As the job situation in America stubbornly refuses to improve, people look for scapegoats. We in the outsourcing world have long been a prime suspect.
Now two professors at M.I.T have just published a book that serves as a beautiful rebuttal when people blame outsourcing for the lost jobs. In their eBook, “Race Against the Machine,” the professors predict more jobs for machines, not people. In other words, it’s automation, stupid!
Erik Brynjolfsson, an economist and director of the M.I.T. Center for Digital Business, and Andrew P. McAfee, associate director and principal research scientist at the center, are experts on… 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
“Fear and uncertainty gripped the city” . . . “Rumors have been swirling” . . . . A great opening line like these just isn’t coming to mind today for this blog. Nevertheless, the importance of the outsourcing news items I’m blogging about shouldn’t be underestimated. Making my pulse list today are outsourcing developments we should all keep on our radar screens.
But then . . . along came IBM. Amidst countless media articles and industry surveys and reports predicting the adoption of outsourced cloud services are many that point to the inherent security risks and complexities that may slow adoption. But… Read the rest
Over the past 20 years, the outsourcing request for proposal (RFP) process fueled the growth of outsourcing on a global basis. It served as a framework for buyers to evaluate service providers and their proposed solutions. Overall, it provided buyers with the details to reduce the risk related to large outsourcing transactions and led to identification of best practices, templates, and processes that leveled the playing field for unsophisticated buyers. For service providers, the RFP process initially provided a structured platform to present their solutions and differentiate their services.
All of these developments were extremely positive and would normally insure that the RFP process… Read the rest
Win-win approach. Collaborative relationship. These buzz words are tossed out frequently as a hallmark when executives describe their outsourcing relationships. But the terms are apt to be misused. I’ve had some interesting conversations about winning and collaborating in outsourcing relationships. One executive summarized an event in his company’s relationship this way:
“When we identified the root cause of the issue, we collaborated to determine the solution that would meet our needs and be a win-win.”
Despite the fact that a lot of companies use the buzz words and label this kind of situation as a win-win approach and as collaborating,… Read the rest
MindTree was ranked among the fastest-growing technologies companies on the Deloitte Technology Fast 500 Asia Pacific 2009, recognizing its “customer success through innovation solutions and happy people.” In addition, MindTree’s Executive Chairman and co-founder, Ashok Soota, received the Gold Peacock Award for Technology Leadership from the Institute of Directors. This interview of Salil Godika, MindTree’s Chief Strategy Officer, presents insights on aspects of innovation, leadership, and change management in managing an outsourcing relationship.
In interviewing buyers of outsourcing services, I have spoken with many who claim that their service provider did not achieve the level of innovation the buyer anticipated.… Read the rest
I’ve blogged before about some of the lessons learned from mistakes made in outsourcing relationships that caused the parties to achieve less value than they anticipated. But as another blogger commented, last week, why not also learn from those who got it right, those who found keys to success. That’s definitely the most valuable approach. So this blog presents a perspective shared by those who got it right.
When I’ve asked hundreds of outsourcing buyers over the past decade to share a characteristic that is key to keeping their interests aligned over the long term, one of the… Read the rest
There’s a growing recognition that an outsourcing initiative is a journey. Executives of some of the world’s leading companies have said that to me when I interviewed them about the successes and challenges in their outsourcing arrangements.
A question I’ve asked when interviewing literally hundreds of outsourcing execs is what they would do differently the second time around if they had an opportunity to start over (from the initial negotiation phase).
It’s hard to believe, but a few (very few) say they wouldn’t do anything differently and that everything went smoothly and according to plan. Many reply that they actually… Read the rest
Trust is something that really trips people up in outsourcing relationships. In my talks with hundreds of executives involved in outsourcing over the last decade, I’m intrigued by the fact that when I ask executives about the trust level in their relationship, some can’t determine if trust is there, some say they thought trust was there but then something happened that indicated otherwise, and most who say trust is key to their success can’t describe how to build or sustain it.
Outsourcing has an inherent challenge that makes trust become crucial to achieving successful outcomes. We’ve developed all sorts of… Read the rest
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