What is Second Generation Outsourcing?
As per Anantara:
"First generation outsourcing is predicated primarily on cost arbitrage which is now almost eliminated. SGO shifts focus from cost arbitrage to creating business value."Does it make sense? Not much? Then Let's google on Second Generation Outsourcing and see what we find.
- The very first link that is listed on my google search is from Site Selection Magazine in an Article published in March 2002. Interesting!!! What is more interesting is that Second Generation Outsourcing is being used in Site Selection Magazine with Real Estate. In fact, firms such as CB Richard Ellis (CBRE) have been providing SGO related to real estate and property management. CBRE will basically outsource the contract to its vendors and manage property for its clients. Let's take this metafor and replace the real estate with IT: Here is how outsourcing is defined. Now when the company to which the work is outsourced, further outsources the work to other vendors - it is Second Generation Outsourcing. :)
- The second link took me to AVRIO - an Association of Law Firms. It has described its comments in relation to TUPE (Transfer of Undertaking - Protection of Employment) Regulation of EU. It says:
"This included first generation outsourcing, that is from first customer to
first contractor; second generation outsourcing, that is from first contractor to second contractor; and contracting in, that is bringing the service back in house. "
I changed my google search and replaced it with Software Second Generation Outsourcing and I found a site called as RussSoft as the first hit which is a copy of an article published on Nov , 2006 in Computer Business Review. This article defines seoncd generation outsourcing as a very similar process to what is described in AVIO's site. That is the work is moving from Vendor A to Vendor B because of change of Vendor.
I guess I need to do more reading!!!