NEWS26 November 2009

Offshore transparency debate ignores quality issue, says Annik chief

Asia Pacific Features North America

INDIA— A leading player in offshore market research has raised concerns that the recently-launched Foundation for Transparency in Offshoring (FTO) risks diverting the debate around outsourcing away from the issue of quality.

Rahul Sahgal, chief executive of Annik Systems, disputes the FTO’s claims of an “offshoring cover-up” in the industry. “I do not believe [offshoring] is a secret,” Sahgal says, stating that all of the top 50 research agencies and many small and medium-sized business are in some way involved in it.

“I always like to have a healthy debate on outsourcing and offshoring, on the pros and cons,” said Sahgal. “It will always be better for the industry to do so. There are a lot of ‘fly-by-night’ operators who can do more harm than good.”

But in an interview with Research he expressed a mixture of surprise and disappointment at the way the offshoring debate has been pursued by the FTO. “I think it pushes a line, or crosses a line, in terms of the original tenets of having a debate on offshoring.”

In a bid to ensure transparency, the FTO offers a self-certification system which asks agencies to divulge whether they offshore or not, which parts of their projects are offshored and which countries they outsource to. Agencies who offshore get a badge to say so, while those who don’t are given a ‘No Offshoring’ icon to display on their website.

Sahgal takes exception to the existence of a ‘No Offshoring’ badge. While he is ready to acknowledge that there are parts of the research process not suitable to being offshored, he says: “To put a ‘No Offshoring’ certificate on a company website is like putting a ‘No MSG’ badge on food – you are implying it is a bad thing.”

He also questions whether a basic disclosure of an agency’s offshoring arrangements are enough to help research buyers “make informed decisions and trade offs between cost and quality as well as the protection of intellectual property and data security” [to quote the FTO website].

The FTO certification system makes no demands on agencies to disclose which suppliers they use and what standards those suppliers adhere to. Sahgal says clients concerned about IP and data security issues should check that offshore service providers subscribe to such standards as ISO 27001, which relates to data security and integrity.

For market research processes specifically, he points to ISO 20252 – “but its a very basic, entry-level standard,” says Sahgal. There are “more stringent” business process standards out there, he says, such as the CMMI certification developed by the Software Engineering Institute of Carnegie Mellon University. Annik holds CMMI Level Three certification.

Sahgal has a particular interest in the development of FTO. Besides being involved in the offshore business, it was he who invited FTO founder and chairman Tom Anderson to debate the merits and pitfalls of offshoring at The Market Research Event in Las Vegas in October, which preceded the launch of the initiative.

The FTO could not be reached for comment today. It states that it holds “no position for or against offshoring research services, but maintains transparency and open dialogue between research buyers and suppliers are critical to making informed, secure business decisions”.

1 Comment

15 years ago

I think a very important issue is still out of sight in off-shoring and it is the transparency in invoicing. It is not a secret that many companies offering off-shore services are engaged in tax-avoidance and thus in money-laundry, but somehow this is nobody's issue...i

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