Managing Customer Relationships in Offshore Outsourcing: B2Bcs, an Israeli Consulting Firm
(7 pages of text)
This case examines an Israeli firm, B2Bcs, which provides end-to-end services in establishing offshore project development teams and helping firms in their decisions to outsource projects offshore. An interesting aspect of B2Bcs’s work involves cross-cultural partnering, and interfacing Israel-based client organizations with service provider organizations in India and Eastern Europe. However, the recent economic downturn has made B2Bcs’s customers very cautious about the decision to set up offshore development centres. Recently, Israeli firms have been looking for less expensive outsourcing solutions as part of their various cost-reduction initiatives. They expect low-rate quotes from offshore service providers of low-cost destinations such as India and Eastern Europe. However, India has not been hit very hard by the recession, unlike the West, and hence the prices quoted by Indian service providers are still very high.
Recently, B2Bcs has been facing stiff competition from similar consulting firms. The key to getting business in this area is based on one’s past relationships with key executives in client and vendor firms. Increasingly, other consulting firms have started exploiting these relationships to get new business, thus affecting B2Bcs’s growth plans severely. In such a scenario, two broad questions need to be answered: 1) What is the new value proposition that B2Bcs should now offer to its clients? 2) How can B2Bcs help its clients find the right service provider at a competitive price?
This case has been written to teach concepts in offshore outsourcing to students in business management courses, as well as courses in strategy and information systems. Students will learn the offshore outsourcing lifecycle process from both the client firm perspective and service provider perspective. They will also discuss the existing value propositions offered by B2Bcs to its Israeli customers and service provider customers, and will identify the new value proposition that B2Bcs should offer to retain and enhance its customer base.
Israel/India, Small, 2009
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