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Go Global or Source Local?

Peter Glock
8/19/2013

How much value does using a global supplier, as opposed to a multi-local sourcing strategy, bring to multinational organizations?

I work for Orange Business Services . The company has an interesting history, as it started off as part of the air transportation industry in 1949 and still runs the core communications network for airlines, airports and other industry players. This means that if you can land an international flight in a city, then we have at least one communications node there.

Servicing our customers drove us to build the world's largest and most distributed network and service platforms. It's easier to say where we don't operate (currently about five countries such as North Korea) rather than where we do.

This history gives us a bias towards working with multinational organizations that recognize the value of truly global suppliers.

However, sourcing strategies in many multinationals mean they adopt regional, even in-country sourcing for some or all of their information and communication services. Part of our challenge is to demonstrate the value of global or multi-regional sourcing before we even get to giving proof-points around how brilliant our services are.

So, how do we go about convincing a potential customer to consider a global deal? The detail is part of our secret sauce, which I'm hardly likely to reveal in a blog post but, in essence, it's about looking at the cost and risks of managing multiple suppliers and the scope to share infrastructure costs across a wider business base.

For example, if a multinational is upgrading from legacy PABXs to IP telephony as a step towards full unified communications and collaboration, we could propose a regional or global service which would share the cost of the infrastructure across multiple business units and countries. We could also take over the legacy and manage the whole project, perhaps on a per-user service basis rather than capital expenditure if that's what the customer would prefer (and many do).

Sound compelling? We think so. But some organizations still prefer to source locally for a variety of reasons.

If you work for a multinational, or sell to them, what's your experience of global versus local buying behavior?

— Peter Glock, Solution Director, Orange Business Services

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F,Alpizar
F,Alpizar
8/31/2013 | 12:16:14 AM
Re: Either/or?
I worked too for a global solutions provider, but on the other site, the locations where the services end.  In my experience, local branches want/need much more support than the main office is willing/able to provide.  Thinking globally and acting locally also works for telecommunications!
Peter Glock
Peter Glock
8/19/2013 | 1:09:21 PM
Re: Either/or?
Sarah,

We've found that both approaches are needed to match the complex requirements for many of our customers. To meet the local requirement we have an approach called 'Vendor Managed Services' where we manage a local provider on our customer's behalf. The challenge here is to justify our management fee!
Sarah Thomas
Sarah Thomas
8/19/2013 | 12:03:27 PM
Either/or?
Thanks for the post, Peter. Do you find it's an either/or for most service providers, or do some do a mix of local and global depending on the need? 
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