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Outsourcing: Jean Cholka, President and CEO Of Freeborders (Part 3)

Posted on Friday, Sep 3rd 2010

By guest author Tony Scott

Winning Customers as a New Entrant in a Competitive Environment

Tony: When you talk about your customer base, what is your sweet spot?

Jean: We’ve worked with some big companies, but our sweet spot is the guys who have off-shored already or who are interested in China and want a connection to China. They need someone here in the U.S. who knows China so that they can work there more effectively. We’ve worked with some big companies on this and with some smaller ones that are just under the radar.

Tony: When you approach a potential customer, what do you tell them? Are you pitching that your core competitors are large, and that your being smaller and more focused allows you to provide better service? Or do you take the approach of saying that we have three or four solutions that we know and can deliver on better than anyone else?

Jean: We are too small for that. Certainly, I wouldn’t want to deceive our customers in any way. We go in and take a hands-on approach based on what we perceive their need to be. We are either going after a couple of software packages that we know they have, and we say: “We have expertise in these packages, and we can take the maintenance and reporting of that off-shore for you and do it for less than you pay now to the vendor or that you are spending with your in-house staff.” This is all typically around the capital markets space where we have some specialized expertise.

Tony: So, Freeborders will take on the maintenance and basic support for those packages?

Jean: Yes, that’s one angle. The other is where we know that they are either shifting to a new system, either to a new package or one they are building in-house, and we know that this is part of their strategy. We go in and say: “We have the consulting capability that can help you figure out how you can best accomplish this, so that you can use your key talent for something else.”

We won’t try to take on something if we don’t know how to do it.  We will use our consulting capability to help them figure out what we can do, and what they should do themselves. We won several customers by going in and saying: “We know based on what’s happening in your business or in the industry overall, the challenges you may be facing. We believe that by helping you understand that aspect of your operation, we can help you to create a road map so that you can be more competitive in these particular areas.” It’s truly in a fairly narrow area of the capital markets in which we ask customers to let us help them through our consulting.

Our hope is that eventually they will hire us to do the maintenance or build applications for them. About half the time that happens, but if it doesn’t happen immediately, that is OK, because we are building trust and a better relationship, and you never know when it will come back around and a good opportunity comes to light for us.

Tony: Are you seeing more of a push by CIOs to outsource, given the pressure they have on their expense lines?

Jean: Yes, and at the same time there is a great reluctance to give up expertise in many medium-sized banks. They want to make their IT organizations more lean, without losing expertise.  Again, here is where our consulting skills come in to play – we help them figure out what they need to keep in house, and what they can outsource. But they are all under pressure to cut costs in a significant way. Even if you look at the most conservative, healthy U.S. banks, even those banks are under pressure to lower costs.

In other cases, it is both cost driven and opportunity or talent driven. If you look at Ticketmaster, for example, they have a double interest in off-shoring. They want to be in the China marketplace because they need to lower costs, but they also have to deal with skill shortages because they have aging technology that’s hard to service in the United States.

This segment is part 3 in the series : Outsourcing: Jean Cholka, President and CEO Of Freeborders
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