INNOVATION - THE "ILLUSIVE" GOAL IN OUTSOURCING AND SHARED SERVICES

By Bill Frech, Co-Founder, CandidAdvisors

When you ask an executive to describe what they would consider innovation, you’ll get answers that are all over the map; from standardization of support service processes, implementing best in class processes, to implementing leading edge processes that differentiate them with customers.

Given this range of answers how does one not only define innovation but also realize when they have achieved it?

A number of outsourcing contracts I’ve worked on have defined innovation as:

 “XX% savings in contract cost every year after “steady state” is reached.”

But is that really innovation or just cost reduction?

The bottom line is innovation means different things to each person and is heavily dependent upon your starting point. 

Ideally, contracts should be structured to assure both parties consider innovation and discuss and adjust on a regular basis.

Your view of innovation will change and evolve over time as you implement improvement.  Therefore it is essential that innovation be clearly defined as part of a contract such as adding gain sharing to incent both parties to develop and implement innovative solutions.

3 Critical Questions to Simplifying Complexity

By Bill Frech

How many different outsourcing contracts does your company have?

Most large companies find themselves with multiple contracts in the IT and BPO space, often with different providers. In fact according to Julia Kotlarsky, an Associate Professor at the Warwick Business School, most businesses are throwing billions of dollars at IT outsourcing contracts despite having little understanding of what they spend or get for their money.

This multitude of contracts has resulted in more management complexity and in some cases more complexity for the end-user. Frequently, separate organizations or different groups within the same organization manage these contracts.

3 critical questions:

1) Are contracts still providing value to the company?
2) Are contracts still in support of the company goals?
3) Are the end-users of these contracts getting what they need to run their business on a daily basis or are shadow organizations and solutions arising?

This white-paper "Outsourcing has become an Evolution to Complexity, Increased Cost and Unknown Value" will discuss how companies have evolved to this situation and what they need to do to put mechanisms in place to ensure the outsourcing agreements support the long-term business goals.

Simplifying Complexity - Part 1: Integrating the Large Team

By Steve Jandrell

Integrating the Large Team:

The Challenge of Unplanned Complexity

Large scale projects, whether they are; the result of a business transformation program, technology based, the result of a merger or acquisition, part of a move to a shared services model or the result of an outsourcing arrangement may be characterized by one or more of the following:

• Multiple teams with individual goals
• A blend of employees and consultants
• Independent contractors
• Outsourcing vendor(s)
• Specialty advisors (e.g., legal, audit, tax)
• Trainers
• Different working styles

This is a complex operating environment. Even the best planning can lead to complexity, but when decisions are made at the tactical level, or are incrementally made, this complexity can grow exponentially. The complexity issue has many dimensions, including differing methodologies, performance expectations, operating cultures (even national culture), standards, definitions of team work and success criteria.

The challenge becomes one of integrating potentially disparate groups into one cohesive whole. To achieve this, these questions need to be answered in the affirmative:

- Is there clear, visible and active sponsorship?
- Is the end goal defined in tangible and specific terms for the entire effort?
- Is a leadership structure in place with roles and responsibilities unambiguously defined?
- Has a brand identity been created?
- Is there a detailed program plan with supporting project plans?
- Are milestones and measures built into that program and project plans?
- Is there one overarching set of methods and approaches?
- Have performance standards been set and communicated?
- Have cultural differences been discussed, defined and accounted for in plans?
- Have team based and cross team reward and recognition plans been developed and implemented?
- Is a retention and re-entry plan in place for employees/associates on the program?

Creating commonality of purpose is not a one-off effort. Collective success is the definition of program and project success. It needs to communicated regularly and reinforced by leadership action and example.

Read more | Attend a Session

Achieving More with Less - Positively

From Steve Jandrell, Co-Founder CandidAdvisors

This post is a response to today's WSJ Article Employers Hold Off on Hiring - Doing More with Less - http://bit.ly/2A3Sbl

In many ways, the negatives of an economic down turn and the slow recovery from an employment and jobs perspective, dominate the debate. Economists seem to agree that even with a fair wind, getting unemployment back to 5% will take 8 or so years. As operating costs are cut, hiring freezes put in place, budgets trimmed, productivity requirements inevitably focus on doing more with less. The threat of unemployment makes workers more amenable to working fewer hours while still delivering; process efficiencies and changes in work flow add to the productivity gains. But so much is borne of fear.

There is a point however, that seems to be consistently missed. Business process efficiencies, people working harder, intelligent application of technology are all important, but what about employees raising their game based on the positive perspective of developing an individual and collective sense of high performance and mutual support, regardless of the prevailing economic environment?

Most people want to be part of a winning team. Very few wake in the morning thinking, “I want to sub-optimize my contribution today.” Yet it happens all the time. The solution is not a theoretical, “let’s all bond” but a measured and planned effort to leverage the fundamental human need to achieve and be successful. In so many cases it is at the team level where this can occur.

Internal business and work relationships in corporate America are typically superficial and polite. Stereotypes are formed (often quite wrong), and there is a prevailing attitude of leave decisions on how to improve things to the boss, or he and she will not want to delegate (or in their mind, abdicate) responsibility.

It doesn’t have to be like that. If companies organized to ride the wave of human creativity and people’s need to succeed, and thus created focused support networks, the term empowerment is taken to a different level. This economic climate may be the vehicle for this. Not just doing more with less, or even achieving more with less, but creating a work place of support, positive reinforcement and folks really playing to their strengths. Becoming the true winning team.

In the end, winning a Super Bowl is not about, for example, whether the Quarterback and the Wide Receivers like each other; it is about each player knowing their strengths and limitations, finding ways to work together for maximum impact and celebrating the fact that their individual and collective goals are clear and are given the space and encouragement to achieve them. In this scenario, performance is everyone’s responsibility. If a co-worker is not playing to their strengths, shouldn’t this be of concern to the rest of the team? In so many occasions, it is never really addressed – it is apparently safer not to.

Listen to Steve live via the CandidAdvisors webinar series: REGISTER

Read the original article at The Wall Street Journal

Creating and Sustaining High Performance Work Teams with CandidAdvisors

CandidAdvisors is pleased to partner with and offer the Belbin Team Roles Workshop

Whether you are building a new team, want to refresh an existing team, or are looking to create a common focus between two groups that desire to collaborate more effectively, CandidAdvisors can help. Using a unique and behaviorally anchored approach, CandidAdvisors offers a one to two day workshop, depending on the size of the team. The key elements are:

• Defining high performance in terms of outcomes and behavior
• Using the Belbin Self Perception Inventory, completed on line, with individual feedback and a collective assessment and aggregated team profile
• Showing the relationship between team work and heightened group creativity
• Understanding the need for a sound team process as well as agreeing what roles individual team members can play
• Exploring the options for individual team member contributions
• Having a framework to discuss and measure what total team effectiveness means

This is a facilitated process where the team itself sets its standards in the context of what the team is mandated to deliver, its measures and agrees the means for self correction moving forward. Part of the process includes insight into what each team member potentially brings to the working of the team and what each team member can reasonably expect from other members, including ongoing feedback and support.

Please contact info@candidadvisors.com for information on how you can bring the Belbin Self Perception Inventory and Belbin Team Roles Workshop into your organization, and read more about our Partners Here.

What is Cloud Computing? (What a difference a Year makes)

"Cloud computing is an operations model, not a technology" James Urquhart Market Manager for the Data Center 3.0 strategy at Cisco Systems.

From May 2008 Web 2.0 Expo


From July 2009 OSCON 09: Simon Wardley, "Cloud Computing - Why IT Matters"

Is finding “real” independent advice in outsourcing a challenge?

On CandidAdvisors - by Co-Founding Partner Steve Jandrell

There are many players in the world of outsourcing, from those who help companies select outsourcing vendors, to those who deliver outsourcing services. The one thing all these players have in common is that they need companies to outsource to be able to sustain and grow their own businesses.

But what happens if outsourcing a set of functions or processes is not the right answer from a strategic business plan perspective?

Whether it is on shore, near shore or off shore a key driver (some might say the driver!) in the decision to outsource is long term operating cost reduction.

While cost reduction is a vital aspect of successful management, what about creativity, innovation, knowledge management and outstanding levels of customer service? Then, if the transition to a new operating model is more focused on a date to achieve cost benefits as quickly as possible - without necessarily building in to the transition plan a people and organization perspective that encourages buy in and plans for long term performance and remedies - what needs to happen?

With many companies who have made the decision to outsource significant parts of their operations, after a two to four year arrangement with an outsourcing vendor or vendors reporting high levels of dissatisfaction, how is that recovered?

The potential for any provider of services in the world of outsourcing to have a conflict of interest is arguably obvious. They have people on their payrolls to deliver services. They incent their people to win business and as much as possible. Making the right balanced decision to outsource in the first place, taking into account all factors and not just cost, to transition in an appropriate way and to manage vendors to maintain high levels of performance over time can be a real challenge.

The role of a truly independent adviser at any stage of the outsourcing / insourcing process is clear. But where do business people go to get that independent advice? With that in mind, CandidAdvisors LLC was founded by two experienced and senior practitioners. As Founders, both Bill and I have major firm experience, and have worked internationally.

We have successful track records of providing candid and results focused business advice to top management and to those tasked with implementing changes to operating models. Using our experience of business transformation, outsourcing / insourcing, shared services and organizational change management, we apply this experience through the principal of “best advice” with no hidden agendas. Our solutions are developed based solely on client issues and options and how those solutions fit with the strategic intent of our clients.

The Social Renaissance of Business

By CandidAdvisor's Bill Frech, @bill_frech

"The upheavals occurring in the arts and humanities were mirrored by a dynamic period of change in the sciences. Some have seen this flurry of activity as a "scientific revolution", heralding the beginning of the modern age. Others have seen it merely as an acceleration of a continuous process stretching from the ancient world to the present day." Renaissance of the 14th–17th centuries, Shapin, Steven. The Scientific Revolution, Chicago: University of Chicago Press, 1996

Forbes' Investopedia.com recently highlighted that the recession may negatively impact the quality of goods and services and will result in reduced consumer access to companies.

Adweek cites; “New research from Interpublic Group's Initiative concludes that the recession is having a far greater impact on consumer spending habits than previous downturns, and that some behavior patterns, as well as brand perceptions, will be permanently changed.”

Forrester Research views this recession as a “…gateway or portal connecting two very different eras.

“When the economic clouds clear, many prevailing elites will have been swept away, organizational structures will have fallen, and many who were formerly in control will have lost power. Those who can speak digital will thrive, and those who cannot will finally get the message and retire.”

Saying that the business world will radically change - that old-line companies will be gone and new socially aware companies will survive to take their place is grossly overstating what may happen.This will not be an overnight change where the "old" ways disappear and the "new" world exists.

There are two primary reasons;

* One, the "old" companies are still powerful from an infrastructure, capital, and customer base perspective. Some of them are willing to change to the "new" world, e.g., Comcast, and some will resist change.

* Second, and probably more significant is that there is a huge group of baby-boomers who are still a force in the marketplace. The baby-boomers represent a group with a significant amount of capital to spend, and many may be uncomfortable with the change needed to work in the "new" world.

I do agree that the way companies conduct business is changing and will continue to change and evolve; potentially this recession is an inflection point for that change.

However, I think this will be a more gradual transition as new technologies and new ways of doing business are tested and companies experiment with different tools and techniques.

Like any other seed change; we don't know what will be on the other side of the change. There will be many people and companies trying different approaches to achieve the winning solution, but only a few will succeed and yes some of the old line companies will disappear…eventually.

I welcome a dialogue. Leave your comments and let's discuss this.

Footnotes:

The CounterIntuitive CEO, George F Colony’s Blog, June 23, 2009 The Gateway Recession: What CEOs Will Face Next
Forbes Investopedia, The Impact Of Recession On Businesses by Marc Davis
Adweek, June 22, 2009 Survey: Recession Impact Permanent by Steve McCellan

Join Us in Atlanta - 1st of Four Presentations at the 191 Club

Counting the Cost….!!
The Myths and Realities of Back Office Business Transformation

Many organizations today are suffering from productivity and revenue declines, lacks of innovation and poor customer service as they try to balance the need to rapidly reduce cost while maintaining viable business operations. Various solutions are being presented and adopted, including Outsourcing, Shared Services, focusing on your core business competencies, etc. But what is the effect of short term decisions about cost containment and efficiency without a clear longer term plan, not just about business survival, but of future growth?

In this unfavorable economic climate the pressure for cost reduction is inexorable and understandable. Yet decisions that potentially compromise corporations’ positive relationships with their customers, vendors and even their own employees are being made on a daily basis. Market share is being put at risk and internal frustrations are growing as non-holistic and non-integrated perspectives are being developed and implemented solely from the cost side of a balance sheet. Imagine a future operating environment where there are 5 to 10 outsourcing service providers, 1 to 3 shared service centers and minimal involvement of the retained organization that must make things work.

The picture is not always bleak. There are successes. But overall over 70% of US companies, who outsource describe the experience as either very or extremely disappointing. After 2 or 3 years organizations are looking for ways to improve the situation.

The 191 Club is pleased to offer four breakfast presentations.

• The first on July 22nd, is an overview of the process from the decision to transform and adopt new operating models to establishing a long term and viable adaptive process.

• The second on July 29th, focuses on the decision to transform and the transitioning process, with all the attendant issues involved in creating and establishing a new business model and its impact on the retained organization.

• On September 10, the third session will be about making it work for the longer term, with the added complexity of leveraging emergent technologies and the need for vigilant governance to have a constant process of alignment to the goals of the business.

• The fourth on September 23rd is about measurement, sustainment and what to do when it is apparently not working.

The Founders of CandidAdvisors LLC will be your presenters.

Representing a new breed of advisory services needed in this current and developing environment, CandidAdvisors is completely independent, solution agnostic and focused on the principle of “best advice.” Bringing senior experience and objectivity to a space full of vested interest, the goal is to help companies make the right business decisions and implement change that builds and enhances the capabilities of the business today and tomorrow.

For more information on this series, or talks for your organization, please contact steve.jandrell@candidadvisors.com