Konica Minoltas Offshore Agreement Could be a Struggle

While on the surface, it seems like a good idea for Konica Minolta to have inked a partnership agreement with Indian outsourcer HCL Technologies to open an offshore development center in India, at least one printer analyst disagrees.

The agreement, which taps HCL to operate a software applications development center for Konica Minoltas printers and multifunction peripherals (MFPs), is designed to enable Konica Minolta to cut costs and ensure that core printer and MFP technologies will still implement enhanced technologies.

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However, these kinds of arrangements have proven to be problematic in the past, according to Rob Enderle, president and principal analyst the Enderle Group.

To read about how advisory firms are growing along with outsourcing, click here.

Enderle cited StreamServe, a U.S.-based enterprise document presentation software company that did some outsourcing in India, as an example of a company that ran into a bevy of problems after it entered into a similar agreement.

"It sounds like a great way to save cost but often language [barriers], cultural [differences] and distance problems make it almost impossible to get projects done well or on time," Enderle said.

The Konica Minolta-HCL agreement, he said, reflects the huge financial strain print vendors are enduring as data and documents move to the Web and devices like Apples iPhone, thereby reducing the need to print.

In addition, Hewlett-Packard continues to hold reign over much of the market share.

"People think [outsourcing] is easy but it really isnt," Enderle said. "The learning experience can be incredibly painful."

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