Business Without Borders, or Does Geography Matter?

Ann All

An ongoing debate for those buying enterprise software is whether it's better to buy a packaged solution or best-of-breed components. While the answer is rarely the same when it comes to purchasing hardware or software, the best-of-breed approach is emerging as the clear favorite in services contracts.


A growing number of companies discount geographic barriers (cultural barriers are a different matter) as they determine the most efficient way to produce their products and services. In fact, blogger Oren Harari opines that the terms "outsourcing" and "offshoring" are rapidly becoming irrelevant.


Instead, says Harari, companies like General Electric and Procter & Gamble are defining their outsourcing arrangements as "global webs of best-of-breed relationships" and choosing their partners based on overall value rather than the lowest price. Such firms will become "hubs of best-in-class capabilities and contributions from anywhere around the world," he predicts.


Certainly a desire to seek out best-of-breed relationships has contributed to the trend of companies choosing multiple, smaller, multinational deals rather than the monolithic, single-supplier arrangements that were more common earlier this decade.


Though corporations are well on their way to achieving this borderless model, governments are not, points out Forrester Research. The research firm taps an insular view of nations as closed systems as "the biggest flaw in most innovation agendas."


A better idea, says Forrester, would involve governments partnering to create global "innovation networks" -- sounds a lot like the best-of-breed approach to us.

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