Effective Collaboration And Outsourcing Success

One slide (below) from an HfS Research webinar yesterday highlighted how effective collaboration is at the heart of outsourcing success.  Coming from HfS – at the center of the industry, with no particular ax to grind – it’s significant.

 

 

 

 

 

 

 

 

 

The market has moved beyond cost savings. Buyers are looking for outsourcers who can deliver innovation and continuous improvement:  “Most clients want to work in a collaborative relationship”, said Phil Fersht, HfS Founder and CEO.  Yesterday’s case study featuring Syngenta Business Services and Capgemini provided a superb example of effective collaboration in practice.

Effective collaboration demands the right people, the right structures and the right incentives. Providing the underpinning framework – rich, robust and intuituve – that enables this complex, dynamic and multi-layered collaboration is the strategic opportunity facing the process management platform vendors.

Related Posts

15 Nov 2012    Outsourcing’s Secret Sauce

23 Oct 2012    Mapping The Stakeholders in GBS Success

© Text Michael Gammage 2012

No Other Corporate Asset Is Wasted So Spectacularly

Another week, another client struggling with process amnesia.

I’m looking at an RFP from a household name with “no process documentation available” with respect to its core financial system and the business processes it enables. Last week, I was involved with a global organisation that had thrown out a well-known SI after wasting (their word, not mine) a considerable sum trying to capture their core processes. Next week, I’m working with a client in the energy sector with a complex and ageing system in urgent need of upgrading, but with almost no understanding of how the system works or how it connects with their business processes (which seem to be largely anecdotal anyway).

Ignition of match, with smoke on blackMany organizations – and we’re talking big and global, oftentimes – are repeat offenders. Their binge cultures make them ATMs for the Big 4. They spend millions on a mapping project but the processes are never adopted, and the organizations have only the most feeble mechanisms to maintain them, and so, two years later, a new mapping project kicks off.

It’s true that Nimbus clients generally migrate out of any other process format or tool, which also waste of a sort. One client ditched man-years of process capture of its European finance operations undertaken by one of the Big 4 – but it pays off in adoption and sustainability.

Put to one side the missed opportunities from not taking process excellence more seriously –  minor things like, er, avoiding IT project failures or success in multisourcing – just at the very simplest level of avoiding unnecessary costs: Is there any other corporate asset where waste on the scale that is considered normal in ‘process management’ would be tolerated?

Things are changing but, really, how did ‘process’ get such a bad rap? It’s the DNA of the organization, for goodness sake. How did we get to a situation where it’s considered unremarkable that an organization cannot describe its business processes, or how they are supported by its systems?

There’s a doctoral thesis for someone in all this. Not sure whether it’s a tragedy or a comedy.

Related Posts

05 Sep 2012    Translating An Operating Model Into Real Work

28 Aug 2012    The ROI On Process Visualization

© Text Michael Gammage 2012

Outsourcing’s Secret Sauce

Deloitte - Outsourcing Today and Tomorrow - Nov 2012Deloitte’s report Outsourcing, Today and Tomorrow, just published, attempts to define the secret sauce for outsourcing. The authors are engagingly frank:

“We wish we could wrap up this paper with a pithy summary of the secrets of effective outsourcing, boiled down into a neat list of easy-to-digest bullet points. Unfortunately, if such secrets exist, no one has yet discovered them.”

But they go on to suggest ‘one possible candidate’ for outsourcing’s secret sauce:

“The recognition that outsourcing, like other complex business practices, is a discrete business discipline requiring specialized skills that cannot easily be developed on the fly.”

Which may be true – let’s agree it’s one of the essential spices – but it overlooks an essential ingredient, arguably the foundation for outsourcing’s secret sauce: a platform for effective collaboration, which surely lies at the heart of successful outsourcing.

This platform provides a common language: end-to-end process, expressed in the language of the business, not IT-speak. It is comprehensive, not just IT-oriented. It provides integrated perspectives, not just a repository of process fragments. It is wrapped within a robust governance framework to enable process stakeholders – across the enterprise and including especially IT – to effectively manage change. And, crucially, it enables deployment to process users in a way that is personalised, intuitive and engaging.

The Deloitte report – which polled 100+ sourcing professionals earlier this year – provides ample evidence that this need for a common language, a framework for more effective collaboration, is real and growing:

Outsourcing is big – a $480bn industry this year – and set to expand. So too is offshoring.  But operational roles and responsibilities are often amazingly unclear. [There is far too much focus simply on contractual negotiations]

Cloud will vastly increase its complexity. [as will Social, Mobile and Big Data]

Churn is increasing: half of clients have terminated contracts for convenience, sometimes to insource, most often to re-outsource. [Managing complex dynamic multisourced service delivery environments is becoming the norm]

Innovation and sustainable success in continuous improvement can’t work without it. [Innovation and continuous improvement is the area where organizations report that they are least effective in working with service providers].

Related Posts

21 Aug 2012    How To Simplify Global Shared Services

20 Jun 2012    Process: The Emerging Global Business Language

© Text Michael Gammage 2012

ROI And The Value Of Time

MIT Sloan Management ReviewThere’s few organizations willing to forgo an ROI calculation and instead back a hunch. So huge kudos to GE, whose investment in CoLab, its social media platform, did exactly that, as GE’s Ron Utterbeck explained in the latest MIT Sloan Review :

“We haven’t tried to come up with an ROI. Haven’t wasted a moment’s notice even thinking about it.”

But the GE team is absolutely on the ball, tracking every aspect of CoLab’s uptake across GE – recognizing that adoption is where its true value lies:

“It’s not a system that people have to go to, but people still come back every single day. They come back because it makes their job easier, because they’re getting value out of it. Going and spending money on ROI would be, honestly, in my opinion, just a waste of money because your true value of this is people are coming back”.

Most organisations of course don’t have this kind of self-confidence and insist on seeing the ROI.  And that’s where the difficulties start for projects – like social media – which deliver more effective collaboration.

I’ve been involved in ROI exercises with several clients where time savings have underpinned the business case.   We often use only the most conservative of assumptions, and constrain the benefits to what can be properly quantified.  But even these savings are often perceived to be flimsy.  Faced with justifying it to the COO, stakeholders readily fall back to apologising that ‘it’s just time savings..’

Which is curious because, as any economist will tell you, the value of time underpins most transport infrastructure investment.  It’s time savings for users that have driven the development of roads and railways in many countries for at least the last thirty years. [I happen to know because I started life as a transport economist, calculating time savings for Asian highways, African railways and the Channel tunnel].

Maybe it’s because the time savings are measured in seconds and minutes rather than days and weeks.  Saving a day is obviously valuable. But when it’s the summation of five minute savings, people fall to wondering whether it won’t be wasted.

Whatever – we need to recognize that time matters, and that we should value it appropriately (as individuals, of course, we do it every day: paying for express lanes and priority, or for toll charges to use a shorter route, for instance).  Otherwise we are choking off initiatives with potentially very substantial ROI.  Even better, we need more GE-like chutzpah.

Related Posts

29 Oct 2012    IT Project Failure: How Did We End Up Here?

28 Aug 2012    The ROI On Process Visualization

© Text Michael Gammage 2012

IT Success: Never Let The SI Take The Wheel

Large IT projects frequently fail. One of the SIs (the usual suspects) is invariably involved. So are the SIs in some way the villains – or just unlucky to find themselves, so often, innocent bystanders at the scene of the crime?

Client organizations don’t do major systems projects every year.  SIs do them for a living. So it’s natural that clients look to leverage their SI’s expertise, a tendency reinforced by the SI’s pitch: ‘We’ve done it a hundred times. Just trust us…’.

It’s understandable too that, once the SI has been selected, clients most often sigh with relief – and surrender to their comforting embrace. Willingly seduced, they allow their SI’s methodologies and tools to dictate almost every aspect of their program.

The client and the SI have conflicting agendas of course, in at least two vital areas:

Business Transformation vs IT Project. The SI is hired ultimately to deliver an IT project.  So the SI will always focus on the technology issues.  But all the evidence suggests that projects fail when they neglect business stakeholder engagement and lose sight of wider business perspectives.

Sustainability. The SI has a project focus, often strongly reinforced by contractual incentives.  The SI needs to get the system delivered so it can get paid and move on. Whereas the client has a longer term and more holistic perspective. The client is looking for sustainable improvement.

These conflicting agendas can be worked out – through an ongoing dialog driven by the client, which must retain responsibility for staying in control of the SI relationship.

But most client organizations just don’t have a collaborative framework to enable this essential dialog in any productive way. The result is that the SI usually takes the wheel.  And so the focus shifts to the IT aspects and the system go-live, significantly increasing the risk of project failure.

Straws in the wind suggest that things are changing. IT projects that I know of which have adopted Nimbus have also reduced the SI’s role.  By spending less, they seem to get more. The client avoids capture by the SI, and so can ensure the effective collaboration that prevents ‘a business transformation project enabled by IT’ degrading into ‘another IT project’ – significantly increasing the chances of sustainable success.

Essentially, the client gets to focus the SI on its core competences – and avoids the cost of man-years of consultants leading low-value process workshops in airport hotels.

Related Posts

29 Oct 2012    IT Project Failure: How Did We End Up Here?

23 Oct 2012    Mapping The Stakeholders in GBS Success

© Text Michael Gammage 2013