ImageTradition and common practice don’t always get revisited often enough.  The purchase of services, especially outside of our home nation, introduces risks.  Most of the time we evaluate suppliers based on their abilities and at the same time may give some consideration to risks involving the nation (IPR, Legal System, Corruption Index, Social Strife/Stability and Environmental).  Consistent and comprehensive pragmatic evaluation is important to elevating our understanding of risk, deciphering the impact and taking proper precautions to reduce the impact that the risk might present.

2013 we live in a world of turmoil, social flareups that can occur at a moments notice and the never ending conflict between nations whether on the basis of territorial boundaries or religious beliefs.  What can keep committed conflict from rising up is military strength.  The Military Factory Network produces a list of 68 countries and their military strength http://www.globalfirepower.com/countries-listing.asp).   This list can be extremely useful in understanding where your sourcing destination ranks, what nations are above you (and which are your neighbors) and what kinds of relationship status do you have with them.  When we place this information in the context of present day events we can see quickly put your serviced operation or captive at risk.  Its important that outside of Europe and the U.S. which enjoy relative social stability and good relationships with their neighbor the rest of the world is bit less stable.  The risk is real, it is evident in spats between regional nations (diplomatically and in small episodes) and the level of engagement is predicated on general sentiment.

By Example

Let’s take a look at some of the nation rankings of military strength within the Asia Region.Image

The table brings up some interesting considerations.  Take for example Singapore which is the lowest amongst all ASEAN countries and yet there is significant capital investment in Singapore (captive operations).  The Philippines has conflicts over the Spratly Island and  Scarborough Shoal with China, Sulu fighting in Southern Malaysia and the most recent shooting of a Taiwanese fishermen over territorial water dispute and

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yet they are a dominant BPO player with a ranking of 31 (with only Malaysia and Singapore with lower military strength).  It raises the question of potential conflict between neighboring nations, who possibly often have a history of disputes and whether the potential increases as commerce becomes the prize?  Especially in Asia honor and face is very important, and uprising occur because of it.

What’s At Stake?

As a consumer you are caught in the crosshairs.  There are reasons when you don’t need to be too concerned.  When the,

  • service is non-critical,
  • relationship engagement is short term or a single event, or
  • service is easily shifted to alternate suppliers with a minimum of effort.

Aside from these three (3) situations your relationship has risk consequences as it pertains to military strength, regional stability and the harmony of the nation with its neighbors.  I bring these matters up as a matter of awareness and not to create hysteria.  But as we have seen in the last 5 years harmony can easily be shattered with a single act which then ignites a full on conflict.  The opinions of the Global community greatly influence the suppression of conflict, but it goes without saying that Western diplomacy has become less and less effective due in large part to regional awareness.

The more deeply vested you are in a country or a region the more that is risk to loss or significant disruption.  Chains of communication, commerce and utilities are always the first order of attack.  It bring paralysis to fighting forces, to civilian populations and also to your front line work that you have placed in these nations.  There is also the potential for the loss of information that is harbored in these locations, a disruption to service to you and your customers, and possible could pose a breach in security over sensitive information.  In short… even the most casual relationship can be in harms way and you didn’t even realize it because all was good in the social climate and we failed to recognized the importance of military strength.

ImageMissing something is understandable but dismissing possible risk, and everything is possible today, will result in sever3 impact to your business.

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