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U.S. Onshore in North Dakota…a History of State Innovation

Mar 8, 2018

Many people know North Dakota as the #2 oil producer in the United States. The Bakken - which takes up nearly a third of the state - is estimated to produce 4.3 billion barrels of oil according to The U.S. Geological Survey. The state leads the world in hydraulic fracking and horizontal drilling – technologies that make oil production economically feasible.

Other people know North Dakota because of Great Plains Software. Founded in 1993 by the state’s current governor Doug Burgum, and acquired by Microsoft in 2001, it’s now an integral component of Microsoft Dynamics. Today, Microsoft has over 1,100 people in Fargo, North Dakota – it’s the tech giant’s second largest campus outside of Washington state according to U.S. News and World Report.

Most commonly though, North Dakota is known for having one of the best state fiscal rankings in the country. It’s topped 24/7 Wall Street’s list of best-run states five years in a row – receiving recognition for its oil reserves, unemployment rate, and median home value.

This history and success is no coincidence. The state achieves these results because of its vision: take risks and invest in innovation.

“North Dakota is committed to policies that create an environment conducive to innovation and new enterprises that help our state attract and retain talent," Governor Doug Burgum told The Consumer Technology Association. "We’re thrilled to be recognized as a state that welcomes entrepreneurs to grow their businesses and create quality jobs for our skilled workforce.”

Next on the Horizon: U.S. Onshore

The New York Times reported in its July article *Hot Spot for Tech Outsourcing: The United States, U.S. Onshore - as an alternative to offshore outsourcing - is coming of age. Challenges within today’s IT industry are causing companies to shift their people needs back to the United States. And a fact many people might not know, is that the state of North Dakota has been investing in U.S. Onshore since 2004.

According to the article, U.S. businesses are realizing: (1) offshore isn’t the singular answer to America’s IT people shortage; (2) some of what went offshore needs to come back to the United States; and, (3) tomorrow’s IT demand needs U.S. resources. 

Where will these opportunities go? As The New York Times states, to areas with a lower cost structure and strong economic development rather than major metropolitan geographies. Communities in North Dakota fit the profile.

Valley City, a community west of Fargo, and its economic development leaders, attended a Florida outsourcing conference in 2003. Its take away was simple – technology no longer needs to be developed in Silicon Valley or the big cities. It can be outsourced to anywhere and everywhere. This community created a vision as a result - if the world is going to outsource technology development, Valley City, USA is the place to do it. Big and bold, just like the Bakken and Great Plains Software.

Public and Private Sector Collaboration

In 2004, Governor Hoeven, the Valley City community, Valley City State University, and Eagle Creek Software Services struck a deal. They collectively built the first U.S. Onshore technology center in the United States as an alternative to offshore.

“I had 20 years of experience with offshore and I knew its limitations,” said Ken Behrendt, the Co-Founder and President of Eagle Creek. “The offshore model was not going to work for all technologies - especially the newer customer-facing technologies - and the traveling consultant model was not financially sustainable.”

Behrendt added, “Our transformation to U.S. Onshore capitalized on a highly educated, exceptional workforce found in Valley City.”

Digital Transformation and U.S. Onshore Growth

Gartner released a position paper in 2015 stating U.S. Onshore should be an integral part of every company’s IT resource strategy. This gave U.S. companies and Eagle Creek an expanded vision. It was the beginning of a new perception about offshore and solidified U.S. Onshore’s role in IT.

“We’re building technology platforms for companies to handle the digital requirements of their customers with convenience in mind,” Behrendt said. “Eagle Creek has become recognized for its digital business expertise.”

When a large patient care facility was considering how to leverage digital technology to facilitate internal innovation and idea sharing, they turned to Eagle Creek’s U.S. Onshore services. Eagle Creek developed a collaborative digital program combining social media, mobility and analytics. Technology solutions like this allowed Eagle Creek to brand itself as an innovative leader in healthcare and digital transformation services.

The global digital transformation services market shows no signs of slowing down. According to a new study by Grand View Research, the market is expected to reach $798.44 billion by 2025. What’s propelling its growth? The need for innovative solutions capable of engaging customers. And according to Gartner’s position paper, “building a more robust onshore delivery capability is the missing component for most providers.” As a result, it’s no surprise that U.S. Onshore’s momentum is expected to surge.

Eagle Creek utilizes highly-educated, non-urban talent within the United States. A strategy that is 40% more cost-effective than the traveling consultant alternative. The now leading U.S. Onshore services provider currently employs 300 technology consultants and is expected to grow upwards to 400 this year alone.

"Each state needs to develop an innovation agenda if they want to be home to the next big technological revolution that will improve lives and create jobs," said Gary Shapiro, President & CEO of The Consumer Technology Association.

“Eagle Creek is part of the digital transformation era,” Behrendt said. “We’re pushing technology down to the individual level, such as an app on your phone. It’s remarkable what this team has done and can do. And it all began with North Dakota.”

* https://www.nytimes.com/2017/07/30/technology/hot-spot-for-tech-outsourc...

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