Six risks of the GSI “lowest cost per seat” talent delivery model

Global Systems Integrators, often referred to as GSIs, are giant technology consulting and implementation firms that offer a wide range of IT services. These large multinational companies have established footholds across diverse industries and geographies by tempting clients with the promise of one-stop shopping convenience. They lean on the notion that virtually any complex business need can be satisfied through their array of packaged solutions and far-reaching integration capabilities. However, for all their scale and polished marketing visibility, partnering with GSIs does carry its share of risks.

Organisations can get so caught up in the brand halo effect of big names in the systems integration space that the partnerships fast track without sufficient scrutiny into assumed cost savings, vendor objectivity or delivered quality. Anxiously signing multi-year deals with GSIs without asking deeper questions may risk exposure further down the line. Uncovering what potential pitfalls hide behind the veil of impressive logos and credentials upfront is key to ensuring reasonable expectations.

1. Quality may be compromised

The lowest-cost resources may lack key specialised skills and expertise needed for the role. This can lead to inferior outcomes. Focusing heavily on minimising talent cost per employee can have unintended consequences for the quality of work. When hiring or staffing decisions glorify cheapness above all else, it inevitably leads to tradeoffs in requisite experience, knowledge depth, and advanced capabilities.

2. Higher attrition rates

Workers with lower skill levels tend to change jobs more frequently. This constant churn can inhibit project continuity and working relationships. High attrition afflicts many Global Systems Integration firms relying heavily on offshore talent factories and contract workers to keep prices low. With the focus fixed squarely on cost, these GSIs struggle with unstable workforces and lack employee loyalty longer-term.

3. False economy

The money initially saved on cheaper talent is often later spent on ramp-up time, additional management oversight, fixing mistakes, or project delays and cost overruns. In an ecosystem where money is time and time is money, too often leaders are left working to compensate for poor talent delivered by GSIs.

4. Poor fit with organisational culture

When talent isn’t selected based on the true needs and requirements of the client, Importing a large number of contracted workers can dilute or negatively impact workplace culture and internal employee morale if not managed carefully. Too often, this talent may not be deeply vetted to gain a better understanding of communication skills, collaboration practices, and working styles. For firms that deliver based only on price per seat, clients don’t receive a true tailored experience that puts their needs first.

5. Lack of business understanding

The lowest-cost talent often operates at execution level without contextual understanding of company goals and strategy needed to ensure work aligns with broader objectives. The revolving door of talent exiting for better pay or job hopping between firms grinds productivity to a halt. Makeshift project teams constantly in flux cannot build rapport or working rhythms to drive effective collaboration. New hires mean steep learning curves and skill variances requiring heavy oversight to compensate. While the model fuels the GSI business model engine, clients feel the churn burn through blown budgets, missed deadlines, and compromised quality deliverables.

6. Innovation limitation

Leveraging largely standardised, templatised capabilities makes it tougher to generate creative, customised solutions tailored to the client's unique needs. The most resourceful, high-calibre experts won’t be the ones on your projects. This crucial missing factor affects innovation, productivity, and problem-solving. When the solutions delivered are nearly copy and pasted across a slew of clients, there’s very little tailored specifically to your business needs.