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As the outsourcing service provider landscape continues to shift through mergers and acquisitions, how can buyers construct their contracts to protect what they envision in the relationship despite a change in provider ownership? I spoke with two attorneys, James Nelson and William Russell in the New York office of Venable LLP, who frequently counsel clients on mergers and acquisitions and outsourcing matters, and asked them about insights and best practices to protect the interests of buyers of outsourced services.
Q: Sometimes when a service provider is acquired, some of the service delivery nuances that were in place with the prior… Read the rest
I remember 2003 and 2004 because that’s when most companies I interviewed about outsourcing arrangements started talking in earnest about “taking a partnering approach” to get more value from outsourcing. Since 2006, many have talked about their successes in partnering. But here’s the reality; they were only partial successes.
Partnering helped them get through the transition phase easier and helped them try to resolve challenges in a win-win manner; but when the business situation changed and thus impacted the buyer’s savings or the service provider’s margins, most of them still hit a wall despite the partnering approach.
There were foundational
Procurement outsourcing is maturing. Buyers in the first wave outsourced primarily transactional-rules-based activities, with labor arbitrage in low-cost countries being a key benefit. As those relationships mature, buyers look to their providers to create additional value beyond labor arbitrage. I talked with two Infosys BPO executives, Srikrishna Koneru, Global Sourcing & Procurement Outsourcing-Solution Design Head, and Rajiv Gupta, Geo Business Manager, about procurement/sourcing trends, how Infosys is helping its customers move up stream and capture more value, and about how Infosys’ Joint Innovation Board benefits customers.
Q: How does the value proposition differ in “sourcing support” compared to “procurement,” in… Read the rest
With outsourcing being used for ever-more complex services, there are more variations and risks that could impact intellectual property, particularly when outsourcing product development or research and development (R&D) functions. I spoke with two attorneys, James Nelson and William Russell in the New York office of Venable LLP, who frequently counsel clients on intellectual property and outsourcing matters and asked them to share some insights for buyers of outsourced services in these situations.
Q: There are so many companies that don’t use third-party consultants or attorneys anymore because they have experience in outsourcing and have a center of excellence or… Read the rest
Don’t you just hate having to say “I should have paid more attention to that”? Here are four news items that caught my eye, as they bode strongly of trends that will change the outsourcing pulse.
Pay attention to these trends now and start planning for them in your future outsourcing strategies — or you’ll wnat to kick yourself later for not having done it sooner.
Trend #1. U.S. and UK banks are currently reducing the number of service providers they use, narrowing them down to two or three providers with whom they have a high level of… Read the rest
Almost as fast as a wink – that’s how quickly word spreads on Twitter. And everyone’s doing it – you’d have to have been under a rock, so to speak, not to know of the tweets covering the Royal Wedding (2.7 million social media mentions) and of the even bigger stats on tweets about the death of Osama bin Laden.
But did you know that there’s a hedge fund now using tweets to predict market movement? Research by two universities says the emotions expressed about companies tracked through tweets will predict market movements up… Read the rest
Here’s a snapshot of today’s communications:
- Words are abbreviated into scant “code” in text messages
- Corporate branding messages are squished down to 140 characters on Twitter
- Paragraphs or even entire pages in articles and reports are shortened to bullet lists
Funny how this sound-byte way of communicating cajoles us into thinking we can similarly truncate our behaviors yet still be successful in the relationships in our lives.
Reality says that’s not the case. There are all sorts of entangling knots within relationships, and the potential for damage is high when we don’t slow down and take the time – read… Read the rest
News reports over the past two weeks highlight the movement of midsized Indian service providers, Firstsource Solutions, WNS Global Services, and Intelenet Global Services deeper into North America instead of Europe. Others are moving deeper into Latin America and China. China’s outsourcing providers are taking hold in North America. Over the years I’ve followed and written about outsourcing, I’ve pointed out that competition in the service provider landscape is good for the buyers.
But maybe not. Let’s look at the bigger picture.
When a competing provider enters a market, an incumbent provider’s customers are vulnerable. The “hunters” on the new… Read the rest
Kudos to Adrian Gonzales for his perceptive – and accurate – blog regarding gain-sharing!
Those who equate Vested Outsourcing as meaning the same thing as gain-sharing clearly haven’t read Vitasek’s book. (I have, and I’ve blogged about it before, here and here.)
And those who think gain-sharing “doesn’t work” are not correct. Here’s why.
While it’s true that some sourcing relationships with a gain-share component encounter problems, it’s usually because they didn’t structure the gain-share agreement correctly. I’ve talked with more 20 buyers of outsourcing services who, when they ran into… Read the rest
Over more than a decade, I’ve asked hundreds of buyers of outsourcing services which means of communication proved more effective in successfully meeting their objectives: ad hoc, informal communications or formal governance meetings.
By far, the majority stated the governance meetings were absolutely essential. However, most also stated that the ad hoc, informal communications were more effective at managing issues more quickly.
When I asked buyers which method of communication was more effective in managing the relationship itself, there was a greater variance in opinion. I was reminded of this recently when I watched a program about hiking the… Read the rest
Recent Comments
“Great interview with a top professional! Shared. Mel, alldayPA ”
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