Sourcing
issues are the greatest challenges in today’s
business world. What the company truly spends on technology
and other operations, and the measures it takes to drive
new capability or reduce costs that are meaningful to
investors are key.
Do you
outsource or execute an internal change program? Do
you pursue traditional large-scale vendor contracts
or selective sourcing? These riddles are at the heart
of all sourcing decisions. They affect everyone from
senior management down to rank-and-file employees, as
well as the bottom line (and share price) of every corporation.
Accepting the Challenge
Such questions
are in the mind of CEO’s whose typical first act
is to convene some sort of evaluation committee whose
outcome (it is hoped) will be a specific game plan that
produces a harmonious sourcing transition. To outsource
(or not) is the primary question every executive asks.
And fear of being outsourced is in the heart of most
every worker.
Adept CEO’s
understand that the devil is in the details. All steps
taken must be carefully measured. The gifted ones know
once that outsourcing, or significant in-sourcing, is
broached as part of a total “sourcing strategy”,
life as the company knows it will forever change, even
if no action is ultimately taken.
Addressing
changes in these strategies begins in the abstract,
but the objective is to develop a cogent plan. No two
are alike. There are, however, similarities in transitioning
from the oblique to the specific; and they start with
the evaluation committee itself.
Assembling the
Team
The best
strategy teams work in an unbiased environment, which
limits the agendas of the individual members to enhance
the overall business mission. These members must be
altruistic and committed to finding the right answers:
even if some of them encroach on their turf. The biggest
mistake comes from haphazardly convening the wrong team
then trying to keep its deliberations quiet. This creates
confusion, concern and angst among employees, especially
if nothing is produced. Do this quietly, informally
and off-site. If you can get through step one (having
a basic working strategy) that mission’s accomplished.
The team
must be matrix in nature and understand (or at least
appreciate) outsourcing’s impact on each individual
part of your business model. Their backgrounds in finance,
lines of business and project leadership help set defined
goals for the strategy. They understand what’s
possible within the outsourcing and shared services
world and translate those possibilities to your business
model. Collectively, these team players must understand
the fundamental questions you clearly pose. “What’s
the inspiration for outsourcing, and why? What are our
goals? What strategies are we willing to adopt (and
not)?” This group must think through your business
model and determine what makes sense (from both configuration
and location perspectives) for both the current base
case and future state of the organization and develop
a number of scenarios.
As you
survey the work of this team, weaknesses to either commitment
or results might be detected. Often, a trusted, experienced,
unbiased third-party that compliments this group is
a powerful advantage that can “nudge” it
toward the outcomes you’re searching for or, if
appropriate, take a stronger leadership role to find
the right answer.
It’s
easy to get caught in a perpetual loop when looking
at the big picture and trying to translate it into tactics
(especially when factoring employee morale) since today’s
fundamental outsourcing driver is the offshore/cost
element. It’s changing everything. The pure labor
arbitrage savings, if approached properly, are significant
and can be used to find new ways to do work once moved,
or simply finance the cost of change in other areas
of the business.
Lead, Champion
and Own
Finally,
as CEO you have to own the strategy and understand the
facts clearly. You also must ask yourself if you’re
going to take ownership of this strategy or simply champion
it and leave it to the troops to figure out. Are you
prepared to see it through? You are going to ride a
lot of heat (justified or unjustified) for what you
are doing. The rank and file will generally be “against
it.”
The dilemma
with a strategic sourcing effort (other than the fact
that it is often protracted) is that you have to make,
and then live with, hard decisions. Are you willing
to champion this day-to-day, to the end?
Build a
good team. Ask for qualified outside help if you need
it. Give the group solid and clear parameters to see,
discuss and develop. And understand that a clear strategic
plan the team produces (that you are willing to take
ownership of) is the beginning of what will be an exciting
and positive new chapter in your company’s history.
|
