisi/on (KA) = TTP Rural Sourcing = Delivering HIGH QUALITY work, with minimal ramp up and direc&on (LOWER THE OVERHEAD – exposes the Offshore myth of lower costs) 2010 ciber Consul0ng & Rural America OnShore Sourcing
- 11. @LiaisonTech Rural Sourcing Summary • Rural Sourcing: Offers a competitive cost model, without sacrificing quality • Rural Sourcing: Can clearly compete as an alternative or compliment to offshoring • Rural Sourcing: Skills are available in some of the most unknown parts of the country • Rural Sourcing: Invests in our people and economy right here at home • Rural Sourcing: Offers a competitive advantage and differentiation
- 12. @LiaisonTech In-Shoring as an Economic Development Strategy Kyle Harfst, PhD Execu/ve Director Southern Illinois Research Park
- 13. @LiaisonTech Carbondale Illinois • Illinois popula/on – 12,910,409 • Jackson County, Illinois – 58,103 • City of Carbondale – 25,623 • Six hours from Chicago • Two hours from St. Louis • Three hours from Nashville • Seven hours from Atlanta
- 14. @LiaisonTech Southern Illinois University • Three main campuses – Carbondale, Edwardsville, Springfield (35,000 students) • 19,000 students on Carbondale campus • 210,000 Alumni of SIUC
- 15. @LiaisonTech Office Of Economic & Regional Development • SIUC Small Business Incubator • SIUC Small Business Development Center • SIUC Interna/onal Trade Center • Illinois Manufacturing Extension Center • Center for Rural Health & Social Service Development • Community Development & Outreach • Southern Illinois Research Park
- 16. @LiaisonTech What is Economic Development? Improving the quality of life in one’s community through strengthening its economic base
- 17. @LiaisonTech Traditional Economic Development model Business Start-Ups Business Retention and Expansion Business Attraction
- 18. @LiaisonTech New Model: Cycle plus … Inshoring Research Project for Southern Illinois
- 19. @LiaisonTech How did we become involved with on- shoring?
- 20. @LiaisonTech Inshoring Research Project for Southern Illinois “as the tide shifts away from off- shoring, rural regions are evaluating similarities between themselves and those developing countries that have attracted U.S. businesses to operate there
- 21. @LiaisonTech Typology of Outsourcing Source: Gurstein P. (2005)
- 22. @LiaisonTech Typology of Outsourcing Source: Gurstein P. (2005)
- 23. @LiaisonTech An example Of a targeted industry
- 24. @LiaisonTech Liaison Technologies & SIUC • Liaison COO is an Alum of Southern Illinois University • Conversa/on started in January 2010 • Challenges with off-‐shoring • Interested in bringing those posi/ons back to the United States • Must be a financial decision to relocate – not an emo/onal one
- 25. @LiaisonTech Liaison made the decision to invest in Carbondale & southern Illinois • Established a presence in the Southern Illinois Research Park – landed in the Dunn-‐Richmond Economic Development Center • Flexible work space provided as the workload expanded • Beyond space – value added ac/vi/es • Cri/cal mee/ngs with campus units – Computer Science, Informa/on Technology, etc. • Commitment to the region by staying in Carbondale via a more permanent loca/on
- 26. @LiaisonTech From our perspective this has been a great collaborative effort! • Economic impact of addi/onal jobs in southern Illinois • New graduates have more opportuni/es to stay in this region • Addi/onal collabora/on with Computer Science & Informa/on Systems Technology departments on campus • Mr. Mieldezis of Liaison has given back to the university community through his posi/on as a board member of the SIUC Alumni Associa/on • Another company with an SIU graduate landed here during a transi/on of his business model
- 27. @LiaisonTech Thank YouQUESTIONS?ABOUTLIAISON Solutions • Cloud EAI / Data Transformation • Cloud B2B Integration Services • BPM Consulting Services • SaaS Master Data Management • Web based, Hosted EDI Multinational • Global headquarters in Atlanta • European offices in Finland, Netherlands, Sweden, UK • More than 6000 customers worldwide in over 35 countries Larry Mieldezis COO Liaison Technologies [email protected] Kyle L. Harfst, PhD, MBA Executive Director Southern Illinois Research Park (618) 453-3427 Direct http://researchpark.siuc.edu