What I’m Not Going to Talk About

1. The Research Industry Summit on Data QualityThe Marketing Research EventLas Vegas, NV 2009Tom H. C. AndersonCEO, Anderson AnalyticsFounder & Chairman, Offshoring Transparency Foundation

3. What I’m Not Going to Talk About • Is Western MBA or PhD = MBA or PhD elsewhere • Macro Economics • Politics/Nationalism • … Please keep in mind: • Not Anti-India • Not Anti-offshoring • Offshoring is a fact ..but… • Trust, Data and IP Confidentiality is critical so must have this discussion!

4. What I will Talk About • Market Research, KPO, India • MR “2/3 of MR firms off-shore” • Types: ITO BPO  KPO(KPO est. $17 billion market 2010) • India (expected to capture 70% of market share) • No Offshoring, Captive/Wholly Owned, Third Party, and JV • Lack of Transparency in Offshoring! • India aka “Region 13” • Biggest problem with offshoring • A solution!

5. Offshore Employee Issues (Qual Exploratory) • Research among professionals in off-shoring business.(Issues from their perspective) • Frequently quoted benefits/concerns • Time zone coverage, benefit but… “Abundance of MBA’s and PhD’s” “Hierarchical/Lack of Creativity/No Pushback” “Access to resources AND Reactive/Flexible Employees” “Should Market Researchers Regularly have the 2:00am shift?”

6. Supplier AND Client Issues (Exploratory) • Challenges • Ethics - In China “Guanxi”, in India “Bakshish” • India ranked 85th out of 180 countries in corruption (Transparency International/Cambridge University Press/Ernst & Young 2009) • Data confidentiality breeches (Both IP and Customer Data) • Highly Competitive = Little Loyalty • Churn. Attrition rates Remarkably high (30-50% for BPO/KPO, over 100% for ITO!) • Inherently dangerous, constant movement of confidential data • Employees/Ex-Employees highest risk for breech • No Protection • Risk: On US Trade Representative Priority IPR/301 Watch List • Lack of Compliance: NO Gramm-Leach-Bliley Act, NO SOX, NO HIPPA, • NO EU-Safe Harbour… (send it to Romania) • Lack of Law: No Statute on IP, Work for Hire (Must have contracts) S. Baldia • Contracts must cover subcontractors and employees • India Ranked 182/183 in enforcing contracts by The World Bank!

7. Most Important (What Client Wants)Quantitative Research • Next Gen Market Research Group on LinkedIn (NGMR) • 6,000+ Market Researchers • NGMR Survey Currently in Field n>800(73% US, 27%ROW)(19% Buyers, 76% Suppliers, 5% Other)

8. Do “2/3” of Companies Really Offshore MR?(Among MR Suppliers n=586 Client n=145) Suppliers Clients Transparency Gap

9. Most Important (What Client Wants) • What is your personal feeling on Offshoring any part of themarketing research function? • It is necessary and a good way for companies to stay competitive • Neutral • It is not as profitable as others think and is fraught with risk

10. Mixed Feelings (What Do Client Want/Expect?) Pro Offshoring 40% 31% 61% Wary of Offshoring 69% All Suppliers Clients/ Buyers

11. Most Important (What Client Wants)Suppliers - Who is Offshoring?

12. Transparency Gap (What Clients Want/Expect)Suppliers Utilizing Offshoring vs. Clients • Percent ”OK” with this part of MR value chain being offshored OK NOTOK

13. Transparency Gap (What Clients Want/Expect)Suppliers Utilizing Offshoring vs. Clients • Percent ”OK” with this type of MR project being offshored OK NOTOK

14. Transparency? • Q. Regardless of what your stance is on offshoring, do you believe research suppliers have an obligation to tell their clients that they offshore? >Yes, companies need to be transparent>No, that's proprietary information

15. Transparency (Almost Everyone Agrees!) 61% 68% 73% 90% 38% 31% 26% 8%

17. Most Important (What Client Wants)

18. Thank Youwww.OffshoringTransparency.org Register Your Co./Require Your Suppliers to Register Show your support on LinkedIn, Facebook or Twitter