By Jon Tonti
Sourcing external service providers to reduce costs and increase efficiency is the strategic sourcing baseline for any company. From that starting point companies grapple with how to get the most out of their strategic sourcing by finding the right providers and then aligning with them. A lot of company money is spent on consultants to advise management teams how to do exactly that. Nearshore Americas talked with Scott Madden’s Andy Flores in order to take advantage of his knowledge and the residual knowledge built up at Scott Madden in regards to strategic sourcing.
The obvious goal of any outsourced operation is that the provider is a seamless extension of the company they serve. That ideal is easy to expound but difficult to achieve; if you are not familiar with Kanban, and its capacity to positively impact how knowledge work is carried out, you may be leaving a lot on the table.
By taking a bigger chunk of the contract “lifecycle”, legal looks to contend for business typically owned by Deloitte, KPMG and others
By Luke Bujarski
In addition to contract negotiation best practices, last week’s outsourcing conference organized by global law firm Baker & McKenzie revealed an increasingly integrated role for law firms within the global sourcing advisory industry. Lawyers and firms like B&M are now pushing their services beyond single function ‘legaleez’ contract drafting and negotiation into the domain of tier one consultancy.
What to watch out for in multi-location, multi-supplier deals, according to a Nexus panel with UBS, Capgemini, Citi and NeoGroup
By: Michael Santamaria
There’s little doubt that Business Process Outsourcing is here to stay; the lure of “easy” cost savings is just too powerful for companies to resist. But the truth of the matter is that implementing a successful outsourcing project is hard work and realizing those “easy” savings is by no means a foregone conclusion. While data on outsourcing failure is hard to come by, the Aberdeen Group has reported that 21% of outsourcing projects fail to meet stakeholder expectations, and Gartner puts the outsourcing failure rate as high as 30%. Although neither study defines what constitutes a “failure,” the bottom line is a large percent of projects end with unhappy clients.
In my recent article, we concluded that the most important aspect of managing remotely is building a strong and trusting relationship. Creating a partnership that doesn’t rely solely on the contract for the outsourcer to get performance security. The partnership is critical because once operations are outsourced, real influence over daily management will and should be limited, or why outsource at all? The partnership needs to be based on respecting each other’s expertise, ensuring roles and responsibilities are clearly defined and that the underlying business model justifying the decision to outsource is protected.
By Robert L. Scheier
Service level agreements (SLAs) are the heart and soul of many outsourcing contracts. They define what the provider must deliver and their penalties for failure, in anything from application uptime to the time required to solve a customer’s problem on a help line.
But at least as currently defined, SLAs often fall short of detecting (and, more importantly, correcting) problems quickly. That was the message at the recent SIG Spring Summit from Senior Corporate Counsel Richard English of Ingram Micro and Shaalu Mehra of Sheppard Mullin Richter & Hampton, who helps the electronic distributor negotiate outsourcing deals.
No one wants for a relationship to fail but sometimes you have to quit on one that isn’t working. How do you know when to say, “When?”
Relationships are difficult. Band members have creative differences, teammates have ego problems and marriage partners have irreconcilable differences. Likewise, vendors and clients in business-to-business relationships experience all of the pains of band members, teammates and marriage partners. Maintaining a positive relationship is challenging when everything goes well but adding in technological differences, language barriers and time zone disparities has the effect of widening the gap between client and vendor.
Companies seeking to locate new outsourced or shared services centers to offshore or near shore locations typically focus their exploration on factors such as price, local government support and incentives, cultural affinity with the target market, unemployment rates, labor pool, language skills, etc. But are companies really taking the necessary time to explore, assess and discuss their own points of differentiation as they are perceived by the local population?
By Jon Tonti
Of the 8.2 million business services jobs held domestically at the beginning of 2002 in some 4,700 companies based in North America and Europe only 4.5 million will remain in their domestic markets by 2016 according to a study by The Hackett Group, a management consulting firm. The same study finds that the amount of business services work moving offshore will “level off significantly” during the next few years due to changes in the conditions of offshore drivers.