However you like to wile away those sultry summer hours, we can be pretty sure it’s not dreaming up merit badges for outsourcers. Maybe it’s time to introduce our notorious Deborah Kops to the local bridge club, or growing vegetables or something….”Lord, no!” I hear you cry. In that case, take it away DK…
Outsourcing Provider Merit Badges
Given the demographics of the industry, it’s probably as stretch to think that many of us know that this year marks the 100th anniversary of the founding of the Girl Scouts. As someone who was a Girl Scout until she was 18 (because co-ed canoe trips were relatively unsupervised—I was not good at knots), and still has her badge sash, I think it’s only appropriate that outsourcing providers have their very own merit badges, too.
Let’s cut the hype about training and certifications—the reality of the outsourcing industry is that you’re not truly a member of the club until you’ve earned sufficient stripes to join the pantheon of those who are battered, bruised, tested and tried—and inextricably dedicated to making outsourcing the model of choice for global—and not-so-global–enterprises everywhere for functions big and small; core or non-core; rules-based and complex; offshore, nearshore, and even onshore; automated or leveraging labor arbitrage, regardless of domain.
So, providers of the world, examine your experience to see if you’ve earned Deborah’s top 10 merit badges. And if you can suggest some that I’ve missed, I’ll ask my personal badge maker to get busy.
BID FODDER BADGE The award of the bid fodder badge signifies that the client that you’ve chased for nigh on a year was just using you to put leverage on his current provider to shape up, give some concessions and slash their FTE cost to an under market rate. Or said client had a provider all picked out and opened up the bid process merely to keep the procurement police at bay.
Then, when the inevitable happens, you suffer the agony of hearing all the internal “I told you sos” as you try to justify the fact that you’ve just spent precious time and resource, not to mention trotted out your company’s great and good to the final presentation. After you earn this badge, pick yourself out of the slough of despond, make a promise that you’ll listen to your intuition next time, and only pursue client opportunities without entrenched incumbents or that are not pre-sold.
SCOPE SHRINKAGE BADGE The RFP clearly set forth that the client was outsourcing end to-end in virtually every geography, encompassing all business lines. But by the time the down select numbers three, what was purported to be a cool 1000 heads transitioning over three years shrunk down to accounts payable in Scandinavia (with the promise of untold sourcing riches if it is deemed by the businesses…at their sole discretion… to be successful.)
Talk about throwing a spanner into the works. The infrastructure guys have factored the deal into their facility plans. Your investors finally believe your sales and marketing strategy is paying off. Your CEO has all but named the deal in the last earnings call. Your spouse has emotionally spent the commission. And you’re left with a little pilot with fees that don’t even cover the cost of the pursuit. Consider yourself as having entered the big leagues. Wear your badge with pride.
M&A SURVIVAL BADGE In an era of consolidation, surviving the marriage of two provider cultures and coming on top—or at least with your position intact—takes a rare set of skills: exuding just the right amount of enthusiasm for what may seem a nonsensical combination; (privately) mourning the loss of the culture you loved; and backing the right political horse, all the while subtly threatening to move on if you don’t get what you want without looking like you’re not a team player.
If your company is the conqueror, being nice to your new colleagues after trashing them in the marketplace when they were the worthy competition earns you credits. And if you are one of the vanquished, the speed with which you are able to pick up the new corporate speak helps you attain the prize.
If you gain responsibility and scope (not to mention a fatter paycheck) through the integration, give yourself 10 extra points. But if the deal is a temporary setback and puts you out on the street, remember that M&A in the outsourcing world is now a fact of life, and ensure you suss out the intentions of your next employer….and vest immediately if you are sold…as you proudly display your badge.
CLIENT MERGER BADGE After a year’s pursuit, and eons getting the operations to green on the dashboard, suddenly your client merges with or is acquired by another company, either with a full complement of provider relationships, or an entrenched cultural aversion to anything ending in –sourcing. And it appears that your client is not calling the shots.
No matter that you’ve saved enough dosh for the client to purchase the Queen Mary II, or that there’s so much satisfaction with your delivery that the relationship manager sings your praises at every SSON or IAOP event; your contract appears to be the outsourcing equivalent of a marked man.
So you enter the survival fray, looking for chinks in the other providers’ armor. You tout out the big guns to demonstrate your undying commitment to the relationship. You start preparing a “compelling value proposition” to proactively head off a client loss. And you put the screws on the delivery team, telling them that 99 percentile performance is now a given. But either the other provider is best golfing buddies with the surviving CEO, or there’s no way on God’s green earth that the company will export jobs offshore, even if it means 200% savings. Give yourself extra credit for a valiant effort, keep in touch with your client because he or she is sure to end up as a buyer elsewhere, and sew on your merged out of a deal badge.
NEW MAN-AT-THE-TOP-BADGE With the first generation of outsourcing leaders now counting their millions while they jet around to play on the world’s leading golf courses, their successors are a very different kettle of fish. The pioneers are now out of the business; the new breed of leader has very different pressures: avoiding being acquired; containing cost in the face of competition and currency fluctuations; satisfying increasingly demanding shareholders; and creating differentiation in a market where clients believe that most cats are black in the night.
Whether the new man has is a superb politician, having been groomed internally to take on a new job, or brought in from the outside without any direct experience in the business (the so-called “strategic” hire), change is inevitable. Those changes could range from the seemingly ridiculous such as forbidding business class travel on 15 hour flights—to the sublime, moving into new lines of business with nary a credential in the entire company. And if the new chief is an outsider, you can bet your booties that he’ll soon transport the culture (and henchmen) from his previous gig.
If you can keep your place in the new org chart, immediately award yourself the badge. It means that you either have 1), a godfather somewhere in the business; 2), good karma; or 3), pictures of someone important. However, if you see the handwriting on the wall soon after he moves into the corner office, and are able to land a better position without being obvious about your loss of power and prestige, you win, too.
MUSICAL CHAIRS BADGE You’ve done such a stellar job selling, solutioning or operating in the insurance domain that management thinks you can learn shipping overnight. Or perhaps you’ve done a great job in India, but someone in power thinks it’s time for you to deliver the same results wearing a Boston Red Sox cap.
Your boss, working on the premise that smart people in the outsourcing industry can do anything, calls your bluff and asks you to open up the Kazakhstani market. He preys on your fealty, reminding you that he accommodated your request to transfer for personal reasons several years ago, and dangles a few hundred shares in front of you while he not-so-subtly tells you that you will be the spoiler in his game of musical chairs. Get the badge either for being a good sport, performing with grace in the new role, or being able to keep your old job despite the fact that you played havoc with the new organizational schema.
10 MONTHS AWAY-FROM-HOME-BADGE Nothing screams outsourcing bona fides like spending the best part of the year solutioning or transitioning in any country where a visa is required. No matter where you are stationed, chances are your company will land a deal big enough to demand the personal sacrifice of spending untold months in a hotel room, serviced apartment or guest house where 1), you cannot swing a cat without hitting the walls; 2), the color beige drives you to drink; 3), there are no English channels on the telly; or 4), mosquitoes have taken up occupancy. And although the company is allegedly family friendly, you’re only permitted one week off every 2 months.
Give yourself points for missing your wedding anniversary or your child’s first day of school, while still being on good terms with your spouse. Add an extra credit if you get a local colleague to help you track down a peace offering in the form of a good deal on an I-Pad for your teen or diamond earrings for your wife. Tick the days off in your diary while you recite the mantra “never again.” And fasten the badge in a very prominent place, sending the message that you already gave at the office.
ECONOMIZE FOR THE GOOD OF THE COMPANY BADGE As outsourcing margins decline, your management starts to scrutinize every cost. Getting permission to travel or use your cell phone overseas requires something akin to divine intervention. Business class travel (except for a select few) and staying at run-of-the-mill Marriotts are now seen as unjustifiable and unaffordable luxuries. No matter that you’re expected to roll off 15 hour flights with barely sufficient time to wash up in an airport lounge before making that make-or-break client presentation, or the guest house’s air conditioning hasn’t worked for two years—it’s considered inappropriate to waste the company’s money on frivolous expenditures.
In the name of economy, open reqs to fill authorized client service positions, even when paid for by the client, must go to the top of the house before HR will start the search. Attending an industry event means completing a 20 page business case. Making do with a laptop that still runs Windows 2003 is good for the soul.
If you can hold your tongue while the boss spends lots of dosh branding a sports event, or after you find out the ice sculptures at the client event cost $2500 each, you’ve earned your badge. Better yet, if you can get a $125 per night deal in a New York hotel without bedbugs, you’re an economizer extraordinaire.
FUN TIMES WITH PROCUREMENT BADGE 100 page RFIs sent to 14 providers in order to be “compliant.” Best and final bids required without any discussion of actual scope. Questions about your company that are so invasive they ought to be covered by the Official Secrets Act. e-Auctions that make a mockery out of any solutioning process. These stories…and more…render outsourcing truths much stranger than fiction. Whether the procurement department is actually driving the deal, or is carefully monitoring the sourcing leader’s every move, understanding that their modus operandi sometimes can be summed up as the three Cs—control, cutting cost, and compliance—will help you get through selection and contract.
Give yourself credit if you find a way to skirt around the procurement rules without being obvious. Pat yourself on the back if your partner in crime is the sourcing leader. Pump the air if you are still on speaking terms with the procurement manager when the contract is signed (after all, he’ll be monitoring contract compliance going forward). And praise the client’s procurement department to the skies when you write up the case study.
INABILITY TO PLEASE THE CLIENT BADGE The transition is spot on target, or the operating stats meet all SLAs. There’s barely a stray yellow on a very green dashboard. The delivery team’s attrition is within normal bounds. Yet no matter what you do, short of getting on your hands and knees outside the client’s office (or giving him your firstborn), nothing is right. Or ever will be. Either the client team is playing a very elaborate and expensive game of gotcha, or they hold a residual grudge that the good old days of internal command and control are long gone.
Your account leader dreads every Monday morning’s email abuse, and threatens to quit every Tuesday. Supervisors shudder when the client makes his floor rounds during the quarterly business review. Staff refuses assignment to the client, believing that is the equivalent of the career kiss of death.
If you survive a QBR without losing flesh, it’s five points towards your badge. If your boss is entirely sympathetic and does not blame you, award yourself another five. If the client gives your firm a glowing reference, understand that the sun, moon and stars are aligned for the first time in 20 years, and don’t tempt fate by asking again. If the client renews and expands scope, praise whichever deity you believe in. (And move ever so deftly to get reassigned to another account.)
How many of these badges have you earned? Perhaps it’s time to set up a scout troop replete with a Provider Pledge (paraphrasing the Girl Scout pledge). So hand over heart and repeat after me, “On my honor, I will try, to do my duty to attract and scale good clients, to deliver value better, faster and cheaper, with transparency and good governance for all.”
Stay tuned for the Client’s Outsourcing Merit Badges. You deserve them as well.
Deborah Kops is Research Fellow, HfS Research (click here for bio)
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