I can’t help feeling we are entering into a critical phase of business globalization, due to a convergence of factors. We have seen these global dynamics in play for the last 30 years, but we are now in an economy where today’s CEOs are aware they need the tools at their disposal to become truly integrated global enterprises.
I was privileged to have a preview of IBM’s new study of 1100 CEOs this week at its analyst event in New York, and, while the findings are under embargo until next Tuesday’s public release, I can say they reinforced one thing for me: the vast majority of today’s CEOs recognize the need for change, and are more prepared than ever to be bold and adopt measures that can drive rapid change through their organization. So why is now different from that of 5 years’ ago, or 25 years’ ago?
1) Many enterprises began rationalizing and optimizing their infrastructures in 2001 during the last downturn, and they need to look further outside of their organizations to find further business efficiencies.
2) The Internet and global communications revolution have created unprecedented access to global talent, where you can have your mainframe computers managed from Brazil, your general ledger consolidated in Hungary and your logistics analytics performed in India.
3) Enterprises are moving ever-closer to developing common standards to support processes that can enable them to operate and compete as global entities. When you have rapid access to your global financial, HR, supply chain, customer and product information, you are in a position where you can make quicker informed decisions to enter new markets, sunset dwindling product or service lines and mobilize your resources and partners accordingly to respond to your existing and future customers. ERP platforms are far more globally-integrated now than they were a decade ago, which provide a crucial backbone for supporting global business initiatives, and developing technology standards such as SOA are helping firms re-use and optimize a lot of what they already have.
4) Global services providers are going through a marked phase of healthy growth despite a flagging econom: look at the latest quarterlies from Accenture, EDS, Genpact, Infosys, IBM, TCS , Wipro, at al. This is enabling them to develop further their global delivery infrastructures to accommodate talent across Asia, Europe and Latin America. The majority of today’s CEOs realize they do not have all the talent they need internally to take full advantage of global resources, and they are increasingly turning to services firms for support, whether it’s large-scale outsourcing of business and IT functions, or augmented staff support to provide them with scarce skills.
5) The current economic downswing has upped the ante for global companies. Business leaders are becoming increasingly knowledgeable about what they need to do to rationalize costs further, develop common business standards and integrate their businesses on a more global basis. Their challenge is executing, and they are realizing the exigence to make braver decisions to achieve the change they need on a more rapid track, as opposed to making slow, painful, tentative steps.
Bottom-line, the current downturn is magnifying the scarcity of managerial talent with the experience to manage offshore resources, develop metrics and service levels, possess the process acumen that eliminates waste and drives ongoing quality, and the global business intelligence to move into new markets. Yes, some of these are age-old issues for improving business performance, but the reality is that today’s CEOs need support like never before, and many are increasingly willing to make more radical decisions to avoid seeing their business underperform or sink in a troubled economy. Today’s leading service providers are becoming critical players in providing the assistance CEOs need to become globally integrated businesses, however, as we have mentioned many times before, while services providers provide the tools and skills companies need, ultimately it’s how effectively enterprises engage their services partners to develop their own talent inhouse to acquire the experience and tools they need to make their enterprises successful.