{"id":1285,"date":"2013-02-18T20:26:00","date_gmt":"2013-02-18T20:26:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/outsourcing_employee_part2_021813\/"},"modified":"2013-02-18T20:26:00","modified_gmt":"2013-02-18T20:26:00","slug":"outsourcing_employee_part2_021813","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/","title":{"rendered":"If outsourcing were an employee, it would be fired\u2026 Part 2"},"content":{"rendered":"
\"\"<\/p>\n

It's never too late to find redemption…<\/p>\n<\/div>\n

So if you haven’t been fired yet, here’s how to avoid it happening…<\/strong><\/p>\n

Phil Fersht (HfS Research): \u00a0<\/strong>So, Lee, we talk about more of a fluid and evolving outsourcing relationship.\u00a0 How can we get there? Why is such a large proportion of this industry stuck in the weeds, with so many companies persisting in doing things in such a short-sighted way over the last decade. Why aren\u2019t we evolving these relationships?\u00a0 What is holding us back?<\/em><\/span><\/p>\n

Lee Coulter (Ascension Health): <\/strong>Phil,\u00a0I think there are two primary reasons:<\/p>\n

One is the most common misconception about outsourcing or shared services is that you can declare success<\/em>. Some executives like to say \u201cWe\u2019re done. We’re done outsourcing. We’re done doing shared services\u201d. No, no you can\u2019t! This notion that there is some finite initiative and there is some specific number of deliverables that you can check off on your old checklist and say \u201cOh I am done, yay\u201d… that is a very common misconception<\/em> by the leadership in many organizations.<\/p>\n

The second one is that the work to continue to evolve the relationship, is really hard work. You know for anybody who has actually been through a significant outsourcing negotiation, it\u2019s hard work<\/em>.\u00a0 You know, not just to get the MSA in place, statements of work, service level targets, KPI\u2019s, units of cost, demand management processes, these are all hard things to do. They really are pretty hard. And when we have taken the time to describe the nature of our relationship in a contract and it takes you know 6, 9, 12 months to do it and then another 12 months to work the kinks out of that. Nobody really looks at re-characterizing<\/em> that relationship as something that they really want to do.\u00a0 But, in order for the client to get the best of what a provider has to offer, that\u2019s what needs to happen. And to increase the value and contribution of those services for the business, that\u2019s what has to happen. Continually moving up the value scale to the point where the provider is not only<\/em> able to bring their expertise and technology to your relationship but has the incentive<\/em> to do so. You\u2019re in an FTE contract moving to a task based contract, it\u2019s is a minor step. It is a big and important, but minor step.<\/p>\n

However, moving into a process component, that is yet another step.\u00a0 Moving up the value chain from purchasing effort<\/em> to purchasing tasks<\/em> to result in purchasing processes<\/em> to finally purchasing the contribution<\/em> of that service to the business. This incents the provider to bring their own best thinking their own best technology to your services. But it requires that you completely start from scratch with the description of what it is you are buying and how it is you are paying for it, because you have to go through this process every couple of years of looking at what you are purchasing and the way you are purchasing it and say to yourself, \u201cIs this really incenting the right behaviour<\/em> from both parties?\u201d<\/p>\n

Phil: \u00a0<\/strong>Our data is showing that there is a good chunk of clients today, around a third, who probably have that attitude that outsourcing is done, it\u2019s finished \u2013 let\u2019s just keep chugging along with that contract.\u00a0 So, we kind of take the attitude of if that\u2019s the way they approach it, there is not much you can do. But it\u2019s the remaining 66% of clients who have varying degrees of caring about improving and innovating.\u00a0 Would you agree with that, and do you feel that those clients who are in the bottom 33% should be just left to do it their way, or do you need there should be some overall change in the way the industry approaches outsourcing, in general?<\/em><\/span><\/p>\n

Lee:\u00a0<\/strong>Well, interesting data – It would be interesting to see the segmentation in the 66% and see how they separate out, in terms of what their appetite is for going up the value chain. But for the 33% that kind of describe it as \u201cdone\u201d, it\u2019s going to be really hard for a service provider to bring a client from thinking their \u201cdone\u201d to convince them that there is more value to be added.<\/p>\n

It sounds unfortunate, but I don\u2019t know really what the service provider could do.\u00a0 Having been in outsourcing relationships for the last 15 years, I am sure that these providers are regularly presenting things that they could<\/em> do for the client and their are conversations about innovation and projects and stuff that they could do, and it would fall on deaf ears. But I would probably encourage providers to look at a way to segment their clients and their service delivery to kind of optimize differently for those clients, on \u201cthat\u2019s where they are and that\u2019s where they are going to be\u201d.\u00a0 You are going to be wasting your time trying to do anything else. For the 66% well, I will just leave my answer at that.\u00a0 I would be interested to hear more about how the 66% break down.<\/p>\n

Phil: \u00a0<\/strong>Of the 66% who still actually care about value beyond cost, it’s roughly an even split.\u00a0 You\u2019ve got half of them in the death throes of grappling with antiquated contracts that haven\u2019t been updated in quite some time.\u00a0 But they want to break out of that \u2013 they are showing some desire to do that.\u00a0 Then you\u2019ve got the upper echelon 33%, whom we have called the “strategic” camp, who are in more regular dialogue with their providers about defining business outcomes, about trying to align stakeholders more effectively and trying to approach things in a different way.\u00a0 So, we really look at three different camps across the industry – \u00a0you got \u201clights on\u201d camp on the left and this \u201cefficiency camp\u201d in the middle that could go either way, and on the right hand side we\u2019ve got this kind of \u201ccollaborative strategic camp\u201d who are trying to break out and change:<\/em><\/p>\n

Today’s outsourcing industry split into three camps<\/strong><\/span><\/p>\n

\"\"<\/a><\/p>\n

Lee: \u00a0<\/strong>How does this compare, or is that kind of a snapshot of current state?<\/p>\n

Phil: \u00a0<\/strong>It\u2019s the first time we have really broken it out this way. I think the way to look at this is to realize most enterprise BPO engagements have only really been around for ten years and I think companies are kind of feeling their way, since this the first real view of where companies attitudes and approaches are\u00a0emerging\u00a0in all of this.\u00a0 Whereas ITO is obviously a lot more mature and we are in a very operational phase in that industry. But also, with ITO, is that you still have 65% of IT staff doing ERP development work that are still based onshore. I think it\u2019s just still a market where it\u2019s a lot of the low-hanging-fruit administrative work that\u2019s still moving out there. I think ITO has really struggled to move up the value chain from the very early days. Is that something you would agree with, or do you think it is evolving?<\/em><\/span><\/p>\n

Lee: \u00a0<\/strong>Yes. I really would.\u00a0 The complexities of delivering increased value in technology today and I am going to say the permissiveness<\/em> or the size of the invitation<\/em> that the client has to provide to the provider is pretty big. Because every time you talk about evolving your technology portfolio, the number of stakeholders and the level of complexity it takes to do that work – it\u2019s really significant.<\/p>\n

If a client isn\u2019t really tuned into that and willing to clear the way for the provider to do that work, and not blame them when there are bumps in the road, it\u2019s really tough for a provider to move out of \u201crun and maintain\u201d, and I make the distinction between \u201crun and maintain\u201d and \u201cevolve and re-transform\u201d.\u00a0 So, the business of evolving and re-transforming – that\u2019s where there is change management, communication, training, engaging directly with the business there is all of these things most organizations are not really thrilled about offering to a provider.<\/p>\n

\"\"<\/a><\/p>\n

Lee Coulter, CEO Shared Services, Ascension Health (click for bio)<\/p>\n<\/div>\n

Phil: \u00a0<\/strong>Lee, I can\u2019t wait for our session at dreamSource<\/span><\/a>. \u00a0Thanks for your time today, this real is the \u201chard talk track\u201d so many of the sourcing industry needs to have, to get out of its own way.<\/em><\/span><\/p>\n

<\/em>Lee:<\/strong> \u00a0A pleasure, Phil, and looking forward to meeting a lot interesting folks there!<\/p>\n

Lee Coulter (pictured right) is\u00a0Senior Vice President and Chief Executive Officer,\u00a0Ascension Health Ministry Service Center, LLC. \u00a0As a distinguished practioner in the fields of outsourcing and shared services he has held several senior operations leadership roles at Kraft, AON and GE. \u00a0Lee also serves on the board if HfS Research. \u00a0You can view his full bio by clicking\u00a0<\/em>here<\/em><\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

It's never too late to find redemption… So if you haven’t been fired yet, here’s how to avoid it happening……<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,50,51,63,78,87,88,832,97],"tags":[303],"ppma_author":[19],"yoast_head":"\nIf outsourcing were an employee, it would be fired\u2026 Part 2 - Horses for Sources | No Boundaries<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"If outsourcing were an employee, it would be fired\u2026 Part 2 - Horses for Sources | No Boundaries\" \/>\n<meta property=\"og:description\" content=\"It's never too late to find redemption… So if you haven’t been fired yet, here’s how to avoid it happening…...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/\" \/>\n<meta property=\"og:site_name\" content=\"Horses for Sources | No Boundaries\" \/>\n<meta property=\"article:published_time\" content=\"2013-02-18T20:26:00+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2013\/02\/Coulter_Part2.png\" \/>\n<meta name=\"author\" content=\"Phil Fersht\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@pfersht\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Phil Fersht\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/\",\"url\":\"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/\",\"name\":\"If outsourcing were an employee, it would be fired\u2026 Part 2 - Horses for Sources | No Boundaries\",\"isPartOf\":{\"@id\":\"https:\/\/www.horsesforsources.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/#primaryimage\"},\"thumbnailUrl\":\"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2013\/02\/Coulter_Part2.png\",\"datePublished\":\"2013-02-18T20:26:00+00:00\",\"dateModified\":\"2013-02-18T20:26:00+00:00\",\"author\":{\"@id\":\"https:\/\/www.horsesforsources.com\/#\/schema\/person\/c4f084ff7ad43632f537b3b30918e69f\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/#primaryimage\",\"url\":\"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2013\/02\/Coulter_Part2.png\",\"contentUrl\":\"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2013\/02\/Coulter_Part2.png\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.horsesforsources.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"If outsourcing were an employee, it would be fired\u2026 Part 2\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.horsesforsources.com\/#website\",\"url\":\"https:\/\/www.horsesforsources.com\/\",\"name\":\"Horses for Sources | No Boundaries\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.horsesforsources.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.horsesforsources.com\/#\/schema\/person\/c4f084ff7ad43632f537b3b30918e69f\",\"name\":\"Phil Fersht\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.horsesforsources.com\/#\/schema\/person\/image\/86ee0c0ac2d033eed87f327162eb27f7\",\"url\":\"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2020\/11\/phill-150x150.png\",\"contentUrl\":\"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2020\/11\/phill-150x150.png\",\"caption\":\"Phil Fersht\"},\"description\":\"Phil Fersht is\u00a0a world-renowned analyst, writer and visionary in\u00a0emerging technologies, automation, digital business models, and the alignment of\u00a0enterprise operations to\u00a0drive customer impact and competitive advantage\",\"sameAs\":[\"http:\/\/hfsresearch.com\/team\/phil-fersht\",\"https:\/\/www.linkedin.com\/in\/pfersht\/\",\"https:\/\/x.com\/pfersht\"],\"url\":\"https:\/\/www.horsesforsources.com\/author\/phil-fherst\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"If outsourcing were an employee, it would be fired\u2026 Part 2 - Horses for Sources | No Boundaries","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/","og_locale":"en_US","og_type":"article","og_title":"If outsourcing were an employee, it would be fired\u2026 Part 2 - Horses for Sources | No Boundaries","og_description":"It's never too late to find redemption… So if you haven’t been fired yet, here’s how to avoid it happening…...","og_url":"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/","og_site_name":"Horses for Sources | No Boundaries","article_published_time":"2013-02-18T20:26:00+00:00","og_image":[{"url":"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2013\/02\/Coulter_Part2.png"}],"author":"Phil Fersht","twitter_card":"summary_large_image","twitter_creator":"@pfersht","twitter_misc":{"Written by":"Phil Fersht","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/","url":"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/","name":"If outsourcing were an employee, it would be fired\u2026 Part 2 - Horses for Sources | No Boundaries","isPartOf":{"@id":"https:\/\/www.horsesforsources.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/#primaryimage"},"image":{"@id":"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/#primaryimage"},"thumbnailUrl":"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2013\/02\/Coulter_Part2.png","datePublished":"2013-02-18T20:26:00+00:00","dateModified":"2013-02-18T20:26:00+00:00","author":{"@id":"https:\/\/www.horsesforsources.com\/#\/schema\/person\/c4f084ff7ad43632f537b3b30918e69f"},"breadcrumb":{"@id":"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/#primaryimage","url":"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2013\/02\/Coulter_Part2.png","contentUrl":"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2013\/02\/Coulter_Part2.png"},{"@type":"BreadcrumbList","@id":"https:\/\/www.horsesforsources.com\/outsourcing_employee_part2_021813\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.horsesforsources.com\/"},{"@type":"ListItem","position":2,"name":"If outsourcing were an employee, it would be fired\u2026 Part 2"}]},{"@type":"WebSite","@id":"https:\/\/www.horsesforsources.com\/#website","url":"https:\/\/www.horsesforsources.com\/","name":"Horses for Sources | No Boundaries","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.horsesforsources.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.horsesforsources.com\/#\/schema\/person\/c4f084ff7ad43632f537b3b30918e69f","name":"Phil Fersht","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.horsesforsources.com\/#\/schema\/person\/image\/86ee0c0ac2d033eed87f327162eb27f7","url":"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2020\/11\/phill-150x150.png","contentUrl":"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2020\/11\/phill-150x150.png","caption":"Phil Fersht"},"description":"Phil Fersht is\u00a0a world-renowned analyst, writer and visionary in\u00a0emerging technologies, automation, digital business models, and the alignment of\u00a0enterprise operations to\u00a0drive customer impact and competitive advantage","sameAs":["http:\/\/hfsresearch.com\/team\/phil-fersht","https:\/\/www.linkedin.com\/in\/pfersht\/","https:\/\/x.com\/pfersht"],"url":"https:\/\/www.horsesforsources.com\/author\/phil-fherst\/"}]}},"authors":[{"term_id":19,"user_id":3,"is_guest":0,"slug":"phil-fherst","display_name":"Phil Fersht","avatar_url":{"url":"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2024\/02\/Phil-Fersht-HFS-Updated.jpg","url2x":"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2024\/02\/Phil-Fersht-HFS-Updated.jpg"},"first_name":"Phil","last_name":"Fersht","user_url":"http:\/\/hfsresearch.com\/team\/phil-fersht","description":"Phil Fersht is\u00a0a world-renowned analyst, writer and visionary in\u00a0emerging technologies, automation, digital business models, and the alignment of\u00a0enterprise operations to\u00a0drive customer impact and competitive advantage"}],"_links":{"self":[{"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/posts\/1285"}],"collection":[{"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/comments?post=1285"}],"version-history":[{"count":0,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/posts\/1285\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/media?parent=1285"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/categories?post=1285"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/tags?post=1285"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/ppma_author?post=1285"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}