Welcome to Part 2 of the Schulman-saga (see Part 1) where the Don talks to us about whether shared services are really dying, the changing role of advisors, and where he sees the BPO industry moving in the future… and what he means by “verticalizing the horizontal”. Isn’t that trying to stand up while you’re lying down? So without further ado, let’s have The Don himself elaborate further…
Phil Fersht: Don, you said to me a year ago that shared services is certainly not dead. Can you elaborate on that?
Don Schulman: Yes, I think you and I agree on this. As you know, back in the mid ‘90s I was one of the leaders in the world of shared services and drove that industry. And I was kind of sad when outsourcing was first created because I thought, “Oh my gosh, this is ending.” But I quickly concluded when I took over this business that, in fact, it’s not ending at all. I believe our clients need to maintain the governance, the management system of classic shared services within their organization. As outsourcers, we become an extension of that. It’s almost like a buy/lease option to the client. Do I own it, or do I lease it? And why would I do one versus the other? Working with an outsourcer gives clients the advantages that come from greater scale and investments in technology that are beyond their own limited capabilities. But it’s much more than that. For companies that actually want innovation, what’s the change that needs to happen, where’s the next big place we’re going to go, what’s the next big technology change, what’s the next big investment I need to make as a company to drive processes? They need to have a transformation partner at their side that is actually on the ground doing the work. That’s how this partnership works.
Phil: How do you view the changing role of advisors and consultants in this space? Do you think that they’re helping drive more sensible deals, or do you think a lot of them are still trying to do things the same way as three or four years ago?
Don: There is definitely aneed for intermediaries in this space, but with the transformation agenda clients have for their providers, the advisor’s role is changing quite dramatically. They still need to issue the RFP and size and rationalize the data to decide which provider is the best fit, but advisors today need to do much more in educating clients on how much work is involved, what this transformation agenda needs to be, and how to select the right partner. And the more consultative the third-party advisors become, both fact-driven and advice-driven, the better off they’ll be in the marketplace. I do see a significant role for them. And I think the fact that there’s this convergence going on in the last few years between the providers’ consulting side, the third-party advisors and working with guys like you that reflects this very well.
Phil: In terms of where the demand is changing, what do you think will be the newer areas of process sourcing we’ll be talking about in a couple of years? Is it looking at untouched complex areas such as marketing processes, is it just continuing to look at F&A and Procurement, or will we get more into verticals? Where do you see this heading?
Donniel "Don" Schulman is GM for F&A and Supply Chain Global Process Services at IBM
Don: I believe verticalizing the horizontal will be the next thing. For example, the mortgage processing industry has a significant influx of issues. But its very distinctive processes rely on the core processes of account reconciliation, collections and customer care, and so we bind them together with unique requirements to serve that market. We believe this verticalization of the horizontals is quickly accelerating and is the key to the future. And we are aggressively pursuing it.
Phil: Do you think we’ll see an increased number of providers coming into these verticals, or do you think we’ll see a roll-up where the big providers slowly absorb niche players?
Don: I think we’re talking about two big pillars here. One is the verticalization of the business and the fact that you need to have a consultative partnership/transformational model to be able to deliver to your clients. And the combination of both will actually stretch the industry quite significantly. I believe that a lot of the low cost bit players will struggle as the industry matures, and that there will be a rationalization and an industry shake-out to a few big players that can really provide both the technology requirements to do the verticalization of the horizontals and the partnering/consultative/transformation to pull it together.
Phil: And finally, Don, If you look back on your own career, would you do anything differently?
Don: As I said, I am very fortunate to have participated in the creation and early stages of two industries, and I’m passionate about what I do. I’ve had the opportunity to learn what partnerships are about and what being an entrepreneur is about. And I think that the resources I’ve been able to leverage as all of this has come together are completely unique and have provided me with a phenomenal opportunity.
Phil: So I guess that’s a no then! Thanks so much for taking a little time to talk with our readers, Don.
Donniel “Don” Schulman (pictured above) is General Manager, Global Finance & Administration and Supply Chain Management for IBM’s Global Process Services (GPS). He is responsible for sales, solutions, delivery and profitability of IBM’s F&A, Procurement and Supply Chain Management GPS worldwide.
Nostalgic about that old “Green Issue”, when people actually cared about the impending environmental apocalypse, before the banks crashed and attention dramatically turned to protecting our corporate income? Remember when we proceeded to bail ourselves out, and then stashed the debt with our next generation to figure out how to repay it?
Well, the same is happening to our environment, if our businesses continue to fail to take measures to rollout effective sustainability strategies. While finding a way to repay the Chinese is one thing, repaying our environment, our wildlife and our atmosphere is not nearly as reversible.
To this end, we’re seeing hard evidence that today’s most successful business are also the better sustainability performers. So what can we do to encourage business leaders to be sustainably-smart as they redefine their global operations strategies? It’s high-time for organizations to get smart about their sustainability performance and their overall carbon footprint – and some are already enjoying significant tax-breaks for complying with targets set by environment directives – however most, sadly, are not.
Meanwhile, some of today’s top outsourcing providers are also sensing the opportunity to help their clients meet carbon targets. Sustainability is quickly becoming one of those areas where organizations can benefit much more from a third-party with all the knowledge and compliance practices they need to improve sustainability performance. As with anything that involves regulations and compliance measures – what is the advantage of doing this yourself when someone else can help you do it faster, smarter and can ultimately save you more money?
Jyoti Banerjee is HfS Research Fellow covering sustainability and corporate responsibility strategies (click for bio)
We recognize the urgent need for businesses to source a sustainability plan, and are delighted to announce that Jyoti Banerjee has joined us as a Research Fellow to help educate our industry on the sustainability and corporate social responsibility (CSR) issues impacting us today. I have personally known Jyoti for sixteen years, since was my boss at a UK-based accounting IT consultancy called Tate Bramald Consultancy. My role was to help run their research practice, where we supported the British government with understanding the (then) impending Y2K crisis among other scintillating projects that scared the world into upgrading their creaking finance systems.
Since those heady days, when he has not been busy with his cricket and being a Dad, Jyoti has founded some of Europe’s leading ERP magazines and consulted for a host of leading software providers, in addition to leading a number of IT initiatives for the European Commission. More recently, he has been busy working on a number of projects in the sustainability space, including the specification and creation of one of the world’s first CSR reporting products, and the ground-up conception and specification of a sustainability management software application. Today, he is partner for Fronesys, a just-launched new sustainability advisory boutique, where he will be imparting his wisdom with HfS on sustainability and corporate social responsibility topics as they relate to global sourcing. Over to you Jyoti for a few words…
Six Reasons Why Sustainability Matters To Today’s Businesses
Thanks Phil and HfS Research for agreeing to help us showcase these critical sustainability issues to industry. HfS has developed a tremendous platform for the global services industry, and I am proud to be part of the extended research team.
All-in-all, there’s too much floss around when it comes to sustainability. I want companies to understand their environmental, social and governance impact, and tie that impact to the techniques and metrics they are accustomed to using when making business decisions. It’s all about sustainability, built on hard data, and material to the business performance of the organisation.
If a CEO’s pronouncements were all the evidence we needed that a business was doing something, then sustainability would be top of the strategy charts. In practice, for most companies, word and deed diverge. So how can companies get their deeds to match their words? And really, why should they bother? In our first HfS RAPIDInsight, we lay out six compelling reasons why companies have to get their sustainability actions to speak at least as loudly as their words.
And for all those who don’t care about sustainability at all, just remember this: the best sustainability performers make more money than the worst performers. So it makes terrific financial sense to be wise about business.
Don’t believe me? Check out all six reasons in full, and download your complimentary HfS RAPIDInsight:
Top outsourcing correspondent, Stephanie Overby, last week ran a lively discussion over at CIO.com with a couple of Harvard academics, Professors David Pisano and Willy Shih, on that fine vintage topic “How Offshoring Can Kill Innovation”. However, unlike that case of ’86 Margaux in your cellar, we rather fear this argument is beginning to take on a tinge of vinegar. Time to change that ol’ record? Let’s ask HfS COO, Esteban Herrera…
Esteban Herrera (click for bio) may not have got into Harvard, but he sure knows more about outsourcing than them
Esteban Herrera’s take on whether offshore outsourcing is really killing innovation
The provocative interview of two Harvard Business School intellectuals in CIO Magazine is making the rounds and generating some interesting discussion. It will undoubtedly stoke the already heated fires of the sensationalist anti-outsourcing crowd and provide fodder to those who say that offshore outsourcing detracts from the “client” companies’ and countries’ competitiveness.
The problem is that the argument being made, that outsourcing higher-end, higher value business processes will lead to erosion of the ability to innovate is at once obvious and flawed. Professors Pisano and Shih promote the concept of the “industrial commons”, the ecosystem of companies that collaborate and compete in any given industry, I failed to get into Harvard, but I can tell you beyond shadow of doubt that if you outsource, say, R&D, over time your company will cease to be good at R&D. The professors themselves say they are not anti-outsourcing, just cautioning companies not to outsource the wrong things. Well, we wholeheartedly agree, and we also agree on something very simple, which the interview does not make clear: what you can and cannot outsource successfully depends entirely on your strategy! If you want to compete on manufacturing prowess, then you probably should not outsource manufacturing. If you really believe the way you pay your bills is key to that sky-high valuation, then you better stay away from F&A BPO. We at HfS would never advise any of our clients to outsource anything that is fundamentally and uniquely tied to their strategic success.
But the argument falls down pretty quickly, and Dr. Pisano himself provides the evidence: He remarks that because US PC manufacturers outsourced both design and manufacturing, they were left vulnerable to the Apple iPad—no tablet has been as commercially successful as the iPad. True. The problem, of course, is that Apple also outsources BOTH design and manufacturing, making it no different than its would-be competitors. That is because Apple’s strategy is not to win with superior devices (often their products are over-priced and under-featured), but to provide the platform, and thus be the infamous toll-taker, in which consumers can lead their digitally connected lives. Apple writes very little software for its devices. Apple does not write or record the music on iTunes. Apple does not provide the network for its iPhones. What apple does very well is provide me (and you) with the platform in which I can acquire and store my music, organize my personal and business lifestyle, play Words with Friends, write this blog post, watch movies and shows, etc. The remaining competitors fail not because their devices are inferior, but because they see themselves as device companies, not as content delivery companies. It has nothing to do with outsourcing and everything to do with sticking to a successful strategy—one which, in this case, fully embraces the outsourcing of some very high end activities.
P&G, one of the most innovative companies in the world (and one of the most admired for being well managed), deliberately outsources innovation. P&G understands that individuals and other companies will have infinitely greater ability to develop new ideas than themselves, even if they are quite good at new ideas. There’s just much more capacity to innovate outside the walls than inside, and P&G gets that. By being open to external innovation, P&G delivers on more innovations than any of its competitors, in part because it has ceased to see itself as a CPG company, and started to develop a core competency on harnessing and capitalizing on a broad network of innovations. One can use the exact same argument Professors Pisano and Shih make to describe their success. P&G believes so deeply in the concept of industrial commons that it has chose to expand its ecosystem globally, leveraging lots of partners and individuals to bring more (not less) innovation to its products and markets.
In the end, what strikes me about this argument is that it seems to give too much weight to geopolitical boundaries that have been eroding with globalization for three decades. The “industrial commons” need not be limited, today, to one country or one group of companies. The network effect of having suppliers give you room to innovate effectively, or even innovate on your behalf, in combination with embracing a sound strategy, generates more value, more wealth, and more benefits for all parties involved. I am very concerned that the Professors are lending their weight to an argument that erects artificial and unnecessary walls, stifling true innovation and growth.
Fed up with all the puff and fluff? Comatosed by the motherhood and apple pie? Ready to get the real deal? Well, your pain will be over on August 4th, as we bring you the ultimate unfiltered schmaltz-free one-hour debate on the future of the outsourcing industry.
Join us for a special web-event where four senior provider and four senior buyer executives will lock horns to debate the burning issues of today’s outsourcing business.
The line-up:
The Buy-team:
Simon Newton, VP, Shared Services at Kimberly Clark
Lee Coulter, CEO of Shared Services at Ascension Health
Kevin Judice, CIO at PNM Resources
Jay Desai, SVP of Global Sourcing at Northern Trust
The Sell-team:
Tiger Tyagarajan, CEO at Genpact
Malcolm Frank, SVP, Strategy at Cognizant
Peter Allen, Global Head of Sales and Marketing at CSC
Anoop Sagoo, Global Head of F&A and Procurement BPO at Accenture
The Referee:
Phil Fersht, Founder & CEO, HfS Research
The discussion topics:
How is the role of the provider changing (or needs to change) to help clients find new value?
How is the role of the governance office changing (or needs to change) to move engagements beyond “operational”?
What are the core challenges facing buyers today – and how can they be met?
What are the core challenges facing providers today – and how can they be met?
What are the future technologies and innovations that are going to change the outsourcing game?
Now we know what Cloud Computing is (do we?), what next?
What does the future hold for ITO and BPO? What will it look like in 5 years?
What’s wrong with our business, and what do we – as buyers and providers – need to do to change it?
Donniel Schulman is GM for F&A and Supply Chain Global Process Services at IBM
One chap we’ve been trying to get on here for years is known simply as “The Don”… to anyone who knows him.
There aren’t too many people who shun the media spotlight to discuss the intricacies of the ideal end-to-end expense management process. Nor are there too many senior executives who will quantify exactly how many hours, minutes and seconds they shaved off the time it took to execute that process for a client – and demonstrate exactly how they did it.
However, as IBM’s Donniel Schulman’s reputation and influence in the BPO industry has grown in recent years, we’ve finally persuaded the chirpy New Yorker to share some of his story since IBM entered the BPO industry via its 2002 acquisition of PwC Consulting, which included a number of large-scale F&A contracts. Today, Don leads all the finance and accounting, procurement and supply chain managed services, combined under his leadership as an integrated unit.
Phil Fersht (HfS): Don, I’ve described you as one of IBM’s “best-kept secrets”. You’re not on every podium speaking, but instead you tend to be operating behind the scenes running a lot of the F&A and procurement work at IBM. Would you please tell our readers about your background, where you came from and how you got to where you are today?
Don Schulman (IBM): Thanks very much Phil. I’m humbled by your compliment. My career began in banking and financial services, serving primarily in operations roles. After that, I had a boutique consulting firm in the working capital management space, and eventually broke into PwC where I was fortunate enough to be able to lead its financial management businesses worldwide I came to IBM via its 2002 acquisition of PwC Consulting. I actually worked for a while on IBM’s own internal transformation, reporting to the Chairman’s office. And then six or so years ago, after the BPO business had been formally kicked off they asked me to come in and lead this F&A and procurement business. And now I’ve had the terrific opportunity twice in my career to help create a new consulting industry, first in the world of shared services and then in outsourcing.
Phil: So what is it like being one of 400,000?
Don: Interesting question. Let me alter it a bit to what’s it like working for IBM. I think there were two big changes for me in becoming an IBMer. On one hand, it’s like being a kid in a candy shop, having all this accessibility, all this unbelievable stuff- technology, client base, investments. On the other hand, IBM is one of the most disciplined corporations in the world, which is nice to have as a benchmark in my back pocket for my clients. With that discipline, quarterly reporting requires a framework and a frame of mind that in private partnerships and private equity companies you just don’t need to deal with, so it’s been an education process for me. I’m delighted that I’ve been able to work through it, and I actually have a lot of respect for the process. At the same time, my group is a “tip of the arrow” business model. It’s one of the fastest growing businesses in all of IBM, and we get a lot of investment support, both in terms of acquisitions and homegrown investments. We also have a lot of flexibility and freedom – much the same as you have in running your own business – because we’re not the typical IBM technology business. So it’s a nice balance.
Phil: So when you view the current state of the BPO industry today, what do you see the core differences compared to when you first became part of IBM?
Don: I think the most important difference is that BPO began with a focus on consolidation, offshoring, and labor arbitrage,, and the associated efficiencies. But now, the marketplace has really begun to appreciate that it’s really about business process, effectiveness, and intent. There were different fits and starts in this space. I think there are some companies that are here for the long run and really “get” the big idea. And I think there are other companies that hear the rhetoric but can’t get past the “I just want to offshore.” Analysts like you are helping to drive where the industry really needs to go, which is really about effectiveness and business outcomes, and not only about efficiency.
Phil: HfS Research has revealed new demand-side data (see earlier post) showing the market is rebounding quite aggressively coming out of the Recession – particularly with indirect procurement, F&A and strategic sourcing – . What’s your take? Is the market rebounding as quickly as we think it is, or do you think it’s more evaluation?
Don: My first observation is that we thought we were in a Recession-proof business and we were wrong. The business did decline, and we also see that it can come back. But we see it being significantly different than it was in the past. In the past, outsourcing was all about putting out big RFPs, picking up your business, responding to the RFPs, holding people a little bit at arm’s length to figure out who the lowest cost provider was. Now, relationships are changing dramatically. Companies are coming to us saying, “We’re looking for a transformation partner. We want you to partner with us, to consult with us, to help us drive our transformation agenda, and maybe even define our transformation agenda. We want you to provide the big innovation ideas that we need to drive ahead, and take the risk with us as we go down that path.” We see this as a dramatic shift. We see deals becoming much larger because they had been on downward journey, and they’re getting much more complex. They’re not about headcount. They’re about transformation and innovation.
Phil: IBM had been one of the first of the providers to bring together procurement, supply chain and F&A services into one integrated unit. What was the thinking behind that, and how are the areas blending?
Don: There were both strategic and tactical reasons for bringing them together. Strategically, we realized that a lot of the outcome-based kinds of deliverables we’re providing – whether it’s working capital or sourcing – are actually the same in both functions. Also, the operational proficiency in procurement and F&A are actually very similar. Therefore, the investments we make, the way we approach the business model, the way we approach the value propositions and even the way we deliver the operations all become very similar. However, the biggest thing by far was the concept of end-to-end source to pay, going what I call “inside-out” from sourcing a vendor all the way out to the payables, and from the payment all the way back in. And by combining procurement and F&A in what we call collaborative commerce, there’s a real opportunity to drive end-to-end. In fact, we’re forcing the end-to-end.
Phil: In the supply chain space, I was excited when IBM acquired Sterling Commerce, in addition to several other tech companies with specific supply chain competencies. How is that fitting into a broader sourcing context for you?
Don: With the acquisition of software like Sterling, there’s some overlap we’re trying to sort through, but we’re very excited about it. We believe it gives us a unique opportunity to take a piece of middleware like Sterling and modify, codify and configure it very uniquely to the supply chain market with the tactical kinds of activities that we do in our operations, and provide it to our clients on a need-be basis. And Sterling is just one example of many pieces of software that we’re doing this with.
Stay tuned for Part 2 (you can read here), where we discuss whether shared services is really dying, how Don views the changing role of advisors, and where he sees the BPO industry moving in the future…
Donniel “Don” Schulman (pictured above) is General Manager, Global Finance & Administration and Supply Chain Management for IBM’s Global Process Services (GPS). He is responsible for sales, solutions, delivery and profitability of IBM’s F&A, Procurement and Supply Chain Management GPS worldwide.
Our new study of 1350 outsourcing industry stakeholders, conducted with our friends at the Outsourcing Unit at the London School of Economics, continues to reveal home-truths about what’s really going on in the business. Quite alarmingly, we can also reveal that many providers are not entirely in synch with what their customers actually want from them.
We asked a cross-section of buyers with significant influence over outsourcing decisions, to reveal the critical attributes they seek in a provider. At the same time, we asked providers what attributes they believe their clients deem critical. And – guess what – their are significant gaps between what clients want and what providers think they want:
Providers are underestimating the importance buyers (34% compared to 49%) are placing on their ability to help address their change management and governance challenges. This indicates a significant communication problem is going on in industry – buyers are clearly realizing they need a ton of help and are actually looking to providers to deliver it. We believe some providers are simply unaware of the extent to which buyers are concerned about these issues, and are over-focused on being price-competitive, demonstrating operational delivery capability and risk mitigation.
Moreover, to prove further this communication gap between buyers and providers, 40% of buyers see the culture of a provider’s delivery organization as a critical attribute, compared to only 20% of providers. This begs the question whether many providers ever stop to examine seriously their delivery culture and how it gels with their clients. How can so many miss the importance their culture has on their clients’ decision-making? Again, the answer has to be a lack of good ol’ communication.
Analytical insight is also becoming increasingly important to buyers (27%), with many providers – again – underestimating the extent to which those decision-makers want to learn more about their capabilities. Are providers simply convinced their clients and prospects are only interested in the basic table-stakes of outsourcing?
The bottom-line: understanding and communicating service-culture is the critical component of successful outsourcing
HfS believes that the knowledge and intentions of providers’ clientele is quickly maturing, and they need to find smarter ways to communicate with them, understand what’s really important and invest in their services to respond to their needs. Currently, the outsourcing industry has a problem – providers either aren’t listening to their clients, or simply aren’t being given the environment to listen.
Let’s face facts here – outsourcing has historically been far too reliant on contractual terms, to the detriment of the softer elements that are needed to foster better provider/buyer relationships. And it still is. However, what’s transpiring is that buyers are increasingly looking for more from their provider to help them better manage their outsourcing engagements. They don’t want continually to spend millions each year on consulting support to improve their governance capabilities, their processes, their analytics, their innovation roadmaps etc.; they want this stuff embedded in the day-to-day service-culture of their partner.
HfS ultimately sees three root causes inhibiting this development:
Buyers need to try harder to get the message to providers about what’s really important to them;
Advisors, consultants and intermediaries need to help facilitate (not restrict) more communicative environments for buyers and providers (pre and post contract);
Providers need to spend more time demonstrating how their service-culture is the right fit with prospective buyers, and how they can help them with all the painful change and governance issues they are going to face over the long-haul.
The one thing that has always baffled me about the European Union, is how they try and unite a hodge-podge of countries which despise each other, when all they really want to do is carry on doing things their way and never take orders from anyone.
They clearly have three goals within the EU:
1. To make pots of money from that expensive Euro (what a great excuse to raise the price of a coffee from 50 cents to $10);
2. To have a powerless European governance system and keep things exactly as they have always been at the local level;
3. To beat the Americans at golf every two years (even though the Irish don’t need any continental help in that regard).
And when you look at the individual outsourcing intentions of continental Europeans versus the other regions, from our new study that we just conducted with the Outsourcing Unit at the London School of Economics, exactly the same philosophy seems to apply:
So what’s really driving outsourcing decision-making across the world?
United States: Let’s save some money, but also use this as an opportunity to globalize operations, transform processes and gain access to compliance standards and business process acumen that we – let’s face it – simply don’t have. Let’s take a realistic view of what we can get from the experience: use it as an opportunity to manage our ropy processes more effectively, but let’s not go overboard with the “forcing change” stuff, or having any fancy new technology thrown at us – as there’s never such a thing as a free lunch, folks.
Britain: Please can we shed the costs and change the bloody processes – but our existing bunch are going to be smart enough to figure it out – and we certainly don’t need to be told what to do – especially by our former colonies. We used to run the world, you know…
Continental Europe: Ah… mes amis! Let’s rip out ze costs, but for ‘eaven’s sake, don’t make any changes to our mother-ship. By all means, sack all the expensive foreign staff in the vorldvide offices and sheeft ze vork to India or Les Philippines, but – we repeat – don’t CHANGE anything!
Asia: You mean we can offload all our terrible back office stuff and have you lot run it for us cheaper and better? Take it now – ALL of it!
So there you have it: HfS sums up world politics and culture in a single chart and blog post.
Remember Cassandra? She was that character in Greek mythology who was granted the gift of incredible insight by the gods, but in the same instance, the gods cursed her so that no one would ever believe her. Welcome to the world of Deborah Kops, as she articulates the findings of our HfS Research / Sourcing Change study. Over to you, Debs…
Shortchanged!
Ever wonder why you have that sinking feeling that your outsourcing program isn’t quite delivering on its promise, despite the fact that your provider is hitting every SLA out of the ballpark? Why most benefits expected in the business case are within reach, yet the business lines’ grumbling continues unabated? Why the retained team just doesn’t “get it,” engaging in guerilla warfare when it’s time to start the next phase of transition? Why the leadership team rejects the concept before you even launch the PowerPoint presentation?
Deborah Kops is taken away before convincing the world of the perils of ignoring change management
Very likely, you’ve been shortchanged. Whenever an organization outsources, it triggers a myriad of changes—organization, process, workflow, technology, and service levels, among others. Change management often gets short shrift because it has to cope with often irrational reactions, may require a “touchy feely” response model, and ultimately forces sourcing sponsorship to confront an uncomfortable truth— compelling business cases alone will not persuade stakeholders to give up control or adjust the way they work. So praying that the noise will just abate over time becomes the default approach.
HfS Research and Sourcing Change have uncovered, for the first time, how buyers really attack outsourcing change management in the groundbreaking study, “Change Management—Not an Imperative for Sourcing Success?” Study results confirm that the secret sauce that makes outsourcing deliver—a structured approach to the adoption of changes resulting from implementation—is still being sidestepped. While most buyers– and providers– give lip service to the need for change management when sourcing, there’s still a lack of understanding of the skills and capabilities that make change management strategically important to an outsourcing deal.
Confusing PowerPoints, email newsletters and town halls with effective change management. DIY approaches to resourcing. Providers who think they support their clients’ change management initiatives. Read all about these observations—and more.
Click here to read the study “Misunderstood and poorly handled: change management for outsourcing”, and stop being shortchanged by outsourcing!
Earlier this year, HfS Research leveraged its vast network of global enterprises to solicit the opinions of buyers and providers of outsourcing attempting to understand how they view the role and importants of change management for outsourcing engagements. The web based survey was completed by 237 respondents with 96 buyers and 141 service providers.
Deborah Kops is Research Fellow for HfS Research and leads her own boutique firm www.sourcingchange.com dedicated to all issues sourcing change management (click for bio)
Wouldya believe it, the Swiss, in their typically punctilious fashion, now have an “Anti-PowerPoint Party” with the self-stated goal of having the number of boring PowerPoint presentations on the planet to decrease and the average presentation to become more exciting and more interesting.
The party aspires to become the fourth-largest political party in the country, as you don’t need to be Swiss to join a Swiss-based political party. Clever, eh?
So as I was busily enrolling myself in such a worthwhile cause, I quickly realized that if such a political goal was achieved, the whole outsourcing business would be in serious trouble. For example:
How else could sourcing advisors justify their millions of dollars of fees to develop a 250-strong slide deck, designed to pummel everyone into submission by slide 23?
How else would providers be able to pilfer each others’ decks and claim to be the first to have coined their branded transformation methodology?
How else could management consultants charge clients for change management workshops? Seriously, you think people want to change, as opposed to having hundreds of polished slides describing change processes that executives can discuss for hours?
How else can lawyers send everyone to sleep while that $750/hour clock ticks along?
How else can buyers convince everyone into submission that their procure-to-pay processes are just so un-outsourceable?
How else could analysts bombard everyone with reams of data telling you what you already knew, but at least make you feel better about paying for their services?
So please, please, please do not encourage our Swiss friends to destroy everything we have strived so hard to achieve. Long live PowerPoint and the incredible business benefits it provides!
We are in the midst of exciting times in the world of work. Never before has the world’s economy seen such dynamic changes occurring at a rapid pace. These changes are being driven by growth in emerging economies, new enabling technologies, talent gaps, mobile workforce, and perhaps even new motivations in the global workforce. HfS Research, in conjunction with Human Resource Executive Online, is conducting a study to help gain a better understanding of how the future of work is impacting organizations. You can help by participating in a short survey and providing your thoughts on how the future of work is impacting your business or your client’s businesses. The survey can be found here: Future of Work Survey.
In HfS Research Fellow Keith Strodtman’s blog on this topic, The Future of Work – Who Will Lead, we listed some of the future of work drivers that we see in business today. We also suggested that the most successful companies will be those which figure out how to capitalize on the future of work by unleashing the innovative talents of their employees and partners. This of course takes strong leadership. We’d argue that the command-and-control model of management will not be as effective at unleashing innovation as would a decentralized model that puts more information and control into the hands of the people closest to the customer. Doing so will increase an organization’s ability to quickly respond to customers and the market. I think we can all agree that speed to market has never been more important.
Back to leadership, who will lead this type of change in successful organizations? Who are the visionaries that can spot the changing dynamics of work? Who knows which of these dynamics are most important to their company? What role will HR play in all of this? Will they be a change leader? These are just some of the questions that we will try to answer with the results of the Future of Work Survey. It should be interesting to look at some of these questions broken down by respondent group, industry, and organizational size.
So please take a few minutes (it should only take about 7 or 8 minutes) to complete the survey. This is just the beginning of what we at HfS Research hopes will be a long series of insights into how companies can be successful in the Future of Work.
