What is the history behind Sierra Atlantic? How did it turn into an offshore outsourcing vendor?
Sierra Atlantic started 11 years ago and Oracle was the first and largest customer for the company. When I joined the company in 1999, it was a $10 million company with a strong focus on the Oracle technology stack. When the downturn hit nearly all companies at the end of 2000 and 2001, we refocused the company toward an offshore enterprise applications services model. Today, we do a lot more focusing on Oracle applications and help companies figure out how to implement and support what they have. Why offshore the work to India? Why can't your firm use employees based in the United States?
The offshore model is a really compelling model, because there's a tremendous cost savings. It's used by Oracle applications customers to offload projects and functions that are generally routine and areas that give their employees time to do new projects rather then focusing on older technology. A lot of our work is conducted by employees we bring into the United States on a contractual basis. How can U.S.-based IT workers be more competitive in the workplace?
I think the clear trends these days are in Web services and service-oriented architecture projects. There is also a movement toward open source technology. Linux is moving on the operating system side and in other commodity technologies, and it's becoming compelling to companies. Oracle's grid computing initiative is also an area that I'd look at, as its reducing the cost of computing on the hardware and systems software side. In the applications sector, the on-demand computing model is really starting to mature well and we're seeing successes in smaller startups.
We are taking on some higher skills. We've got a detailed knowledge of applications and advanced technology like 10g. What I'm trying to differentiate here is that we take over the skills that are done routinely and pretty quickly. We've also been doing new module implementations. What kind of work is Sierra Atlantic getting?
Oracle customers represent about three quarters of all our work. The sweet spot now is in implementing new modules of Oracle applications. Once the work is done on site, we also perform daily maintenance operations and support. We have both a technical and functional help desk located offshore, and we also help firms with enhancements and integration work, which is conducted onshore. Companies are trying to avoid the negative attention they get from offshore outsourcing. How do you convince them to sign on?
Oftentimes we have to educate them and take it one step at a time. We can show them that we see the offshore model effectively and profitably, and that it's a win-win situation for all involved. At first they are unaware and skeptical of what you can do offshore, but once we show them that we can effectively execute a project and get them comfortable with the model, they've been happy with the results. Sometimes companies think they'll be always working with people operating halfway around the world, but in reality it's the exact opposite on major projects.
A good example of a company that we've gone through a cycle with is the Clopay Corp., based in Cincinnati. We won an Oracle 11i upgrade project in a competitive bid; it was executed entirely on site. We brought people over to work on that project and during it we began to socialize the idea of how we can continue to support the project using our offshore model. We started with a three-person team and now we have a much more substantial relationship. So, it's easy to take baby steps.As offshore outsourcing becomes more controversial, states have been working to develop legislation that halts the use of offshore workers. How is Sierra Atlantic responding?
The trend in the use of offshore resources has to do with continual pressure on companies to operate more efficiently and cheaper then ever before and, if you don't meet those goals, your market share will decline. We've got a number of startups that must conduct product development offshore before they can raise money from the venture community and execute products in an efficient way. The offshore model is what enables these companies to get their funding and survive.