21 Lessons from 20+ years of business advisory to global companies entering US services markets

In the dynamic landscape of the US digital and outsourcing markets, global vendors must stay ahead of the evolving needs and preferences of service buyers from a country regularly at the apex of global revenues. This chapter dives deep into case studies that speak to these lessons and provide a pragmatic lens through which vendors can most effectively participate in these markets.

Buyers Prefer Solutions over Individual Tech Skills

Vendors that can offer tailored solutions to business problems will have a better chance of winning suppliers' favor than pure-play technology vendors. For example, an IT service vendor approached a major retail chain with an AI-based inventory management system. The system, which was more than simply a piece of software, integrated supply chain management, real-time analytics and predictive modeling with the retailer's existing infrastructure. It allowed the company to track purchasing trends, optimize stock levels and predict supply chain disruptions. The advantage of taking this approach over buying standalone technology services was that the solution was tailored to the company's needs and addressed several problems at once.

Industry Vertical Experience Matters

Companies that already have momentum in the same vertical market as the buyer, and customer references to prove it, are seen as less risky than industry newbies that offer a lower price. For example, a healthcare provider needed a technology partner to move up the patient data systems maturity model. The vendor it selected has built a state-of-the-art secure patient data exchange platform that meets the Health Insurance Portability and Accountability Act and other healthcare regulations that proven to protect patient records and data privacy while sharing patient records across various healthcare providers within its network as required. The vendor proved it knew the healthcare industry, including the nuances of health data and working within all the different medical systems, by already creating a hub for secure patient data exchange. 

History of Serviced US Companies is Credibility

US clients prefer the system vendors who have a proven track record in the US, rather than those who have not, all things being equal. For example, a European IT services supplier had previously implemented a large-scale, cloud-based CRM system for a leading tech company headquartered in Silicon Valley, CA. This project involved migrating very large datasets to the cloud, integrating multiple business processes into the CRM suite and training staff in the new use of the system. The vendor highlighted this experience in their marketing materials and proposals to new US clients. What they tried to demonstrate is that they were capable of assuring potential and current clients in the US of their ability to undertake complex engagements. Their messages were received well and sound.

Case Studies and White Papers Influence Buyers

While certifications demonstrate technical skills, case studies show you performed in real-world commercial environments. An Asian vendor was in the running to win a large digital infrastructure project in the US. They used a number of case studies and white papers to help prove that they had the expertise. One of the case studies highlighted was a smart infrastructure implementation city-wide in which they were responsible for integrating IoT devices, public Wi-Fi networks and an urban data analytics platform. The case study demonstrated how this implementation increased the improvement of city services, reduced costs, and engagement amongst citizens was outstanding. This approach strongly influenced the decision to buy by the US service buyers.

Importance of Local Presence in the US

Most US buyers prefer that suppliers have staff available for regular in-person contact and an onshore delivery presence because the services often require the buyer and service provider to work together in close cooperation. As a result, many offshore vendors are excluded from becoming preferred suppliers on large deals simply because the buyer can’t talk directly to decision-makers. A technology firm from Southeast Asia, for example, struggled to win any significant contracts in the US market because it lacked a local presence. It did, however, manage to establish a presence in California by hiring local professionals familiar with working in the US who could better align with US clients’ working hours, provide quicker responses to queries and show a deeper understanding of US market needs. As a result, the company successfully won a contract to provide Internet of Things solutions to a network of smart homes thanks in part to its local presence, which helped the company to build trust and understanding with the client..

Critical Role of an Sales Expert as a US Team Leader

In order for foreign suppliers to be successful in the U.S. they need to have a leader that engages prospects. One South American vendor appointed a U.S. team leader who had experience in the American business culture and sales strategies. He had a background in telecommunication and a strong network in the industry. The U.S. team leader was able to negotiate a deal with one of the major carriers in the U.S. His technique was that he pitched Elephant Talk’s innovative capabilities, security and scalability. These are the core of the unique needs of the telecom industry.

Communication and Management Costs are Usually Underestimated

The communication and management end up costing the Vendor and Buyer much more than they had projected. Cost estimates between Vendor and Buyer are different from each other led to arguing about the project management and the cost of the final product. There is a joint venture had been established between a US company and a foreign vendor. The unexpected problems arose from both the language barrier and the different time zones. The project was budgeted with little or no bilingual staff, more was needed than what was budgeted. No one budgeted for the cost of using real-time language translation services or for the additional tools needed to collaborate when operating across different time zones. Because of these oversights the project has been delayed, the costs of the program had been astronomical.

The Challenge of Change Management

Poor change management is one of the biggest risks to project delivery because it erodes relationships so quickly between vendors and clients. For example, we had an engagement with a multinational corporation that wanted to implement a technology upgrade to their financial system in Asia. Halfway through the project, there was a change in the client’s executive leadership. The focus and special features of the upgraded shifted. Our original plan did not even account for how an overt shift in high-level leadership could change things, and this led to more delays and budget overruns. It was clear that a successful project management approach had to be flexible for leadership and strategic change and yet maintain project momentum.

Use Cutting-edge communication Tools To Be “Nearby”

The most recent applications of communication technology, such as Zoom, allow for face-to-face conferences and discussions, which can also be broadcast live to global teams. They can hear, speak and participate on the phone in the meeting. The intuitiveness of this, like seeing people in a conference at one’s home, helps overcome the separation of the buyers and providers for the majority of the year. This is also true for 3-D virtual reality, which can give a sense of the space in a store or office while streaming a video of a candidate displaying an architectural design for corporate headquarters, allowing the buyer to visualize the design. There are now real-time collaboration platforms from Slack, similar to email, that allow everyone on the nearshore team to communicate as seamlessly as if they were around the corner. It truly makes offshore sourcing the same as nearshore.

A recent example of involving the latest in communication technology to great success involved an American client who was engaged in separating its business and application processes from that of its parent company. A virtual offshore development environment was set up within the vendor’s offshore development center and regular project meetings were conducted using the likes of Zoom. More interestingly, the vendor, who specialized in Virtual Reality (VR), provided VR headsets to the client thus enabling them to witness a virtual tour of the offshore development center as well as participate in live streaming of conferences. The positive repercussions of the project were tremendous and immeasurable. The use of VR made the client “see” the project just as it would a nearshore project. The act of virtually being able to see a team member that one would work with was invaluable in that it reduced the distance between the two parties in more ways than one.

Experience with Latest Technology Attracts US Buyers

The US buyers are interested in the experience and the level of capabilities and talent that potential vendors have in high-end technologies like ChatGPT and blockchain. They may not have immediate use for these tools but they are looking at it from the perspective that they may want to use their existing services/ products and upgrade them quickly with the vendor’s support. This approach could save a lot of investment which they will have to make in huge hiring/training in-house HR for these tools. For example, a vendor who has talent pool expertise in blockchain technology was able to attract US buyers by showcasing the company its blockchain based transaction system for one of the European bank. The system helps in processing international transactions securely and in a very transparent manner. The system reduced the risk of fraud and also drastically brought down the cost of discrepancies/errors, thereby enhancing the overall process excellence. So, from the previous live implementation, this demonstrated that the vendor not only has quite matured technical competence, but also the capability to be always ahead with the most advanced technology trend.

The Value of Providers’ Innovations

The global providers, with their R&D programs, impress the US buyers with the depth of their expertise. Vendors investing in proprietary solutions versus pure services earn premium valuations. A European vendor, recognized for their robust R&D program, had developed an AI-based predictive analytics tool for the retail sector. This tool used machine learning algorithms to analyze sales data, customer behavior, and market trends, providing retailers with insights to optimize product placement, inventory levels, and marketing strategies. Their commitment to innovation and continuous investment in R&D was a key factor in securing a long-term contract with a major US technology firm looking for forward-thinking partners.

Onsite Visits Benefit Both Sides

Pre-contract and ongoing onsite visits were mutually beneficial for vendors and buyers alike. They accelerated trust, deepened understanding about what each could and would do, and furnished candid assessments that enabled course correction. One leading Indian outsourcer extends an annual invitation to select US clients to travel to India to see the delivery centers firsthand and meet the managers who take care of their stuff. Spokespeople from both sides have reported that these visits contribute to a sense of collaboration and transparency. If a buyer elects to make a site visit, that's an opportunity for the vendor to pursue his or her thoughts on doing things better, as well as to haughty Indian dance with a few cubicles. Face time creates bonding and alignment. 

Invest in High-Quality Customer Service

Investment in superior customer service provided a competitive advantage for international providers. Their customer service strategy distinguished themselves in many ways, namely, by the focus on near-shore to control overhead expenses. This greatly contributed to customer contentment and loyalty.

One particular vendor serving the retail software solutions market made a heavy investment in their customer service center. They populated the customer service center to the brim with industry veterans, and capable representatives that could respond to customer inquiries immediately, and were adept at many languages. Intuitively, they implemented the near-shore solution to control expenses while focusing on quality. Consequently, customer satisfaction and customer retention rates remained very high, because problems were taken care of quickly and the customer genuinely felt appreciated. 

Joined Venture or M&A To Gain Customers Faster

It is well known that organic entry and growth require much less capital, but it has a much lower success rate of winning US deals and acquiring US customers than inorganic ones – JV (Joint Ventures) or M&A (Mergers and Acquisitions). Inorganic expansion leapfrogs the hurdle of independently establishing US businesses. An international IT services vendor hoping to break into the US market quickly bought a local cyber security firm with a loyal following in the financial sector. This instantly gave the worldwide vendor access to the firm’s existing client bank including major banks and financial institutes. It also meant they had instantly gained an in-depth knowledge of the US market and had a US ready-made team including a well-regarded sales force. A strategic buy of this nature shaves off a lot of the time in trying to establish yourself in a new market.

Value of Trial Projects

Pilot programs became a way for U.S. buyers to test suppliers without big commitments. Buyers could assess the supplier’s capabilities, flexibility, and cultural fit before making larger commitments.

A supplier that concentrates on cloud services did a pilot project to install a small-scale cloud backup solution for a U.S. company. Performing the pilot let the client review the supplier’s technical abilities, customization, and cultural fit. The supplier completed the project, showing they have the scalability, flexibility, and specific capabilities the client needed. The pilot gave the client a basis for going on to the longer-term deals for full cloud infrastructure services. 

Implementation Risks from Team Changes

Team or team member change can often arise after a supplier has signed a contract and put a team on a contract. Sometimes, after signing the contract, customers surprise the supplier by trying to change the team. Buyers and suppliers need to seriously consider if the contract allows for change.

After the early stages of a high-profile software implementation project, the supplier changed the project manager and also several key technical team personnel to adhere to arrangements of the vendor’s change in staff assignments. Being that the new people in the team have not been party to the prior discussions and arrangements, the flow of communications on the project and levels of knowledge across the team has been interrupted. The client was very unhappy that the company knowledge and handling of the project were all disjointed and pointed out the need to maintain a steady and consistent team for a long period during the project.

Honesty and Integrity

Honesty and Integrity in business practices are non-negotiable and crucial for long-term success in the US market.

A vendor bidding for a data analytics project misrepresented its history in its compliance with international data protection regulations. The potential client found the negative fact of the vendor in their due-diligence research and immediately blacklisted them. This incident served as a stark reminder of the critical importance of honesty and transparency in all business dealings, especially when handling sensitive data and operating in regulated industries.

Perception of Low Pricing

In the U.S. market, a vendor that attempted to succeed based on price alone may find it difficult to compete. US customers may also be concerned about the quality or service a company could deliver when prices for web development or content management seem too low. For example, a US customer found a web development vendor offering significantly lower prices than any US-based vendors, they were definitely skeptical due to the price. It was not just the quality of service they seemed concerned with, but also the issues of web security and dependability of the web solution this web development firm could create, deploy and maintain. These perception issues further reinforced the critical need to have a pricing strategy that reflects the value of the goods and services provided and not just be the lowest price in the market and conversely may be what your customers believe to be the lowest 

Cultural Sensitivity in Globalized Teams

In cross-cultural projects, steer clear of delicate subjects such as race, nations, and politics. In other words, be sensitive. At one multinational supplier, members of a global team carped internally because a person made thoughtless remarks about a political situation in the home country of another team member. The potshot led to ill will within the committee and a brief slowdown in project work. The dustup underscored the need for cultural sensitivity training and unambiguous ground rules on steering clear of discussions that can be misunderstood or lead to conflict. 

Best Way to Renew Contracts

People from consulting firms or executives have many tips to share. To us, the best one is to deliver the current project with better quality, cost, and delivery time (QCD) than the signed agreement. Overdelivering the existing commitments is the best to pave the way for follow-on business. Exceed the scopes and SLAs and compliance, remaining in the budget are the best sales with zero extra cost.

Tech Innovate, a software development firm, has an order from a major retail client in the United States for a tailored inventory management application. Not only does Tech Innovate complete the project two weeks ahead of schedule, but it also includes high-level analytics functionality that was not part of the original request at no additional charge. The client has a system that is more efficient and consumer-friendly than they ever expected.

The retail customer was impressed by the value added and the focus on quality and timely delivery and decided to expand the contract. And they asked Tech Innovate to integrate the inventory management system with their online sales platform, a project that was being planned initially with another vendor. 

Handling Rejections Professionally

Resilience is a positive quality. However, an international company should know when to shift from setbacks to the next chance or the following possible clients. Emotional detachment keeps the door open to future business when deals die.

Global Solutions, an IT outsourcing company, wants to manage the data analytics needs of a U.S. healthcare firm. After an attractive pitch, Global Solutions loses the contract to a different supplier. Rather than get mad or stop communication, Global Solutions sends a gracious email, thanking the prospective client for giving it a chance and asking for feedback on where its pitch fell short. The feedback: More experience handling sensitive medical data and vertical would have clinched the business. So Global Solutions doubled down on its already strong healthcare focus.

After half a year, because they encountered difficulties with their selected provider, the healthcare company considered the professionalism of Global Solutions and asked them to talk about a new involvement in healthcare data management this time.

These case studies offer instructive views into the intricacies of the US markets for digital and offshoring. They reveal the importance of understanding buyer preferences, the role of local presence, the need for transparent and ethical business conduct, and the effect of cultural understanding. By learning these lessons, we hope global vendors can be positioned better to excel in these markets.

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From our book:

"Cracking the Winning Codes: 
How Global Vendors Win in the US Digital and Outsourcing Markets"

ebook:  ASIN: B0D2JK252X        paperback: ASIN: B0D2NZNX3V

 https://www.amazon.com/dp/B0D2JK252X