Squeeze Play - Page 4 of 5

Squeeze Play

Wide Technology, says he has kept ahead of the offshore groundswell by spending on proprietary wares that no competition can duplicate–at home or overseas. Ten years ago, when offshoring was beginning to creep into U.S. high-tech markets, his St. Louis-based company reassessed its strategy of helping companies use a variety of technology to track and manage production and orders. The company shifted to focus on unique solutions to fit each customer, which requires large hardware expenditures. “We were forced to evaluate our model when we were a back-office resource-planning company making $75 million in annual revenues. That meant we had to spend $50 million a year on servers, networking equipment, EDI, XML, and bolt-on applications to develop programs uniquely designed for certain industries,” says Steward. The result: World Wide now has grown to a $1.4 billion business.

Make no mistake. “Offshoring is a trend that might be modified over time, but it’s certainly not going away,” says Kennedy, who has researched the effect of offshoring in the United States. But the impact need not be fatal. “The lesson here for business leaders is to focus on the activities you do best and where you have an advantage, skills that need to stay close to headquarters or a physical presence. Any activities outside of that, you should consider partnering up with a company with an offshore presence or establish your own,” says Kennedy.

Offshoring “is the same as any other business challenge,” says Steward. “We have to face up to the task and use the same entrepreneurship and innovation to rise to the occasion.”

There was no avoiding the bleak future of back-office work in the U.S. A few years ago, with more and more jobs drifting overseas, Lonnie Sapp decided he had no choice but to join the offshoring trend, not fight it.

Today, Sapp is arguably one of the highest-ranking African Americans in the offshoring business. He is chief operating officer for OfficeTiger, a company that has built a sizeable back-office presence in India, grinding out tasks large and small for a host of major financial institutions and Fortune 500 clients. And business is booming for the firm. OfficeTiger mushroomed from 250 workers in early 2003 to 1,200 at the start of 2004, with employees located in India as well as Sri Lanka, New York, and London. And Sapp says the company’s current head count for 2005 is more than 2,500 employees. In 2004, OfficeTiger not only snared contracts with eight of the 12 largest financial institutions in the United States, it also gained big-four accounting operations and a host of American and European law firms as loyal customers.

After the company launched in 1999, Sapp joined OfficeTiger in 2000 as vice president of operations in the U.S. But soon, OfficeTiger tapped him to supervise a number of services for clients in India, including number crunching, software tweaking, and report generating.

Sapp moved