The focus of this chapter is on understanding how firm resources and capabilities serve as the cornerstone for competencies, and, ultimately, a competitive advantage. However, when firms cannot create value in either a primary or support activity, outsourcing becomes a potential strategy. Yet with the recession that began in 2007 there seems to be a shift occurring. According to the International Association of Outsourcing Professionals (IAOP) at their 2008 annual conference, nearly 75 percent of organizations will do the same or more outsourcing in response to the financial crisis and that greater contract flexibility is their top need. However, 25 percent of organizations reported lower volumes and 19 percent said they have renegotiated lower prices on existing contracts. In addition, the IAOP reports more than 53 percent of respondents say they are doing more due diligence and also favor working with larger providers.
During that same 2008 conference, the IAOP announced their Global Outsourcing 100, a ranking of the world’s best outsourcing service providers. The evaluation process mirrors that employed by many top customers and considers four key criteria:
(1) size and growth in revenue, employees, centers, and countries served; (2) customer experience as demonstrated through the value being created for the company’s top customers;
(3) depth and breadth of competencies as demonstrated through industry recognition, relevant certifications, and investment in the development of people, processes, and technologies; and (4) management capabilities as reflected in the experience and accomplishments of the business’s top leaders and investments in management systems that ensure outsourcing success. Below are the top 10 for 2008.

1. Accenture 

2. IBM 

3. Infosys Technologies 

4. Sodexo 

5. Capgemini 

6. Tata Consultancy Services 

7. Wipro Technologies 

8. Hewlett-Packard 

9. Genpact 

10. Tech Mahindra 

Split up into groups and pick one of the Global Outsourcing 100 to analyze. The complete list can be found on the IAOP website at http://www.outsourcingprofessional.org/. (A new list is published annually in Fortune magazine and updated on the IAOP website.) Prepare a brief presentation using your research and the contents of this chapter that addresses at a minimum the following questions:
• Why was this company chosen? What has been their history as regards outsourcing as a source of revenue?
• How does the firm describe, or imply, its value proposition?
• What unique competitive advantage does the firm exhibit?
• Do you consider this to be a sustainable competitive advantage? Utilize the four sources of sustainable competitive advantage as your guide.