November 22nd, 2008
Investing in the right vehicles for change
This whole automotive situation is a microcosm of the broader issues facing the crumbling Western economies in this crisis market, and these issues require significant surgery to our very corporate DNA. And outsourcing and globalization are right at the heart of the issues.
Outsourcing provides an enabler for businesses to change, but ultimately we have to be put in a position where we have to change our corporate DNA and stop clinging to the inefficient ways of the past. That time is now upon us and we need to embrace new ways of working, and new ways of doing this smarter. And if it’s fear that is driving us, some short-term panic, some short-term hardship, is a small price to pay to find new avenues of growth and value-creation further down the road.
And that doesn’t mean businesses should go out and find outsourcing providers to save them a few dollars today, for the sake of making a quarterly target. Once you take out some short-term cost, that cost is gone. You saved some money, but what are you left with? Where are the next avenues for further optimizing your business? Once companies move into a multi-year outsourcing engagement they are locked in with their service partner for the long-haul. Hence, selecting that provider which can help you achieve value across all four of these vehicles has never been as important as it is today:
Vehicles for change:
1. People: How can you ensure you have people who are creating value for your business, work with pride and energy, and are always looking at ways to improve their performance?
2. Processes: How can you constantly be finding new ways of achieving business outcomes more profitably?
3. Technology: How can you access all the data-points you need to understand how to drive better performance and constantly refine your business processes?
4. Global Sourcing: How are you embracing talent, process acumen and technology from third-parties, shared service centers, captives and partners around the world to produce cheaper, better products and services than those of your competitors?
And this change in our corporate culture isn’t something that comes from the top-down - it comes from the bottom-up. An individual business can create its own culture, its own ways of creating products and delivering services by driving these four vehicles more effectively. If you don’t want to work for that business, that’s your choice, but the successful workers of the future will find companies that get the best out of them. Bailing out Detroit won’t change these automotive businesses, unless the automotive leaders truly want to embrace changing their very DNA and use the vehicles at their disposal to make them more profitable, more innovative and more nimble than their competitors.
Phil Fersht is an acknowledged industry analyst and advisor across Outsourcing and IT services worldwide, having worked extensively in Europe, North America and Asia as an advisor in Business Process Outsourcing (Finance/Accounting, Human Resources and Procurement), IT Outsourcing, Shared Services and Offshore Services. Over the last 14 years, Phil has served on over 70 major outsourcing and offshoring engagements. He currently serves as Research Director for analyst AMR Research for Global Business & Outsourcing Services. See his full profile and disclosure of his industry affiliations.
