There's one character in the sourcing business those "in the know" know… Larry Janis. When senior management look to hire or poach key talent, Larry is known as the discreet man with the black book. He's also a great guy, and agreed to post a few suggestions on what sourcing executives should be doing to shape their careers in this environment. No-one in the business knows the hiring dynamics of buyers, consultants and service providers as well as Larry…
PF: Larry – you’ve been a lead search consultant in the sourcing industry for many years. In terms of roles and openings both buyers and service providers are looking for, what’s changed today?
LJ: The stress in the global economy has certainly changed in the outsourcing provider space. Add to this, HP/EDS merger/acquisition, the Satyam scandal and staff reductions at several of the major providers. As a result, both the
buyers and providers have scaled back many of the large hiring initiatives we have seen in the past and the process has become more selective and significantly longer. There is some common ground between both the buyers and providers, both sides are seeking individuals who can add value to the organization. On the operations/shared services/delivery the companies are seeking individuals who can improve processes, profitability and end user satisfaction. The sales disciplines are more focused on track record of success, industry focus and abilities to open doors in new accounts and new avenues. The need the abilities to connect the dots between technologies, customer needs and markets in new ways.
LJ: Mostly, I am still recruiting for what I've always looked for: extremely smart and talented people who love to work hard, who are passionate about what they do and achieve success.
PF: Who’s hiring at the moment – where are the openings?
LJ: The market at this point is mixed; there are still strategic hiring initiatives taking place on the buyer and provider sides of the marketplace. These are on both the sales and delivery sides.
LJ: An example of this was just today, I spoke with a senior executive at Accenture this morning and in our discussion he indicated he is constantly looking to improve the caliber of his team. He looks for people with the abilities to react to market shifts, be able to bundle large complex deals into successful sales.
PF: Are you seeing a pick-up in job vacancies for sourcing consultants from the boutiques or the management consultants?
LJ: Most if not all of the sourcing firms and management consulting have been hit by the economic down turn. The advisory firms like EquaTerra, TPI and Deloitte have all mad some forms of adjustments. Several of the players have changed out the underperformers. There has been hiring across the board, but very slowly and only in anticipation of concrete demand. By sector ITO is stronger than anything else but very respectable in F&A, HRO, and procurement.
PF: What sort of roles are in decline?
LJ: I believe there is less hiring being done today than a year ago. I am not sure I can make a statement to define specific roles that have been affected. There is one industry sector that has been hit harder than others it would be HRO. This part of the market seems to be very quiet, this would include the larger offerings like those at Hewitt and Accenture. RPO has also had its set backs.
PF: What advice do you have for sourcing professionals today looking for a new job, or new challenge? How should they go about finding new vacancies?
LJ: Being your own best selling tool, you must emphasize what's important about you, as an individual, and how your own talents, skills and capabilities can deliver short- and long-term value to an organization.
LJ: Start by being aware of internal job postings; while doing this insure your boss and you are communicating effectively and that his or her direction is important to you. While doing all of the above, insure your personal network is up to date! Participate in some of the social networking tools such as LinkedIn, Plaxo, etc. Write an article, participate in blogs like Phil’s and oh yeah….UPDATE your resume, look at opportunities that present themselves they could be viable. Talk to headhunters. Especially if you get a call from me.
PF: How effective are social networking tools, such as twitter and LinkedIn for sourcing jobs?
LJ: Social Networking attracts millions of visitors every month, it can provide opportunities for individual interaction and relationship building which is certainly an initial step in exploring options. When you use sites such as LinkedIn or Plaxo you should:
Update Your Profile- A complete, updated profile helps recruiters find you with opportunities.
Get Recommendations- Your profile represents you so make sure you put your best foot forward.
Add Connections- Your chances of getting any job or obtaining information on an opportunity you are exploring are both enhanced when you know someone at the company Some companies and job boards post job openings on Twitter, and job seekers regularly network through Twitter to help facilitate their job search. Users can search the whole Twitter universe by topics and keywords to find relevant posts and authors..
PF: And finally, how can Horses readers get in touch with you about opportunities?
LJ: You can reach me by phone 516-767-3030, email me here or just ask Phil
PF: Thanks Larry – am sure many of use here appreciate your time today.
Larry Janis (pictured) is Managing Partner for specialist sourcing executive search firm ISSG
So with all the talk about falling conference attendances, it's clear that people are still game for good events, but are simply being more selective about which ones they choose to attend this year. After the success of the recent Shared Services & Outsourcing Network show in Budapest, I had the good fortune to be at AMR Research's Supply Chain Conference in Scottsdale AZ this week, which attracted 650 senior-level supply chain, finance, operations and IT executives, many of whom wanted to talk about sourcing issues.
The one opportunity I did have to escape the analyst meeting room was to see former Disney CEO Micheal Eisner's keynote speech (pictured), where he talked about creativity under financial constraints being the key to success today.
In order to demonstrate this, he played us the now infamous "sword" scene from Raiders of the Lost Ark:
According to Michael Eisner, Harrison Ford was having a few stomach issues on that day of filming and kept rushing back to the hotel, and with the sun setting, the crew were concerned that they would have to wait until the following day to complete the scene. With production costs running at $100K a day (not chump-change in those days), Harrison just got out his gun and shot the guy… now that's innovation 😉
Always happy to hear any more examples of creativity that saved the day…
And finally… the last tranche of our three-part interview with Kraft’s Lee Coulter. Here’s Lee’s take on attributes service providers need to demonstrate, and some advice for budding sourcing executives today…
PF: Lee, when evaluating outsourcing service providers today, what attributes should companies look for? What should they try to avoid?
LC: That is a really big question and not one I am sure I can answer in less than ten pages. Every engagement is different, and the basic dimensions of suitability are: service scope, service quality, service cost, cultural match, the leadership teams, partnership capability, and risk. Assuming that you have providers capable of doing the job and meeting the objectives, then it is about the team and the commitment to true partnership (a topic for another day). These two things lead to a measure I use… confidence. So you would score the providers
based on their claims and statements and commitments to perform, then go back and add a factor based on your collective confidence that the all of the commitments would come to pass as committed.
The ‘what to avoid’ question is easier. I look to avoid what I call “irrational exuberance”. Those are $50 words that really just mean that a provider is not truthfully representing the realities of doing this often very difficult work and works to assure the client that it’s all going to work and they are good at all of it. No provider is good at all of it, and there will be issues. It is really important to me that this dialog be about how good the group is at dealing with surprises because they will arise.
PF: And finally – you have had a tremendously successful rise to prominence in the outsourcing industry over the last decade. What advice would you impart to ambitious operations executives today hoping to achieve success, especially in light of the economy? Do you see the role of the senior outsourcing executive on the buy-side set-up to win or fail in most of today’s multinationals?
LC: The advice I give others is to always have a strategy first. Shared services and BPO are not by themselves strategies. They are enablers of strategies that help drive value. It is important to recognize as well that value is an equation. It is not simply the best service or the lowest cost. Value is the ratio of the service expectation divided by the cost. In this world of services, the focus has to be on the ratio or the value in a service. Any shared service or BPO effort that is not driven within a greater functional or corporate strategy is going to have a tough time of it. SS and BPO involve a lot of change, and to appeal to the people, you must have a grander strategy that inspires people to be more ready for change.
Along with a strategy, create an environment that gives your company the genuine permission to demand that they be served by the highest value provider of services. Make it okay for all parts of the business to question the services, costs, quality, and comparability of all of the service providers that serve the company. When there is freedom to question what you have today and compare it against the world of other internal and external groups that do similar work, amazing things become possible. At GE I learned to take the best ideas (not patented or copyrighted of course!) proudly from anywhere and use them. There are great shared services, captives, assisted captives, and outsource service providers out there today doing fantastic work that can benefit your company. The key is creating a ready and receptive client at the same time you lead steady stream of improvements that take you up the value spectrum. Finally, the buy-side outsourcing executive has their own fate in their hands. Done well, shared services and outsourcing can reduce capital, improve cash flow, reduce cost, variable-ize traditionally fixed cost services, improve speed to market, and deliver transformation in non-core areas that can translate into a cumulative competitive advantage. Done poorly, organizations can be damaged by trying to do too much, too fast or by trying to skip essential steps where critical behaviors are learned.
PF: Lee – thanks so much for your time with us, I know many of our readers will enjoy hearing your views.
If you’ve ever ventured into the brave world of HR Outsourcing (and you need to be brave…) the chances are you’ll hear the views of Ceridian’sKeith Strodtman.
Keith has been a constant at the global $1.6 billion HR services and store-card solutions giant for many years now, and when he’s not coaching his twin girls’ fastpitch softball team (that’s “rounders” for any Brits on here), he’s been running Ceridian’s global HRO practice. He is also widely recognized as HRO’s smoothest man, with a constant smile, never a raised word, and never a hair out of place.
Keith has some excellent views on how companies can use third-party managed services to take on their administrative work and focus their HR executives on what they should be doing: helping develop their organizations’ talent. Over you Keith…
I’m not sure about you, but I don’t get why some analysts and bloggers advocate that companies have to choose between outsourcing HR/ payroll/ benefits administration and managing talent. It’s beyond me why those two things are mutually exclusive. For an organization that wants to manage costs and retain top talent – outsourcing administration allows it to focus on their people and the business at hand, rather than paper pushing. If I may be so bold, I think the combination presents an opportunity for HR to finally get that “seat at the table”.
Studies have shown that pre-HRO, companies spent 75 percent of their resources on transactions and operations and 25 percent on strategy and management. That means resources spent on administration and processing rather than attracting great people, skills development, and performance management.
When HRO comes into play, the numbers reverse to spending only 15 percent on transactions/operations and 85 percent on strategy and management. That’s more than three times the resource allocation on the most critical parts of your business. With those numbers – talent management is getting a huge boost from outsourcing.
So let’s look at the impact:
• Resources focused on key business areas.
• Employees more satisfied doing bottom-line impact work instead of administration.
• Retention improving as as result.
• And your HR department? Well, they can now focus on talent management and add value to the business.
Worried about the costs of doing both? Apply the cost savings from HRO administration to areas that will improve organizational performance. By implementing programs for personal and professional development, succession planning, recognition programs and even ancillary benefits, it furthers the appeal of your organization now and in the future.
Actually David Poole from Capgemini did an excellent job explaining the benefits of outsourcing in this column in March. I couldn’t agree more with his “truths” – especially that “outsourcing is a bold strategy for growth.” Incorporating HRO into an organization means you are poised for growth because this economy reality will not be the economic reality one, five or even 10 years from now.
So with all due respect to my friends in the talent management business, it’s never really been an either/or proposition between HRO and talent management. It’s just a matter of looking at the pieces and deciding where HR should spend its time to add the most value to the business.
Keith Strodtman (pictured) is Senior Vice President and General Manager of Ceridian’s HR Outsourcing business. With over fifteen years experience in the Business Process Outsourcing, HR services, product management, and finance, including involvement in the pioneering days of HR Outsourcing, Keith is well versed in the benefits of HRO. Prior to joining Ceridian, he was a Director in the Global BPO practice at PricewaterhouseCoopers (now part of IBM), responsible for the HR BPO service offering and for implementing large-scale HRO outsourcing engagements.
Ever since President Obamaproposed to change the IRS tax codethat regulates how US corporations declare income from international activities, I've been thinking about other measures governments can take to slow the recession and help businesses become less myopic with how they navigate these rough waters.
Reading between the lines, he appears to be targeting a revenue grab, while making political overtones against companies which use offshore resources. However, he's simply penalizing firms from being more productive with their exports. Sure, there are issues with tax fraud from havens such as Bermuda or the Caymens, but this is primarily an issue with individuals, not large enterprises.
Why penalize a US conglomerate for manufacturing diapers in Brazil for the
Brazilian market? It saves a fortune in both production and shipping costs. If that firm produced those same diapers from the US, it opens the door for competitors to take away their business. Without going deeper into this proposed legislation, the point I am trying to make here is that we live in unprecedented times where major banks are effectively nationalized and governments are printing money to stimulate broken economies.
Why not go a step further and intercede with firms' rampant layoff tactics? One of the reasons why our corporations are failing is this culture of knee-jerk reactions to adverse circumstances, without an eye on the long-term. Surely this recession provides an opportunity to change this mentality?
Meanwhile, the majority of US and British firms have developed an alarming mentality to cut staff as quickly and deeply as they can, as opposed to taking measures to get to the root cause of their uncompetitiveness, namely poorly integrated business processes and an inability to operate as a global enterprise. Laying off vast numbers or workers often impedes development in becoming more globally effective and more efficient at streamlining business workflows on a global ERP backbone. Why not give firms incentives for retaining the vast majority of their workforces? If firms are encouraged to look at other measures beyond laying off, they will be forced to dig deep into their internal operations to eliminate waste, drive out hidden costs and explore innovative methods for doing things more efficiently.
Simply eliminating workers is far more harmful to an economy than offshoring some labor: it harms the culture of that firm for being focused on developing long-term careers for its staff, and immediately adds to the unemployment ranks. By retaining staff and exploring outsourcing as an alternative, the firm is broadening the experience and value of its staff, in addition to globalizing the support operations. This data point from our recent study shows why firms are motivated to explore outsourcing in this environment:
For example, one company I have spent time with has recently rolled out a new procure-to-pay platform, which has helped it manage its expenditure far more effectively, and enabled it to standardize its processes at a global level. The firm now finds itself in a far better position to explore outsourcing these processes at a far more beneficial business case then prior to its internal transformation. Hence, firms should use this market as an opportunity to get their internal processes and global operations in order. Laying off staff is simply preventing them from being more competitive – I wish politicians were focusing their anger on eliminating jobs than "shipping a few overseas".
Folks – if you happen to be drifting around New York City on 3rd June, swing by the Philippine Cultural Center to hear some interesting discussions, including my friend and colleage Dr Stephen Stokes (pictured), author of the infamous piece "The Green Transformation of Indian Outsourcing: Heading for the Clouds, But Doing So on a Low-Cost and Carbon Budget".
The event entitled "Global Sourcing After the Meltdown: In Search of Sustainability" is being organized by my good friends Christine Bullen and Wanda Lopuch at the Global Sorcing Council. For more information click here. You can also contact Wanda directly here.
Talk tracks for the day are as follows:
Authentic Sustainability in the Supply Chain
Confronting Business and Financial Impact of Supply Chain Risks in Global Sourcing
Decoding the Green Leadership
Impact for the Obama Administration Policies on Global Sourcing
Social Responsibility in Sourcing – The State of CSR in Sourcing
Green Technology – Walking the Talk
Finding a New Balance: Can Global Sourcing Be Commercially Viable and Socially Sustainable?
IT as an Enabler of Sustainability in Global Enterprises
Trends in Global Sourcing in Post-recession Pharmaceutical Industry
When I got a call from the Shared Services & Outsourcing Network crew back last Fall (Autumn) to run a session at their European Shared Services Week in Budapest this month, my immediate response was "how the expletives are you going to convince operations executives under severe cost restrictions to show up at a 3-day boonie in Budapest in the midst of the worst recession since Harold got clipped by an arrow in Hastings in 1066?"
One of my favorite jokes (and I do have a rather strange sense of humor), is "How can you get two whales into a Mini"… and the punchline is "Along the M4 Motorway and across the Severn Bridge". If you don't understand this joke, click here. I am going to add to that one:
"How do you get 400 senior operations executives, 200 of whom lead shared services operations, to show up in Budapest in the middle of the worst recession in post-biblical times?"
Yes, they managed to defy gravity, common sense and many other undefiable factors
to achieve the unachievable. Namely, two dedicated ladies, Emma Beaumont and Sarah Clayton, personally convinced each and everyone of these people that they should beg borrow or steal to find a way to attend their conference. Some execs will even pay out of their own pockets if the networking opportunities are that valuable for them.
Normally, you just walk away and think "that was a good show", but this one deserves special recognition. This market is horrible for the events business in general. Sponsorship dollars and euros are at a premium and most firms have strict travel policies that only allow for essential travel. While some conferences have held up remarkably well, many of them have disappointed with their ability to attract senior executives.
So how did these folks pull it off? Obviously, a compelling program and speaker line-up is vital, but there are two other ingredients that these people have in spades:
1) Focus on the role of the senior practitioner. While many events will just focus on the buzz-line their sponsors plaster on their marketing collateral (i.e. "outsourcing", "BPO", "Transformation", "Cloud"), SSON focuses on all the aspects of the day-to-day role of their target practitioner; in this case shared services strategy, how outsourcing impacts shared services and their function, how technology impacts the role of the operations executive, how consultants can (or cannot) help, and which service providers are out there whom they should get to know. Plus, they even involve the occasional analyst to add his tuppence…
2) Focus on the network – with tenacity. End of the day, it's all about the network, the side-groups, the private discussions and the peer debate. It's also about peers having a good time networking with like professionals in other organizations. The key is to ensure these core groups all come along, and the rest will follow. Moreover, sponsors have savvied-up on which events are getting the customers along. Having the events organizers make their show impossible to miss is the secret ingredient.
End of the day, this recession is quickly fleshing out the survivors from the lower-value players. The quality associations which invest to survive this year will find less competition around next year, and will ultimately have more of the pie for themselves when budgets loosen up and confidence seeps back. The SSON seem to have found their M4.
During Part I of Lee's interview, he talked about the development of the global sourcing industry and how companies were now approaching sourcing strategy in today's economic climate. In more Blackberry-smashing style, Lee goes on to discuss his theory of "innovation" within outsourcing relationships, and delivers some tips on how operations leaders can improve the performance of their service providers (without resorting to baseball-bats, water-boarding or enforced transition workshops at Epcott).
PF: Lee, what is your theory of "innovation" within outsourcing relationships, and are we really seeing it in today’s engagements?
LC: I have a pretty simple theory of innovation. We aren’t seeing it today because most of the clients today didn’t buy it. Somehow we believed that
innovation would occur without investment (client and provider) despite the fact that when the services were internal, we had to be very mindful of reserving money to spend on innovation and chances are, we even had dedicated groups to make sure this work got done. In most (not all for sure) engagements, the price gets worked to the absolute minimum so the provider can win the deal. Often, there is one round of service innovation baked into the deal to get the prices to the point where there is a business case. This might last the first three years, but the term of most of these deals is 5 or 7 or 8-10 in some cases. I think in general, we do not contract and plan for investing in mid-contract and late contract innovation and we get frustrated that it is not there for free. I think I can safely say that most clients see one round of innovation that occurs somewhere in the 12-24 month timeframe. Past that, I don’t think there is the presence of mind to plan for another round at 36 or 42 months, and I don’t think we typically govern in a way that brings this topic back to the table in a meaningful way. Add to that the continual cost pressure on all sides; you’ve got a pretty harsh environment for innovation to live. I believe that if you want innovation, contract for it, be prepared to pay for it, and build it into your business case, and ensure your governance organization is ready to lead it.
PF: What steps should senior operations leaders take to improve the performance of their outsourcing providers?
LC: Great question. Simple answer. Make better performance pay out for everyone, not just the client. Ensure your contracts make this sort of thing possible (and fix them if they don’t), and then create programs that deliver what I call the Southwest Airlines success model. These programs should significantly transform the service experience, while dramatically reducing BOTH the cost to deliver and the price to consume. It might sound difficult, but if that is the starting position, then it is not that hard to create, and then everyone gets to put the productivity in their respective future operating plans. It just doesn’t work when there is only one winner.
These are shared services, and many people don’t know the origin of the term. It is a common misconception that the sharing part means that two or more clients share from one provider, but in fact, the sharing that is intended by the term shared services was intended to mean that accountability for delivery of mutually satisfying services is shared between client and provider. What is your theory of innovation within outsourcing relationships, and are we really seeing it in today’s engagements?
Lee Coulter is SVP for Kraft's shared services, where he is a key leader of the firm's corporate transformation program "Organize for Growth". He is responsible for Kraft's IT services, global finance and HR shared service centers, in addition to the firm's BPO activities.
In Part III of this interview, Lee Coulter will discuss how he goes about evaluating service providers, and also some advice for budding sourcing executives today.
306 posts, 1445 comments, 12,000 subscribers and 30,000 RSS-feeders later, "Horses" today makes it to 2 years' old.
There's never been much of a plan, just a platform for good discussion, sharing of ideas, and open debate on tough issues for the global sourcing industry – and all with a hint of cranky sarcasm. And we try to keep it unbiased…
Drop me a note if you have any suggestions on what you would like to see more/less of on here – your input is always welcome. And a special thank you to all of you who come here regularly and support this site (you know who you are).
Here are some favourite posts from the last 2 years:
As we discussed last week, it's clear that many companies will continue to move into outsourced business environments, despite the recession and political pressures to keep work onshore. While some firms find it hard to make radical decisions in a downturn, others are clearly seeing how critical it is to operate as a global business.
If there's one thing this recession taught us, it's how integrated global economies and markets are today, how businesses need to adapt to move in and out of diverse regional markets, and how they must make rapid decisions to invest or divest global service / product lines in order to prosper. Outsourcing doesn't provide all the immediate answers, but it does help create the vehicle for clients to become more nimble and capable at a global level. Check out our thoughts based on new survey data over at Think Global…
There's one character in the sourcing business those "in the know" know… Larry Janis. When senior management look to hire or poach key talent, Larry is known as the discreet man with the black book. He's also a great guy, and agreed to post a few suggestions on what sourcing executives should be doing to shape their careers in this environment. No-one in the business knows the hiring dynamics of buyers, consultants and service providers as well as Larry…
So with all the talk about falling conference attendances, it's clear that people are still game for good events, but are simply being more selective about which ones they choose to attend this year. After the success of the recent 
And finally… the last tranche of our three-part interview with Kraft’s Lee Coulter. Here’s Lee’s take on attributes service providers need to demonstrate, and some advice for budding sourcing executives today… 
