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GlobalizationToday
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The Official Magazine of the International Association of Outsourcing Professionals
GlobalizationToday March 2012
Commerce Redefined
Our Coverage of the 2012 Outsourcing World Summit Record turnout for the 15th annual event with nearly 800 delegates attending from 38 countries. Page 14
Also in this issue: IAOP Stars Shine
By Sandy Frinton Page 20
Delivering Innovation in Outsourcing By Mary Lacity and Joseph Rottman Page 24
Does IT have the talent to succeed?
By Zachary Misko Page 32
Agile: The Next Step
By Jim Highsmith Page 36
Global Sourcing & Tryst With Growth By Bobby Varanasi Page 38
‘Chartered status is a great way to demonstrate the quality of our consultants’ Andrew Reid, Consulting Services Director, Microsoft
Set the benchmark of success in your organisation CITP is the benchmark of IT excellence, awarded to IT professionals who have the knowledge and expertise to deliver exceptional IT – the kind that achieves business goals. Discover the benefits of CITP for you and your organisation.
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© BCS, The Chartered Institute for IT, is the business name of The British Computer Society (Registered charity no. 292786) 2012
INSIDE March 2012
7 PUBLISHER’S NOTE 8 NEWS FEED What’s new and noteworthy in global commerce.
32 DOES IT HAVE THE TALENT TO SUCCEED? By Zachary Misko, Kelly OCG
IT is being asked to manage dynamic and tech-savvy business clients, complex vendor relationships, technology innovation, demands to manage IT as a service business, and the need to rapidly transform itself and the business along the way. But does it have the talent to make all this happen?
14
ALL GROWN UP
The maturity of the industry could be seen in the record turnout for the 15th annual event with nearly 900 delegates attending from 38 countries. By Sandy Frinton
36 AGILE: THE NEXT STEP By Jim Highsmith
Ten years of agile methods for software development have had an extremely positive impact on the IT industry. With this in mind Jim Highsmith, ThoughtWorks, looks back at those 10 years and looks ahead to the agile movement’s teenage years
38 GLOBAL SOURCING & TRYST WITH GROWTH By Bobby Varanasi, COP
Economics is given short-shrift on the one end, while the very same economic growth is touted as the reason for putting money and muscle behind the sourcing industry and larger ICT sector. Do you not find this counterintuitive? \
20
IAOP STARS SHINE
22
DELIVERING INNOVATION IN OUTSOURCING
43 IAOP WORLD CONNECTION 50 SCRAPBOOK
At the Summit, we surveyed 202 delegates Hall of Fam me in nductees, Global Excellence in Outsourcing awards to understand how their organizations define and deliver innovations an nd Memb bers of the Year
www.globalizationtoday.com
3
SAVE THE DATE! Outsourcing in Latin America: Trends, Challenges and Opportunities IAOP’s second annual Latin America Outsourcing Summit , taking place October 2-3 in Sao Paulo, Brazil, brings together IAOP’s global community and leaders from across the Latin American business community to examine and leverage the growth taking place in the region.
Companies are increasingly looking to use outsourcing more strategically as a tool to yield significant cost savings, improve efficiency and drive growth. The Summit will feature the findings from IAOP‘s extensive research on the state of the Latin American outsourcing industry and focus on future trends, overcoming challenges and maximizing opportunities.
The Summit, being produced by IAOP and BRASSCOM with the support of Fortune
ITsqc
magazine, will feature top-notch keynote sessions, in-depth educational breakouts, networking and social events and more.
For information on speaking, registering or sponsoring, visit www.IAOP.org or email info@iaop.org.
October 2-3, 2012 São Paulo, Brazil
PUBLISHER’S NOTE
Publisher’s Note The Outsourcing World Summit last month marked the 15th year anniversary of this great event. Though it was my third time at the Summit, there were many attendees who have been at all 15. It’s no brainer to understand why people attend it year after year. This year again proved why this event is truly an amazing opportunity to get together with other outsourcing professionals from both sides of the table, get up to speed on the latest developments, and get real knowledge you can put to work right away. For those who couldn’t make to the summit, we covered the highlights to give you a bit of a feel for what happened. But there’s nothing like actually attending one. We hope you will make it to the 2013 Outsourcing World Summit, Feb. 18-23, at Marriot Desert Ridge in Phoenix, Arizona. (By the way, I am not confirming or denying that I influenced the decision to hold the event about five minutes away from my home.) And here are the stories in this issue…
Ali Comelek
Founder and Publisher
First story is coming directly from our own Sandy Frinton. She covered the event in and out. You can find a summary of main sessions on Page 14. This year the maturity of the industry could be seen both in the results of the annual member survey as well as the record turnout for the 15th annual event with nearly 800 delegates attending from 38 countries. Next, we look at the findings from the 2012 Outsourcing World Summit Survey. Mary Lacity and Joseph Rottman surveyed 202 delegates to understand how their organizations define, identify and deliver innovations in their outsourcing relationships. More on Page 24. As you know, IT departments are being asked to manage dynamic and tech-savvy business clients, complex vendor relationships, technology innovation, demands to manage IT as a service business, and the need to rapidly transform itself and the business along the way. But does IT have the talent to make all this happen? To find out, read the story by Zachary Misko, KellyOCG, on Page 32. Enjoy the issue!
Founder and Publisher Globalization Today Magazine “Official Publication of IAOP” www.GlobalizationToday.com 1-602-492-4194
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PUBLISHER’S NOTE
Publisher’s Note The Outsourcing World Summit last month marked the 15th year anniversary of this great event. Though it was my third time at the Summit, there were many attendees who have been at all 15. It’s no brainer to understand why people attend it year after year. This year again proved why this event is truly an amazing opportunity to get together with other outsourcing professionals from both sides of the table, get up to speed on the latest developments, and get real knowledge you can put to work right away. For those who couldn’t make to the summit, we covered the highlights to give you a bit of a feel for what happened. But there’s nothing like actually attending one. We hope you will make it to the 2013 Outsourcing World Summit, Feb. 18-23, at Marriot Desert Ridge in Phoenix, Arizona. (By the way, I am not confirming or denying that I influenced the decision to hold the event about five minutes away from my home.) And here are the stories in this issue…
Ali Comelek Founder and Publisher
First story is coming directly from our own Sandy Frinton. She covered the event in and out. You can find a summary of main sessions on Page 14. This year the maturity of the industry could be seen both in the results of the annual member survey as well as the record turnout for the 15th annual event with nearly 900 delegates attending from 38 countries. Next, we look at the findings from the 2012 Outsourcing World Summit Survey. Mary Lacity and Joseph Rottman surveyed 202 delegates to understand how their organizations define, identify and deliver innovations in their outsourcing relationships. More on Page 24. As you know, IT departments are being asked to manage dynamic and tech-savvy business clients, complex vendor relationships, technology innovation, demands to manage IT as a service business, and the need to rapidly transform itself and the business along the way. But does IT have the talent to make all this happen? To find out, read the story by Zachary Misko, KellyOCG, on Page 32. Enjoy the issue!
Founder and Publisher Globalization Today Magazine “Official Publication of IAOP” www.GlobalizationToday.com 1-602-492-4194
www.globalizationtoday.com
7
NEWS FEED
NEWS Feed WHAT YOU NEED TO KNOW IN THE WORLD OF OUTSOURCING
OBAMA PROFFERS TAX ON FOREX EARNINGS TO DISCOURAGE OUTSOURCING www.globalservicesmedia.com
Stepping up his campaign against outsourcing, President Barack Obama said America, which lost 8 million jobs during the recession, needs to to establish a new minimum tax on foreign earnings to discourage large US firms from shipping jobs to countries like India. “No company should get a tax break for outsourcing jobs. Instead, tax breaks should go to manufacturers who set up shop here at home. Bigger tax breaks should go to high-tech manufacturers who create the jobs of the future,� Obama said. According to one of the leading media house, “Yesterday’s release of the White House “Business Tax Reform� marks a watershed in the corporate tax debate. Now nearly everyone acknowledges that U.S. corporate tax rates hurt American companies. The headline that President Obama wants voters to see is his new top statutory rate of 28%. If only the story ended there . . .Alas, his reform is stuffed with 8
Today March 2012
so many offsetting business tax increases that the overall impact of this and other proposals would make the U.S. tax system less globally competitive and raise
effective tax rates above what they are today.� The plan underscores Obama’s interest in spurring “insourcing,� or the return of previously outsourced jobs.
NEWS FEED
US CLOUD COMPUTING REPORT SLAMS BRAZIL, INDIA, CHINA www.economictimes.com
A US software industry report chided Brazil, China and India for policies it said threatened the future of cloud computing, but also took aim at developed countries such as Germany that did well on its inaugural scorecard. The Business Software Alliance, which represents US industry heavyweights such as Microsoft Corp, said Brazil finished last in its survey of 24 countries, earning only 35.1 points out a possible 100 because of its policies in areas such free trade, security, data privacy and cybercrime. India, which has the world’s second-largest software industry after the United States, and China, whose information and communications technology sector is expected to nearly double to $389 billion by 2015, also was in the bottom six, with scores of 50.0 and 47.5, respectively. Cloud computing refers to providing software, storage, computing power and other services to customers from remote data centers over the Web. Demand for cloud-based software is rising rapidly because the approach allows companies to start using new programs faster and at lower cost than traditional products that are installed at a customer’s own data center. A major purpose of the report is to rally the international “technology community around the need for greater harmonization of laws
so a truly global cloud can come about,” said Robert Holleyman, president of the US software group. Without greater coordination of government policies, “the cloud could be chopped into little pieces,” reducing the efficiency that comes from being able to move data and software services freely across borders, Holleyman said. The 24 countries included in the survey represent 80 percent of the global information and communications technology industry. They were scored in seven areas, which also included intellectual property protection, infrastructure and support for industry-led standards to promote smooth data flows. Japan was ranked highest with 83.3 points. It was followed closely by other developed countries including Australia, Germany, the United States, France, Italy, the United Kingdom and South Korea, which all scored in the high 70s. While
the report showed a “sharp divide between advanced economies and the developing world, even some of the high-ranking countries are walling themselves in with conflicting laws and regulations,” Holleyman said. European Union countries scored well, but “what’s happening now in the EU is lawmakers and regulators are effectively putting their thumbs on the scale in ways that will make it difficult for non-European firms to compete,” he said. “There are concerns that Germany, for example, wants to put a wall around the country to limit the provision of cloud services to companies that are located in Germany.” Strong laws to protect privacy are important to give users confidence “that private information stored in the cloud, wherever in the world, will not be used or disclosed by the cloud provider in unexpected ways, the report said. www.globalizationtoday.com
9
NEWS FEED
SINGLE VENDOR TO MANAGE RELIANCE COMMUNICATIONS SERVICES FOR $3B www.business-standard.com
In what would be one of the largest managed service outsourcing deals in telecom, Reliance Communications (RCom) has shortlisted top vendors Ericsson, Alcatel-Lucent, Huawei Technologies and ZTE for a $3-billion five-year contract. Unlike other players, such as Airtel or Vodafone, who use multi-party vendors for managed services, RCom has decided to give the contract worth nearly Rs 15,000 crore to a single vendor. The deal would entail outsourcing end-to-end management services, including operational planning of the network (which most companies keep with themselves), management and maintenance of GSM, CDMA and wireline networks, fibre, utilities, internet protocol and field assurance (quality control). Only IT services and customer services will be kept out of the contract. Decisions on new roll-outs will remain in-house. The contract is expected to be finalised within four-five weeks. Those in the know say the deal could entail the transfer of a substantial part of the 15,000 employees on RCom rolls to the vendor that wins the contract. Discussions are said to be on to fix the number. An RCom spokesperson declined to comment on the issue. Alcatel, Huawei and Ericsson declined to comment or did not reply to queries. 10
Today March 2012
Currently, RCom has a 50:50 joint venture (JV) with AlcatelLucent, announced in 2008 for managed services. Apart from RCom, the company was meant to cater to other operators across the world. However, the domain for which the four vendors have been shortlisted would be much larger and the Alcatel-Lucent JV would be just one of the contenders. RCom will pull out of its AlcatelLucent JV if it is not selected for the new deal. RCom has decided not to go for a JV model with the selected outsourcing partner. The integrated outsourcing contract will help RCom reduce its cost 15-20 per cent, experts say. Discussions are on with
the shortlisted vendors to provide site-wise (tower-wise) network performance rather than the current overall network performance parameters. That should improve quality standards. The managed services model was pioneered in India by Bharti Airtel, which signed long-term contracts with Ericsson, Nokia Siemens Network and Huawei for 2G and 3G services. Bharti also has an outsourcing deal with IBM for comprehensive IT solutions for a few years. Vodafone India has two vendors, Ericsson and Nokia Siemens Networks, with which it has long-term managed service contracts.
2012 OUTSOURCING WORLD SUMMIT
All Grown By Sandy Frinton
Up
Outsourcing Demonstrates its Maturity As one of the industry’s “founding fathers” Dalal has seen it grow up and been a part of shaping this industry. Presenting the opening keynote address titled “Outsourcing: Coming of Age,” he summoned back to milestone global deals that gave birth to outsourcing: Kodak and IBM (ISSC) in 1989; BP Amoco and Accenture (Andersen Consulting) two years later; and the $3.4 billion, 20 country Xerox / EDS contract in 1994. “The growth of the outsourcing industry over the past 25 years has been phenomenal,” he said. “Outsourcing is now a mature industry, which means it’s more readily accepted as a general business principle versus there being reluctance by top leadership to engage in outsourcing.” The maturity of the industry could be seen both in the results of the annual member survey that Dalal presented as well as the record turnout for the 15th annual event with nearly 800 delegates 14
GlobalizationToday March 2012
attending from 38 countries. According to the survey, 70 percent of customers said they plan to either increase or maintain their current outsourcing volume despite the past year’s economic conditions, the same rate as last year. More than 55 percent of customers want to use outsourcing to increase flexibility and help meet corporate business plans, while nearly 50 percent expect short and long-term cost savings from outsourcing. Average revenue for outsourcing providers listed in the 2012 Global Outsourcing 100, also released today at the conference, was $1.6 billion, with a growth rate of 6 percent versus 13 percent in 2008. While the industry growth continues, current economic factors will determine its future. These key factors include: • The same number of employees — 17,400 employees — were engaged in providing outsourcing services in 2012 as 2008, even
Jag Dalal, COP, Managing Director, Thought Leaders discusses The State of the Industry. Panelists Include Scott Singer, CPO, Rio Tinto
though revenues have declined, indicating profit pressure. • The wage gap between China and U.S. manufacturing is expected to close in five years, according to the Boston Consulting Group. This will potentially impact the service levels requirements and locations for outsourcing. “Economic factors at work – such as the wage gap closing and
NEWS FEED
FIRSTSOURCE SOLUTIONS PARTNERS WITH RURALSHORES TO STRENGTHEN RURAL BPO SERVICES www.globalservicesmedia.com
Firstsource announced its partnership with RuralShores in establishing a 135 seat delivery center in Chand, a village in Chhindwara District in Madhya Pradesh. The alliance aims at taking BPO work to rural India. Firstsource and RuralShores have joined hands to set-up this rural office to empower the Indian youth and created employment opportunities. Chand is a village located 27 kilometers away from Chhindwara district in Madhya Pradesh; all employees arrive from villages within a radius of 10 kilometers from Chand. The RuralShores Chand center is completely equipped with IT infrastructure and meets the standards and regulatory requirements. The center will attempt to bring global-style outsourcing services, while exposing this rural area to global business practices. RuralShores currently has 135 seats in the Chand center scaling up to 250 by May, 2012. With the help of Firstsource, more than 175 individuals are operating out of its delivery center. Through this partnership, the two companies are primarily servicing customers in regional languages. “Rural India holds a lot of potential and talent waiting to
be tapped. With our partnership with RuralShores, we are positive that we can provide great opportunities to the youth without having to move away from their village. However, more importantly, rural BPOs compliment our focus to penetrate the Indian market,” said Mr. Shalabh Jain, Executive Vice President, Asia Business Unit, Firstsource Solutions. Also speaking on the occasion, Mr. Murali Vullaganti, CEO, RuralShores says, “We are happy to be associated with a leading service provider like Firstsource
to help address the cause of youth empowerment in India. I am certain that we have a great potential for more ventures in a market with a growing landscape like rural India.” Nasscom says IT-BPO firms plan to increase the total rural BPO employee base by more than 10 times over the next three years. Rural BPOs are now compelling business ventures for outsourcing companies due to various factors like availability of talent, really low attrition rates, affordable real estate, low labour and operational costs.
www.globalizationtoday.com
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OUTSOURCING CLIENTS FACE TOUGH CHOICE: WHITE BOX OR BLACK BOX? by Dan Berthiaume
Most IT outsourcing and BPO relationships boil down to one of two models: staff augmentation or managed services. “Staff augmentation is where the client defines a specific skill and pays the provider based on the number of hours and days successfully worked,” explains Dave Borowski, senior associate of outsourcing advisory firm Pace Harmon. “There are service levels, but you still pay by the number of hours and bodies.” And while staff augmentation is currently more popular with clients, particularly in the case of BPO, there is a shift toward more adoption of the managed services approach. According to Borowski, the differences between the two models tend to be more clearly defined in ITO relationships. “In ITO, it’s the difference between dedicated and leveraged resources, or results based and efforts based compensation,” he says. “With staff augmentation, there is a specific scope of work and labor hours that are deliverable as output, with an acceptance of client processes. In managed services, there are a number of applications to be managed and you are paid by the number of applications.” “White Box” and “Black Box” In contrast, most BPO deals feature a combination of what are commonly known as the “white box” model where services offer complete visibility (hence the name) and are defined by how the vendor performs the work, or “black box” services which offer less visibility and are defined by results of the work rather than how it is performed. However, Borowski says most current BPO deals lean closer to the white box model. “The client defines a specific skill and pays the provider based on the number of hours and days successfully worked,” says Borowski. “There are service levels, but you still pay by the number of hours and bodies.” In contrast, Borowski defines black box outsourcing as “true managed services,” where there is a convergence of the fee structure and how success is measured. “BPO vendors want to get more into true managed services,” says Borowski. “They want the client to tell them not how to do things but what needs to be done.” A “natural reluctance” on the part of many companies to rely on a set of standardized processes is a key inhibitor to larger growth of this type of outsourcing, Borowski says. “A lot of companies think their processes are so specific, technology is so complex and data is so sensitive that they are reluctant [to use managed services],” he says, adding that many clients are also hesitant to give outsourcing vendors the kind of access to their internal systems and processes, which is
needed for a successful managed services program. Different Models for Different Functions Depending on the specific function being outsourced, it may work better with the black box or white box outsourcing model. Borowski illustrates the difference using accounts payable (AP) and customerfacing services as examples. “For accounts payable, you would generally pay a vendor based on successful transactions where the right amount of money is paid to the right recipient at the right time,” says Borowski. “You wouldn’t really care if the vendor reused shared services or whether they used your ERP system or a different platform. You’re not paying by the hours but by the results.” Thus, Borowski says AP and many of the other more mature outsourced processes that feature consistent and predictable data are better suited to “black box” outsourcing. However, some processes, such as collection and customer service, are very specific to the culture of an individual company and how it interfaces with its customer base, and are better suited to “white box” outsourcing. “A dedicated (outsourced) organization that embodies the philosophies and interactions of a specific company, where you have dedicated resources that live and breathe them day to day, is better suited for these type of processes,” says Borowski. A Managed Future? While Borowski hardly predicts the demise of “white box” BPO, he does expect that as time goes on, there will be gradual industry shift to more “black box” BPO services, led by small-to-mid-sized clients. “Small-to-mid-sized companies who don’t have a significant investment in proprietary ERP systems are generally more willing to standardize processes [through managed services outsourcing],” he says. “They are more receptive to a lower cost, pay-as-you-go model and less likely to believe their processes and systems are so unique and novel that managed services won’t work.” Borowski also says that as a company gains more experience buying services, it generally becomes more receptive to the managed services model. “If you are new to outsourcing, you haven’t gone through the process yet and the vendor hasn’t built up the trust and reliability yet,” he says. “In a more mature outsourcing relationship, you realize that the provider is pretty good at segmenting work and innovating and renovating processes for an optimal outcome. By looking across their clients, managed services providers can find innovative methods and technologies to create a positive benefit.”
www.globalizationtoday.com
13
2012 OUTSOURCING WORLD SUMMIT
All Grown By Sandy Frinton
Up
Outsourcing Demonstrates its Matturity As one of the industry’s “founding fathers� Dalal has seen it grow up and been a part of shaping this industry. Presenting the opening keynote address titled “Outsourcing: Coming of Age,� he summoned back to milestone global deals that gave birth to outsourcing: Kodak and IBM (ISSC) in 1989; BP Amoco and Accenture (Andersen Consulting) two years later; and the $3.4 billion, 20 country Xerox / EDS contract in 1994. “The growth of the outsourcing industry over the past 25 years has been phenomenal,� he said. “Outsourcing is now a mature industry, which means it’s more readily accepted as a general business principle versus there being reluctance by top leadership to engage in outsourcing.� The maturity of the industry could be seen both in the results of the annual member survey that Dalal presented as well as the record turnout for the 15th annual event with nearly 900 delegates 14
Today March 2012
attending from 38 countries. According to the survey, 70 percent of customers said they plan to either increase or maintain their current outsourcing volume despite the past year’s economic conditions, the same rate as last year. More than 55 percent of customers want to use outsourcing to increase flexibility and help meet corporate business plans, while nearly 50 percent expect short and long-term cost savings from outsourcing. Average revenue for outsourcing providers listed in the 2012 Global Outsourcing 100, also released today at the conference, was $1.6 billion, with a growth rate of 6 percent versus 13 percent in 2008. While the industry growth continues, current economic factors will determine its future. These key factors include: t The same number of employees — 17,400 employees — were engaged in providing outsourcing services in 2012 as 2008, even
Jag Dalal, COP, Managing Director, Thought Leaders discusses The State of the Industry. Panelists Include Scott Singer, CPO, Rio Tinto
though revenues have declined, indicating profit pressure. t The wage gap between China and U.S. manufacturing is expected to close in five years, according to the Boston Consulting Group. This will potentially impact the service levels requirements and locations for outsourcing. “Economic factors at work – such as the wage gap closing and
2012 OUTSOURCING WORLD SUMMIT
ship, IAOP, joined by a panel of executives e: Swaminatha Dandapani, CEO, InfosysBPO;
revenues decreasing – can slow the growth of the industry as a whole,” he said.
computing as a platform to deliver outsourcing services is still mixed. Almost one-third of customers said they have no plans for cloud-based service acquisition – almost the same number as in 2010. Meanwhile, 80 percent of providers indicated that they either offer or are considering offering cloudbased services. t Both customers and providers are not concerned or see an impact of political rhetoric around outsourcing, and customer’s view of “corporate social responsibility” was largely
unchanged. t Overall, the number and characteristics of outsourcing professionals remain unchanged. However, more companies indicate they have a higher number of employees involved in outsourcing.
Other results from the survey conducted with the support of Accenture include: t The future of cloud-based
,” e g a g n i k n i dr alal. e h t d ip Jag D e h c a e Leadersh r y l l a fin ght
s of Thou a h g n r i o c t r c e u r i o “Outs jokes IAOP’s D
www.globalizationtoday.com
15
Q: HOW HEALTHY ARE YOUR OUTSOURCING RELATIONSHIIPS?
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A. VALUE HEALTH CHECK SURVEY™ Powered by Enlighta
The Value Health Check SurveyTM (VHCSTM) is a web-based diagnostic tool designed to assist outsourcing customers and service providers in optimizing the health and value in their existing outsourcing and/or shared service center relationships. The VHCS is the key enabler of the Outsourcing Relationship Health Check ProcessTM that provides outsourcing customers and service providers with rapid insights into key strengths and opportunities for improving (OFI) business value in their relationships. The VHCS tool collects data across the five key areas of value in outsourcing relationships as represented in the Sourcing Relationship Value Framework. Important contract and relationship demographic information is captured enabling customers and service providers to understand how their relationships perform relative to various peer groups across the global outsourcing industry. Additional analytics can be performed against VHCS data providing rich insights to the key contributors to healthy, high performing and sustainable relationships. IAOP Corporate Members receive 2 complimentary surveys. To schedule a relationship health check-up or learn more, contact Matt Shocklee at matt.shocklee@iaop.org.
www.IAOP.org
2012 OUTSOURCING WORLD SUMMIT
Keynote speaker, Peter Sheahan brought enthusiasm to the room on day one of The Outsourcing World Summit.
Summit Highlights Following Dalal and a lively panel discussion on the implications for outsourcing’s coming of age, Peter Sheahan, Founder and CEO of ChangeLabs, energized the delegates and turned their thinking upside down. “Innovation doesn’t have to be sexy,” he told the attendees. “Rethink what you already have and how you are doing it.” Also a crowd pleaser that got people engaged was a panel on “CSR Risks and Rewards.” “Management must be concerned with having responsibility,” said Bill Hefley, Ph.D. CDP, COP, Clinical Associate Professor, University of Pittsburgh and Director, ITSqc. Panelist Rita Soni, CEO at NASSCOM Foundation, noted that “Corporate Social Responsibility across India is focused on philanthropy and volunteerism.” While Dalal shared his thought leadership from attending all
15 of the Outsourcing World Summits, newcomers continue to breathe new life into the industry as it enters its next stage of development. First time attendee Kevin Nolan, senior director of marketing at Aegis Communications, found the event valuable personally and professionally. “My first IAOP summit presented many opportunities to learn from experts, trade tips and experience with peers from around the world, and understand how other companies approach many of the same issues that face us each day,” he says.
Mark your Calendars IAOP announced the dates for its next summits: The 2012 Latin America Outsourcing Summit, Oct. 2-3, at the Renaissance Sao Paulo Hotel in Sao Paulo, Brazil;
and The 2013 Outsourcing World Summit, Feb. 18-20, JW Marriott Phoenix Desert Ridge, Phoenix, Arizona.
Sandy Frinton IAOP Sandy Frinto San on is a staff writter aatt IA IAOP OP.. She e iss an exxperience ed PR and media spe eciaaliist with st stron ng journalism and d writin ng baackgrround,, wi with th a com mbin natio ion n of nearlly 20 0 yyears of PR and d jou urn naliism experrie encce. Sandyy haas writte en bylined ne news and d feaatu ure es stories ess, traditio onal and d Web b 2.0 0 prresss re elle eases, employee comm mun niccatio ion ns, e-ne ewsletters, corpo orate e lettters fro om CEO Os, s annuall reportts an nd othe her com mmu unicat atio at ions io ns iin a wi w de range ge e off business ss sec ecto tors. Sh he a so hass man al naged ed d commu mu uni n ca c tion on ns an nd mediia relaati t ons fo f r international bussine nesses for major acq ne cquisitions,, plantt pl closur urres e and busiiness rest struct ctur urrin u ings in th the e U.S. S aand nd glo globa balllly. y y. Y u ca Yo can re reac acch her att: sandy.frinto ton@iaop.com
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AD
AD
2012 OUTSOURCING WORLD SUMMIT
IAOP Stars Shine Disney has its magic but IAOP has stars of its own With the fanfare deserving of the very best, outsourcing professionals joined to toast individuals, employee teams and members at the gala 2012 Awards Luncheon at the Outsourcing World Summit, held this year at Disney’s Contemporary Resort. The association recognized the newest inductees into its Outsourcing Hall of Fame, presented Global Excellence in Outsourcing (GEO) awards and honored its Members of the Year. Recognized at the event were: t Hall of Fame — Wendell O. Jones, Ph.D., chief executive of the Society for Information Management for his work as an outsourcing advisor, and Thomas Meador, president and CEO of Michigan Avenue Real Estate Group, who spent a decade at American Express as an outsourcing customer. 20
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t GEO — Procter & Gamble’s Global Business Services’ Strategic Alliances team for Best Practices, and Cisco’s Global Finance Operations in the innovation category. t Members of the Year — Eric Rongley, CEO of Bleum; Mary Lacity, Professor of Information, College of Business, University of Missouri; and Rene Herlaar, COP, Head of Network, Technology Networks, Vodafone, The Netherlands, for their contributions to the association and its members. “All of these leaders have helped to advance outsourcing by their contributions to their organizations, the industry and our association,� says IAOP CEO Debi Hamill. “We salute them for raising the bar for each of us, and making outsourcing as strong as it is today.�
2012 OUTSOURCING WORLD SUMMIT HALL OF FAME
Established by IAOP in 2006, The Hall of Fame continues to grow globally and now has 20-plus members in its ranks. The Hall of Fame is unique in that it recognizes individuals not only for their contributions to the management practice and industry of outsourcing, but just as importantly for their contributions to society at-large through outsourcing. Jones was recognized as an outsourcing pioneer who has continuously contributed to the body of knowledge for more than 20 years. He led the evaluation and implementation of one of the earliest and largest outsourcing agreements, a $3 billion McDonnell Douglas contract with IBM, in 1991. Jones has served as a Senior Vice President at National Association of Securities Dealers, with the Council on Competitiveness and the Task Force on U.S. Workers and Technology. He also worked at Digital Equipment Corporation and Compaq (now HP) as the vice president responsible for global delivery of outsourcing services. He has co-authored an IT outsourcing book and presented globally on the topic.
Meador was honored for his work in outsourcing at American Express in the mid-1990s. Meador led a major global outsourcing initiative to transfer global real estate operations to real estate service provider, the Trammell Crow Company, now part of CB Richard Ellis, while the company maintained strategic functions. He also led the reengineering of the procurement organization using some targeted outsourcing. GEO WINNERS
IAOP started the award program in 2011 to distinguish outsourcing professional teams at customer organizations who have advanced the field’s best practices, created innovative solutions and delivered great results for their companies. P&G’s Global Business Services’ Strategic Alliances team was honored for creating a simplified, standardized, systemic approach for each stage in the outsourcing lifecycle, from strategy and sourcing to ongoing governance and renewing or ending relationships.
Bill Hall, Chair of the Membership Committee, Rob Fulnecky, Cisco, Debi Hamill, IAOP, Mike Ward, Cisco and Bill Metz, P&G – GEO Award Winners
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2012 OUTSOURCING WORLD SUMMIT
Debi Hamill, CEO, IAOP; John Maher, Chair of IAOP’s Advocacy & Outreach Committee; Mary Lacity – accepting on behalf of recipient Wendell
The team harnessed its accumulated knowledge and experience and combined it with the latest industry best practices to develop the process that is holistic, multi-functional and used across its largest and most critical relationships. The major initiative aligned on common processes more than 300 governance resources spread about 16 large and complex relationships, and developed and deployed solutions to support them. As a result, P&G has both improved the efficiency and effectiveness of its outsourcing relationships and reduced the risks associated with the use of third party providers to deliver services. The team also broke new grounds in several areas that lacked standard solutions, including joint business planning, performance visualization and innovation portfolio management. 22
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Team members are: Bill Metz, Strategic Alliances Program Manager; Richard Heep, Global Business Development Outsourcing COE Manager; Paola Loaiza, Purchases Group Manager; Ralph Vanengelen, Section Manager, IT Development & Operations Commercial Governance; Charles Sy, Supplier Relationship Manager; Terry Hickman, Specialist, Global Internal Audit Information Decision Solutions; Larry Bridge, Facilities & Real Estate Governance Manager and Julie deSylva, External Relations Manager. Cisco was recognized for creating an innovative Entity Support Model (ESM) that shifts Cisco’s approach to support of accounting, tax and statutory requirements from a country-based, local entity service model to a process-oriented, integrated global entity support model.
2012 OUTSOURCING WORLD SUMMIT
IAOP Members of the Year, Eric Rongley, Bleum; Mary Lacity, University of Missouri; Rene Herlaar, Vodafone Netherlands.
The model consists of an Accounting Services team focused on local business support, governance and compliance activities working in partnership with the Global Operations team responsible for operational delivery. With this change, Cisco centralized accounting processes and is moving toward providing best-inclass front line business engagement and optimized operational delivery. The model also enables Cisco to enter new markets faster, less expensively and with lower business risk. Members of the team are: Mike Ward, Senior Director, Finance Operations; Amy Kwan, Vice President, Finance Operations and Rob Fulnecky, Director, Finance Operations.
MEMBERS OF THE YEAR
Members from customer and provider organizations and academia were honored for their contributions. Rongley, a long-time corporate member of IAOP and chair of the Shanghai chapter, also heads the China Regional Advisory Board and has been instrumental in helping IAOP grow throughout China. Described by Hamill as a “great supporter of IAOP and our go-to expert on many topics,” Lacity is a frequent speaker at IAOP events, serves on IAOP’s research committee and is co-chair of the Midwest chapter. She also coordinates the Summit’s joint networking sessions. Herlaar heads the Northern Europe Regional Advisory Board, is co-chair of the newly launched Brussels chapter, works closely with IAOP to promote its certification programs throughout Europe and facilitates customer networking sessions at the Summit. www.globalizationtoday.com
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STABLE. CREDIBLE. VALUABLE. RECOGNIZABLE. AND NOW, EVEN MORE
KellyOCG has been named to The Global Outsourcing 100 . ®
The Global Outsourcing 100 is an annual ranking of the world’s best outsourcing service providers and advisors, compiled by The International Association of Outsourcing Professionals®. The list includes companies from around the world that provide the full spectrum of outsourcing services, and is an essential reference for companies seeking new and expanded relationships with the best companies in the industry.
®
THINK OUTSIDE.
DELIVERING CUSTOMIZED OUTSOURCING SOLUTIONS SINCE 1995 Let’s talk about value Your organization’s ability to remain competitive relies heavily upon your business outcomes. And that makes your workforce a very important asset. Now recognized as one of the world’s best outsourcing service providers, Kelly Outsourcing and Consulting Group (KellyOCG) is backed by the resources of Kelly Services®, a leading global workforce solutions provider. Our expertise addresses your workforce needs beyond staffing to optimize your talent supply chain, giving you greater access to today’s top talent and mitigating your risk. Let us be a consultative partner that makes your workforce a most valuable—and strategic—asset. t $POUJOHFOU 8PSLGPSDF 0VUTPVSDJOH t 3FDSVJUNFOU 1SPDFTT 0VUTPVSDJOH t #VTJOFTT 1SPDFTT 0VUTPVSDJOH For more information, visit kellyocg.com today.
kellyocg.com All trademarks are property of their respective owners. An Equal Opportunity Employer © 2012 Kelly Services, Inc. X0359C
2012 OUTSOURCING WORLD SUMMIT
Delivering Innovation in Outsourcing: By Mary Lacity and Joseph Rottman
Findings g from the 2012 IAOP World Summit Survey At the 2012 IAOP Outsourcing World Summit, we surveyed 202 delegates to understand how their organizations define, identify and deliver innovations in their outsourcing relationships. Across the sample of 85 customers, 90 providers, and 27 advisors, the three communities mostly agreed with each other as to the best ways to design and delivery innovations. Only a minority of customers claimed there was no innovation delivered in their outsourcing relationships. Eighty-nine percent of respondents pointed to a specific innovation delivered in their deals, which mostly comprised innovations in tools, technologies, and processes. The main issue that arose from the survey is what we call the gain-share gap. While nearly 80% of respondents claimed gainsharing was the best mechanism to incent innovation, less than half actually use any type of gain-sharing method. Overall, the survey provides considerable evidence that outsourcing delivers 26
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innovation. DEFINING INNOVATION
What is meant by the term “innovation�? Academics define innovation as an idea, practice, or object that is perceived as new by an individual or organization. This definition acknowledges that innovation often means different things to different people. With this insight in mind, we asked customers, providers, and advisors how they define innovation to see if there were perceptual differences. The top ranked definition by customers (53%), providers (61%),
2012 OUTSOURCING WORLD SUMMIT
and advisors (48%) was something that improves the customer’s services or costs, regardless of its novelty. Thus, the three communities agree that innovation is best defined as anything that improves the customer’s performance. None of the communities thought that innovation was best defined as something completely novel. We also asked providers, “When customers speak to you about innovation, what are they primarily talking about?” Providers correctly identified that customers think of innovation as something that
improves the customer’s performance. But when customers were asked what providers mean by innovation, customers indicated that they think providers primarily define innovation as practices, tools, or technologies that are new to a particular client. So customers think providers define innovations as inputs (i.e., resources) rather than outputs (i.e., effects on customer performance). Providers may need to communicate better with clients when proposing innovations by focusing on how practices, tools, or technologies will result in better customer performance. www.globalizationtoday.com
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2012 OUTSOURCING WORLD SUMMIT
DESIGNING INNOVATION INTO THE DEAL
“Creativity is thinking up new things. Innovation is doing new things.� — Theodore Levitt We asked respondents about the best practices for designing innovation into the contract. Respondents could tick multiple options from a choice of innovation funds, invest days, special governance for innovation, or gain-sharing on innovation benefits. By far, across all three communities, gain-sharing was identified as the best way to design innovation into the deal. Specifically, 79% of customers, 77% of providers, and 78% of advisors indicated that gainsharing on innovation benefits was the best way to contract for innovation. Despite this being the top ranked response, a follow-up question to all three communities indicated that only 48% of innovations actually used a gain-sharing mechanism. According to the subset of customer responses, only 40% of innovations delivered used gain-sharing. Thus, we identified a gain-sharing gap. Our current research may help to explain the discrepancy. Although gain-sharing has been identified as a best practice for aligning clientprovider objectives, we found that the mechanism was fraught with challenges. In many instances, measuring baseline performance proved to be a significant obstacle, resulting in the parties abandoning the notion of gain-sharing even though it was designed into the deal. Another big challenge with gain-sharing was figuring out the actual benefits to share fairly as gains. In real business contexts we studied, many transformation projects happened simultaneously and exogenous factors affected performance outcomes. The partners could not isolate the effects of a single innovation project. In several companies we have studied, parties have significant conflicts over allocating gain-sharing benefits (in the circumstance of successful projects) or painsharing losses (in the circumstance of failed projects). 28
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Despite these challenges, we have studied companies that use gain-sharing to great effect and over 95% of this IAOP survey respondents said that when gainsharing was used, both clients and providers were satisfied with the gain-sharing mechanism. Besides gain-sharing, 60% of customers indicated that innovation requires special governance outside the normal governance committees, but only 42% of providers thought so. Innovation funds were recommended by 38% of customers, 30% of providers, and 33% of advisors. These lower percentages may be due to the fact that such funds are often too puny to excite and motivate parties. Several writein responses specified that benchmarking clauses, business metrics rather than process metrics, and
2012 OUTSOURCING WORLD SUMMIT
DELIVERING INNOVATION
“Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats.” — Howard Aiken We asked each community to describe an innovation in an outsourcing relationship that particularly impressed them. In total, we gathered data on 180 innovations. The contexts for innovation were ITO (47%), FAO (13%), SCM (7%), and HRO (5%). The remaining 14% were in the write-in category, which included multiple examples from engineering, call centers, customer services, and other BPO contexts. Respondents were asked to identify the stakeholder responsible for the innovation idea (see Table 1). Across all communities, the most frequently identified sources of the idea for the innovation were joint provider/client (37%) or the provider (35%). In looking only at the customer respondents, customers indicated that providers more frequently identify innovations than clients. penalty clauses for not innovating were also helpful. One option missing from the survey was built-in service level and productivity improvement clauses. In practice, many companies require providers to improve performance by a few percentage points each year. Given that all communities define innovation as “anything that improves the customer’s performance”, these clauses would count towards designing innovation into the deal.
Table 1: Who had the idea for the innovation? Provider’s Idea
Client’s Idea
Advisor’s Idea
Joint Provider/ Client Idea
Customer Respondent
21
16
3
Provider Respondent
34
12
Advisor Respondent
8
Total
63 35%
Joint Advisor/ Client Idea
Total
21
4
65
1
37
2
86
2
4
7
6
27
30 17%
8 4%
65 37%
12 7%
178 100%
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2012 OUTSOURCING WORLD SUMMIT
Respondents were also asked to indicate who funded the innovation project. We mapped funding responses to the source of the idea responses (see Table 2) and found that in general, the stakeholder(s) who propose innovations, help fund innovations. People are only incented to pitch innovation ideas if they themselves would benefit and thus would are willing to finance the innovation project in whole or in part.
Table 2: Who funded the innovation?
Provider’s
Client’s Idea
Advisor’s Idea
Joint Provider/ Client Idea
Provider Funded
35
4
1
Client Funded
13
12
Jointly Funded
14
Total
Joint Advisor/ Client Idea
Total
16
3
59
3
5
2
35
14
4
39
7
78
62
30
8
60
12
172
36%
17%
5%
35%
7%
100%
SAMPLE INNOVATIONS
“Every day we were saying, ‘How can we keep this customer happy?’ ‘How can we get ahead in innovation?’ because if we don’t, somebody else will.� -- Bill Gates Respondents were invited to briefly describe a successfully implemented innovation. We coded the 85 responses into eight categories (see Figure 1). The most common type of innovation was a new tool or technology (35%), such as a new customer tracking tool, asset management tool, e-invoicing tool, optical character recognition tool, and migration to the cloud. New or improved processes (16%) were the second most common
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types of innovation. Respondents described new or improved processes to evaluate salesforce effectiveness, to assess asset value, and to train new workers, for example. Thirteen percent of the innovations were unique, so we categorized these as “other�. Examples included establishing a center of excellence and restructuring a back office. Automation was the fourth largest category, describing 12% of the innovations.
2012 OUTSOURCING WORLD SUMMIT
FIGURE 1: CATEGORIES OF INNOVATIONS (N = 85)
Many customers not only described the innovations but also wrote how the innovation improved performance, such as the example of a report delivery innovation that reduced turnaround time from 20 hours to 20 minutes. One customer described a workflow automation system that
reduced costs by 50%. Another respondent wrote about a paper clearinghouse solution the provider developed to allow electronic claims that previously could only be submitted via paper submission. The automation reduced costs and improved timeliness of claims submissions.
FINAL THOUGHTS
obstructionist, fearful, lazy, or unimaginative. One only has to recall Orwell’s 1984 to spot the fallacy in logic. Assessing innovations by their net benefits seems one way to avoid the trap of equating “new” with “better”. As a community, we are getting The 2012 IAOP survey found that innovation is best better at innovation, but we still need to work on conceptualized in terms of its effect on customer’s advancing innovation clauses and practices such as performance. This may indeed be better conception gain-sharing. The other over-arching message from than the academic definition that focuses on a new the survey is this: innovation in outsourcing is not idea, practice, or object. For new is not always better. automatic; innovation must be actively conceived, In the academic world, we have a construct called designed, funded, and delivered. The survey did not the “pro-innovation bias” , which assumes more and elicit data on implementation processes, but clearly sooner adoption of innovations are always desired innovation projects require aggressive change and users who “resist” innovations are viewed as management and client and provider leadership.
“Innovation! One cannot be forever innovating. I want to create classics.” -- Coco Chanel
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IT TALENT
Does IT have the talent to succeed? By Zachary Misko, Kelly OCG
IT is being asked to manage dynamic and tech-savvy business clients, complex vendor relationships, technology innovation, demands to manage IT as a service business, and the need to rapidly transform itself and the business along the way. But does it have the talent to make all this happen? There’s a growing realization among CIO’s that they don’t have the talent to achieve the expectations. CIO’s face a capability and talent problem. IT is being asked to do something different and the problem is that they lack the right talent to do it. CIO’s and some IT staff get how things have changed and they are responding. However, many staff don’t understand and appreciate how the dominant IT operating model has been shifted, in some cases by their own IT leadership. Most of IT is made up of technologists, people who think about technology and what technology can do. The problem is that IT is less about technology and more about the business context in which it’s delivered. In the last three to five years we’ve seen CIOs across industry and geographies adopt an operating model built on supply and demand. The operating model is built around managing IT demand via intimate business-customer relationships, and satisfying supply via consolidated IT systems and externalized back office work. CIOs are struggling to deliver using the model for a number of reasons. First, CIOs lack buy-in for the new model from 32
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their staff. CIO’s are encountering resistance to change from some of their staff that don’t understand the changes, don’t appreciate the need for change, and don’t want to change. In some cases, it’s a matter of better and clearer communications, but in other cases it’s a matter of IT staff not seeing a personal win for the staff. Second, we find that even many IT organizations that have realigned to supply -demand still have lingering structures built around technologies and technology skills (i.e. infrastructure, database, applications). Typical supply-demand structures are aligned to business units (sources of demand), customer solutions, and the supply chain that delivers them. A mix of old functional IT structures and supply-demand creates a degree of confusion and duplication. Third, CIO’s haven’t been able to create the new and necessary structures at the right level to support their transformational efforts. CIO’s generally lack fixed internal transformation and change consultant; program (not project) management; and dedicated financial, HR, and procurement talent. One CIO we talked to planned to cut their transformation resources at the end of the program, not a good idea because the need to transform doesn’t end. Fourth, most CIO’s haven’t sufficiently prepared their workforces to deliver on the new operating model with training and development. It’s as if the vision has changed, but the same fundamental ingredients are in place. One CIO embarked on www.globalizationtoday.com
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IT TALENT an ambitious training and development program at the start of their outsourcing program. They ran the training for the first 6 months but their attention waned. The outsourcing initiative struggled. Fifth, repurposing technical staff into roles as business partners and vendor managers hasn’t worked. The talent gap is a growing problem. PA’s 2011 CIO survey highlights a widening gap between CIO expectations and their workforce’s capabilities. The survey shows that managing strategic relationships with third-party suppliers has emerged as a key skill with 36% identifying it as an essential ability, up 12 % from last year. The new operating model places more emphasis on customer relationships and accordingly 40% of CIO’s identify customer service skills as essential in 2011, up from 33 % in 2010. Our survey shows a growing problem deliver it early. This goes beyond moving boxes on a chart, and past finding a good program manager for OUR RECOMMENDATION the transformation program. It means looking across All too often CIO’s instigate a major change (e.g. IT to evaluate the technical, management, business, introduce a new operating model, outsourcing, etc.) vendor, and customer skills. Consider, for example, and consider the question of talent and organization if your IT function has the financial capabilities, secondarily. We recommend that CIO’s do it the processes, and systems to do the budgeting, planning, other way around. Have the talent complete with the forecasting, analysis, reporting, invoicing, and requisite knowledge and skills in place before you recharges often needed in an IT as a service model or need it, so they are ready when you are. Realign the large scale outsourcing. Do you have the capabilities organization, get it working, and then outsource. This to define, communicate, and manage meaningful implies that CIO’s know what they need to sustain the service level commitments within the function and change before they start. between customers and vendors? Do you have the This approach has the added benefit of imbuing right customer relationship management skills and those key individuals with the change intent and vendor management skills? A talent audit will help institutional knowledge so important to success. uncover gaps. Putting the talented organization in place ahead of A talent audit will pinpoint existing gaps and time also means that you’ve got fewer moving parts, provide you with a talent strategy, complete with and the change is more manageable, sustainable, and succession plans, developments plans, hiring plans, successful. and a readiness for change assessment. Filling the gaps is a matter of developing talent and acquiring HOW TO MAKE IT HAPPEN the talent you don’t have, and blending it into the CIO’s considering transformations (e.g. shift to current organization. This talent audit has two supply demand or outsourcing) may begin with an additional benefits. First, it can also be useful for evaluation of internal talent to deliver on both the identifying service area candidates for outsourcing change and the future steady state. We recommend or transformation. The talent gaps will likely verify that CIO’s thoroughly consider what’s required in the your ideas of where change is needed. Second, the new operating model and build the organization to talent audit is good for assessing your readiness for 34
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IT TALENT
change. The talent review of management, business, and vendor capabilities will give you an idea of how prepared your organization is to manage change and what you are likely to need in order to get ready. All too often CIO’s put forth a vision and begin to execute a new model only to assess and supplement the talent afterward. A new operating model requires new skills, capabilities, mindsets, and – often – new people. If the talent is lacking we recommend getting it before you need it. Don’t make the mistake of thinking you can hire IT talent when you want it, or that with a little polish people who can’t do it today will be able to do it tomorrow. Specifically, when it comes to outsourcing efforts we recommend that CIOs turn those initiatives on their heads. Traditionally, outsourcing programs start with technical requirements, RFP’s, and vendor negotiations; and finish with organizational, people and transition topics. Instead, we recommend that CIO’s start with people, organization, and talent; and not end with it. Get the vendor management and multi-sourcing capabilities upfront. Hire experienced staff. Selectively retrain where you can. Get the supporting organizational structures right. Start with the vendor management office and key operational processes upfront because: 1. Your talent will introduce good practices and improvements around vendor management.
These good practices will deliver their own benefits without ever outsourcing. 2. Your talent will set the stage for a quicker, less painful outsourcing exercise. Experienced talent knows what to do during an outsourcing exercise because they have been there before. 3. You will need the talent anyway it goes, so why not have it early before somebody else gets it. Benefit from having the talent you need to execute on board early, and let them drive the initiative 4. Talent brought into the process early is better able to respond when managing the vendor down the road. They will understand the intent of the deal because they will see it unfold, and they provide the institutional memory through the life if the agreement. All too often we see CIO’s start the people side of the transformation long after they write technical requirements and engage vendors.
D. Zachary Misko Kelly OCG D. Zachary Misko, Vice President, Kelly Outsourcing & Consulting Group (KellyOCG), is global director of the Kelly Outsourcing and Consulting Group (KellyOCG). As global director, Misko works k wi w th Fortune 500 companies throughout the he world to o develop and implement processes that improve and d drive Human Resources and workforce so olutions. He is currently a member off th the e Society of Human Resource Managers (SHRM) and the National Association of Personnel Services (NAPS). He is a pastpresident of the metro Milwaukee SHRM chapter. He is certified and is considered an industry expert in applying “Lean Methodologies” in the HR/talent acquisition process. Zachary is a Senior Executive Board Member of Best Practice Institute (BPI) and serves on the Advisory Board for Enticelabs.
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THOUGHT LEADERSHIP
AGILE: THE NEXT STEP
By Jim Highsmith Ten years of agile methods for software development have had an extremely positive impact on the IT industry. With this in mind Jim Highsmith, ThoughtWorks, looks back at those 10 years and looks ahead to the agile movement’s teenage years. Recently, I’ve read blogs and articles from ‘agilists’ who are bemoaning the state of the agile movement. They are concerned that the movement has gone awry and that they are not living up to the vision of the founders. So, what did they expect? As any movement expands from its narrow early base of practitioners, others take it in unforeseen directions — some good, some not so good. That’s just the way movements go. As we reflect on 10 years of agile, I’d prefer to focus on the positive — how we’ve learned to deliver value to customers faster, how we’ve brought quality to the forefront in ways that haven’t happened before, and how we’ve improved the quality of work places around the globe. MARCHING ON FORWARD
Idealism vs. practicality. As agile permeates into larger organisations; we have to focus on both idealism and practicality. Many people don’t care much about obscure arguments — they care about results. Idealism and innovation are absolutely necessary for a vibrant movement, but they need to be balanced with a dose of practicality in organisational transitions. Reinvigorate. The power and attractiveness of the agile movement lies in its values as expressed in the Agile Manifesto and the Declaration of Interdependence. The more we can emphasise the dual importance of both doing agile (practices) and being agile (values), the better we can move forward on a more solid foundation. Unify vs. splinter. As any movement grows, there are times when it tends to splinter and times when it unifies. We need to bring the agile/ /lean/ etc. communities together, rather than continue to splinter further, leaving less space for the idiots to exploit. The important goal is to rotate back and forth between innovators and imitators — advancing and then consolidating — without falling into the idiot trap (as did the financial industry). I hope that by focusing on agile values and principles, continuing to innovate, balancing between idealism and practically and taking opportunities to unify rather than splinter will keep the idiots at bay.
There has surely been a large influx of imitators into the agile movement — an inevitable development as the market for agile services and tools has expanded rapidly. Many of these imitators added improvements while some have tarnished the agile brand. But the real question is how do we keep moving forward as a movement? There are at least four keys ways that come to mind. Let me explain... Innovate. I’m encouraged by the continuous innovation I see in agile: DevOps, continuous delivery, the conversations over technical debt, lean, agile/adaptive leadership etc. Continued innovation INNOVATION, IMPROVEMENTS AND INNOVATORS combats the creep of staleness that tends to infect Another reflection is that the improvements to agile lie, not in popularisation but in continued innovation movements after a few years. 36
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THOUGHT LEADERSHIP
AN EXPANDED FUTURE
My final reflection on the agile movement is about an expanded future. Enterprises are beginning to expand on their success with agile software development. They’re looking at bringing agile principles and practice to other parts to the enterprise. The industry appears to be at a tipping point to a far more strategic opportunity to implement agility at an enterprise level. In the face of markets characterised by rapid change, and innovators. Innovation requires stepping out of complexity, and ambiguity, enterprise executives are comfort zones and being different from others. finding new ways of harnessing their organisation’s Ten years ago, in February 2001, a group of 17 creativity, adaptability, operating prowess and unconventional, unorthodox individuals got together, customer relationships. In various circles, this wrote the Agile Manifesto and launched the agile leadership style for the future has been called creative movement. In the last 10 years agile delivery has often leadership, adaptive leadership, Management 2.0 (and moved from the unconventional to the conventional, 3.0), collaborative leadership, light-touch leadership from the maverick to the conformist. What now? and agile leadership. The roots of agility are in complex adaptive systems and the notion of operating at the edge-of-chaos — ABOUT THE AUTHOR that knife-edged balancing point between chaos and Jim Highsmith, an executive consultant stifling structure. at ThoughtWorks, first began his career As we move into the adolescent years of the agile working on the Apollo manned space program and then found himself movement, we can’t forget that agility isn’t about launching his first agile project in structure, practices, and conventions. Agility is the 1990’s. He is a published author ultimately about living on the edge, of pushing the of three books on agile and was envelope, of standing out in a crowd, of being lopsided also awarded the 2005 International in a world of conformity. Stevens Award for his contributions to software development. Today, he Teenagers are unpredictable. The teen years has helped the likes of Amazon, BT, are bumpy, sometimes teens do great things, and Expedia, Lonely Planet and thetrainline. sometimes they get into trouble. As the agile com with their approaches to software movement matures past its tenth anniversary, it will development be unpredictable also. www.globalizationtoday.com
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THOUGHT LEADERSHIP
GLOBAL SOURCING & TRYST WITH GROWTH By Bobby Varanasi, COP Series II: The Battle of Wits
IT’S IIN THE ECONOMIICS
For nearly five decades emerging economies have been pursuing various forms of industrialization, with more failed initiatives than successes. Enlisting a few entrepreneurs governed closely by national governments, many sectors did see light of day. Export-orientation (in much Europe and South East Asia) or Import-substitution (in much of erstwhile closed economies like India, Latin America) did pave the way for benevolent dictatorships on the one end, and government largesse (through unfettered democratic endeavors) bestowed on a chosen few, without any care for competencies, competitiveness or continued capability enhancements. Supported by extensive barriers (trade and tariffs in the preGATT/WTO days) to more cultural and localization barriers in the past two decades, national growth was fueled by a chosen few organizations that thrived in controlled environments. Remained hidden were the skeletons in the closet – a huge number of them – that didn’t enable wealth creation or distribution, leaving much of the citizenry in these developing nations (not emerging anymore – they hate the term more than the reality associated with it unfortunately) bereft of either the opportunity to participate, or the ability to do so even if entrepreneurial spirit ran high in their local cultures. In retrospect such pseudogrowth continued to dilute the one core component that could sustain it – competencies of citizens. Fast-forward to today’s day and age, economics is given short-shrift on the one end, while the very same economic growth is touted as the reason for putting money and muscle behind the sourcing industry and larger ICT sector. Do you not find this counterintuitive? 38
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ELUSIVE GROWTH
Here I would like to quote Raghuram Rajan, the famous economist for the clarity with which he has articulated the current global tryst with growth1. He talks about how the elusive search for growth is evident from the slow and steady pace of 1.3% to 1.8% growth – built over at least a century – that nations like Australia, USA (termed early developers) have seen, and how nations like Chile, South Korea, Taiwan (termed late developers) that joined the ranks of wealthier nations only recently grew at multiples of these rates in a much shorter period - just a few decades. The fastest growing nations of Japan, South Korea, Malaysia, Taiwan and now China, India, Brazil show excessive paces of growth. So the question he addresses is the reason for this dramatic shift, and whether it is sustainable. Pursuit of physical capital was indicative of the best way then to get out of the rut of continued poverty. Thus initiatives
THOUGHT LEADERSHIP
and policies were pushed because it was assumed that physical capital would increase income, and consequently higher incomes would make everyone a lot more productive. Interestingly enough, the assumptions that increased capital in developing (or should I say willing and poor) markets would show significantly higher returns on investments didn’t necessarily translate into reality, other than creating a temporary spur with movement of capital. Principal reason for this disappointment was that the attendant surrounding factors necessary to sustain such growth (and new industries where the capital is invested into) were minimal at best, resulting in much lower returns that was anticipated. The assumption is that - not accounting for differences between the rich and the poor - capital should still be far more productive in countries with poor citizens. Unfortunately it is quite plain for everyone to see that more capital invested in education,
infrastructure etc has done little to make a great difference to growth or sustainability, which I think is far more crucial. Rajan’s key question we need to consider is this: what is the element that seems to be missing in poor countries that keeps machines and educated people from maximizing their productivity and the countries from growing rich? He goes on to explain the endeavors adopted by many nations in their quest therefore to build organizational capital, and attendant factors required to sustain and enhance productivity. Cultural distinctions notwithstanding (read savings mindset vs. consumerism) supported by national policies around “equitable” wealth distribution vs. “managed capitalism”2, organizational capital today seems to have become a more diluted version of what was really necessary – structural and systemic realignment of attendant elements that would not only permit, but support a www.globalizationtoday.com
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THOUGHT LEADERSHIP
thriving and highly productive citizenry. In the context of the ICT sector generally speaking (and the global sourcing sector in particular), the above needs to be distilled clearly so as to underscore not just the successes but also the avoidance stance adopted by many – or should I say selective development initiatives – that are beginning to show serious ramifications within domestic economies, and putting a spanner in the works of globalization. QUEST FOR QUIICK WIINS
At various points in time service providers from developing nations have – taking a leaf off the India success story – paraded their wares as (at times) the next best alternative to India, to the current rhetoric that they were the best at serving the needs of the private sector from industrialized economies. Again, the need to ensure that all attendant elements existed within the nation to support and deliver upon such claims of competencies translated into nothing more than physical infrastructure, and dedicated fiscal incentives that allowed for a story of attractiveness to be crafted, packaged and sold. The model that China has adopted – build and they will come – seems to be visible everywhere, the only difference being that in the context of global sourcing, tech parks were perceived as sufficient to lure organizations to do business in these locations with “emerging and half-baked� providers within. The alternative to outsourcing was to offer “base camps� to set up captive/ shared service centers through deploying an FDI model. Replacing the term “goods/ products� with “services� was the only change made to national government pursuits at attracting competencies. The age-old discussions and clarity with technology/ competence-transfers etc was whittled down to nothing more than jobs – a seemingly mindless pursuit for short-term political gains that seemed to have a story talking about economics. In reality this talk only contributed 40
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to ffast-paced “citizen-value d and d random d “ l devoid� d d� adoption of modern technologies just to be seen as “fast-growing�. Consequently, policy changes that have been – and continue to be – made within these nations hinge on one factor alone, that of quick wins to showcase their modernity worldwide. Being a witness to such “largesse� funded either from internal coffers (read rich fast-growing nations who leverage traditional industry sectors) or from developmental institutions (read IMF, World Bank etc), I have come to accept the fact that the least important aspect seems to be about wealth creation and equitable distribution. Policy Impacts: Random policy developments to satisfy needs of a few individual organizations
THOUGHT LEADERSHIP
realities, thereby severely limiting the nation’s (and its private sector’s) ability to sustain and grow in a competitive marketplace. The “last nail in the coffin” seems to be the knee-jerk responses to discrete needs of a few, over the greater good of the larger citizen groups. Jobs and national income have become “emotional” rather than “practical” levers, resulting in randomized investments of hard-earned tax-payer dollars. While this may not be an issue for organizations looking to expand their footprint, their emphasis on longevity with operations in a particular location is – as everyone knows – a function of continuity and consistency with economic and political environments. The resultant view such organizations have begun to take is to remain on the fringe of development pursuits of emerging nations, instead of contributing to it. On the other end, such nations who have hoped (and invested in) that such global organizations would contribute to their national growth are disappointed. Local industry has begun to see through this dichotomy and is demanding soft barriers to be instituted (given that most are unable to put up hard-barriers anymore thanks to WTO and other FTAs) so as to remain relevant. The melee caused by randomized policy development to satisfy immediate needs of a few llooking k for f a global l b l footprint f - has h become b a has begun to put entire nations and their pursuit at cabinet/ parliamentary goal for many, resulting in creating “intelligent, knowledge driven” economies quick creation/ replication/ modified adoption of in jeopardy. policies from the industrialized nations. Putting the cart before the horse is what I see today – instead Emotion with Socio-Economics: For many of market realities governing policy changes, developing nations, uplifting the poor has been, and replicating and quickly instituting policies and continues to be both a political and economic goal. guidelines from other nations has become the norm. The inadvertence of bundling poverty alleviation At the level of inter-corporate engagements, such with creating new-age industries policies more often than not fail to deliver. In such has resulted in a huge gap – the capability instances, reason would dictate a thorough review conundrum. This is true of most economies and of the efficacy of such policies (and related longer- not just the developing ones. Interim measures at term impacts to the economies in the context of selective adoption of policies to ensure avoidance of multiple sectors contributing to economic growth). upheavals within economies has resulted in pursuing Unfortunately however, policies within the ICT the “easy” as opposed to the “important” goals. sector have been bereft of domestic and regional Many conversations around the need for including www.globalizationtoday.com
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THOUGHT LEADERSHIP social goals into economic / commercial goals are entertained only within formal congregations. Appreciation of such perspectives doesn’t necessarily indicate acceptance of facts. Moreover, uplifting the poor as a core goal seems counter-intuitive to corporate goals surrounding shareholder value and maximizing profits. Nations and economic development agencies may be concerned with such aspects, but rallying the industry within has always been a challenge for all, and a failure for many developing nations. In such contexts, how wise is it to seek the support and enlistment of organizations from industrialized nations, who themselves are struggling with costs, relevance and competitive pressures? In simple words – it’s not my problem. While I understand, I have better things to do. While I commit to addressing the entire opportunity presented with over 2 billion people at the Bottom of the Pyramid in a more comprehensive manner, what saddens me the most is that many developing nations, having faced failure in presenting their value as compelling locations to do business with, are realigning their positioning and posturing by talking about how their poor can be uplifted. Since they couldn’t attract investments in the global sourcing marketplace by talking labor arbitrage and skills, they are now adopting an “emotional� stance while pursuing the very same goals. While I don’t necessarily disagree, what perplexes me is that such ABOUT THE AUTHOR
Bobby is one of the top 25 most powerful leaders in the global sourcing space, and the [founding] Chairman & CEO of Matryzel Consulting Inc, a strategy consulting, sourcing advisory and management firm headquartered in New York. Matryzel advises corporations and governments worldwide adopt concerted strategies aimed at enhancing competitiveness while focusing on their core competencies. He advises federal governments across four continents on ICT sector development with particular emphasis on policy development, industry-government partnerships aimed at creating GDP growth and enabling positive economic impacts. Bobby has advised Fortune 500 customer organizations on Strategic Planning, Mergers & Acquisitions, JVs, Private Capital Investment Evaluations, Process Reengineering, Pricing Strategies, Sourcing Relationships, Business & Financial Modeling et al, contributing immensely to global sourcing for clients.
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endeavors are “exclusive� in the manner in which they are pursued. Policy levers are quickly altered to suit an immediate potential opportunity, without thought for the longer-term impacts. Again, not being an advocate of unfettered capitalism, appealing to the broader sense of human greed needs more than just emoting. The resultant confusion is plain for all to see, since any nation that’s appealing to the larger global marketplace with conversations around their sectors creating “social and equitable growth� is being scoffed at. The adage – clean your house first is coming back to bite at everyone. IN CONCLUSIION
National endeavors at economic growth cannot be separated from commercial endeavors driven by industries/entrepreneurs. While the latter may find it both unimportant and confusing to indulge in economic conversations, the very fact that industry contributes to economic development (and consequently wealth creation, distribution and the greater good for all with higher incomes) is crucial to understand and contribute to. If governments want to play the role of enablers only, then private sector has to take on the responsibility for its own competencies, capabilities and work with governments in creating “all� the enabling environments. Private sector cannot sit on the sidelines and rake in profits alone. It has to work hand-in-glove with governments in realizing citizen value. Fixing the blame is easy. Agreed, governments in most developing economies are selective, acting as benevolent dictators some of the time, endorsers, mute observers or drivers at other times. Regardless of the continued face changes of governments, industry cannot relinquish its role – that of both the torch-bearer and beholder of wealth creation. I find it interesting to observe that some key development components are missing. While I have addressed three of them in this series so far, I shall continue the series and touch upon two other components in my next paper, namely (a) Human Capital Development, and (b) Inter-Sector Collaborations. So please watch this space!
WHAT’S HAPPENING AT THE IAOP
WELCOME NEW IAOP MEMBERS IAOP is pleased to welcome new and renewing corporate and professional members from: A.P. Moller Maersk; Accedeo; Accenture; Allstate Insurance Company; APAC Customer Services; Applied Materials; Assenda; AstraZeneca; Backyard Leaders, LLC; Bancolombia; Capgemini; Charles Schwab & Co.; Chubb; Clear Harbor; CME; Columbia Univsersity; Covidien; Credit Suisse; CSC; Eli Lily; GPS Group, Inc.; Hess Corporation; Hewlett Packard; Hospital Corporation of America (HCA); Infosys; ISS Facility Services; Join Innovation Technology Co., Ltd; Kelly OCG; Kraft Foods; Kromann Reumert; Lawson Software; Lear Communications; Lexis Nexis; Manulife Financial; McKenna and Associates; Microsoft; Morrison & Foerster; NCO Group, Inc.; NCR Corp.; Neusoft Corporation; Nordea Life & Pensions; Northern Works; Oakton; Orange Business Services; PHH Corp.; PwC; Softtek; SunGard Asia Pacific; Symantec; TCS; The Goodyear Tire & Rubber Company; The Guardian; The Results Companies; TPI; University of Missouri - St. Louis; VanceInfo; Vangent, Inc.; Vodafone; Washington Gas; Whirlpool; Wipro Technologies; WNS; and Zurich Financial Services. For information on IAOP membership, please visit www.IAOP.org/membership or email sales@iaop.org.
CONFERENCES & EVENTS CHINA WEEK 2012 April, 2012
Join IAOP and its China chapters as they tackle critical topics in the outsourcing industry at individual chapter meetings held in Beijing, Shanghai, Hong Kong, Qingdao/Shandong. For more information email info@iaop.org. THE 2012 LATIN AMERICA OUTSOURCING SUMMIT October 2-3, São Paulo, Brazil
Building on the momentum of the first Latin America Outsourcing Summit, held in Colombia in 2011, which drew over 300 outsourcing
professionals, we are excited to announce The 2012 IAOP Latin America Outsourcing Summit, which will bring the thought-leadership and global network of the International Association of Outsourcing Professionals® (IAOP®) together with leaders from across the Latin American business community. An exceptional opportunity for individuals and organizations involved in outsourcing as customers, providers, and advisors with operations in the region or looking to do business in this exciting region to both understand and leverage the explosion of outsourcing taking place across this part of the world. www.globalizationtoday.com
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WHAT’S HAPPENING AT THE IAOP MEMBER SERVICES IAOP membership provides access to a wide range of services designed to help you and your organization improve outsourcing outcomes. Many of these services are included as part of IAOP’s Professional or Corporate Membership, with discounts available for use beyond the level provided. Some services are also available individually at non-member rates. t (MPCBMJ[BUJPO 5PEBZ - The official publication of IAOP creates the largest and best informational publication on outsourcing by uniting and tapping the collective intellect of individuals from around the world. IAOP Members receive a free subscription plus the opportunity to get published, promote products/services and advertise. t *"01 T ,OPXMFEHF $FOUFS - This online repository houses more than 1,000 articles, including chapter meeting presentations, conference proceedings, industry whitepapers, research articles and more. t (MPCBM $IBQUFS /FUXPSL Through its active and expansive chapter network, IAOP members can share their expertise and find knowledge on best practices for specific industry segments, topics and geographic areas within outsourcing. t $POGFSFODFT &WFOUT IAOP hosts the world’s best-known and most highly-respected executive conferences on the topic of outsourcing, including The Outsourcing World SummitŽ. t 0VUTPVSDJOH 1SPGFTTJPOBM $FSUJÜDBUJPO 'SBNFXPSLT (OPCF) - RIAOP’s trainings and certifications are the industry’s de facto. Members receive substantial discounts. t 7BMVF )FBMUI $IFDL 4VSWFZ - This web-based diagnostic tool provides outsourcing customers and service providers with rapid insights to realizing outsourcing value. t NEW! (MPCBM 4VQQMZ 3JTL .POJUPS - A unique web-based product that enables clients to monitor, predict and manage the various risks in their services supply chain (captive centers and outsourced services such as ITO, BPO, KPO etc) across countries, cities and suppliers, in real-time. t #FTU0VUTPVSDJOH+PCT DPN - Companies seeking the best talent for outsourcing jobs, as well as professionals looking for employment opportunities, will benefit from this IAOP member service. For more detailed information on each of these member services, visit www.IAOP.org/MemberServices.
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With Brasscom as our partner, the support of our members in Latin America, and SĂŁo Paulo, Brazil as the backdrop, this event will unlock the power of outsourcing for all of Latin America and for the global community of outsourcing professionals. For information on sponsoring or speaking, email info@iaop.org. THE 2012 OUTSOURCING WORLD SUMMITÂŽ WAS A HUGE SUCCESS!
IAOP thanks the nearly 800 outsourcing professionals and industry leaders who contributed. MEMBERSHIP Membership in IAOP provides access to an extensive array of services, and just as importantly distinguishes organizations and professionals as leaders in the field of outsourcing. IAOP membership demonstrates a commitment to innovative thinking, continuous performance improvement, and to the sustaining development of outsourcing as both an industry and as a profession. CUSTOMER CORPORATE MEMBERSHIP Organizations that are currently outsourcing or are considering one or more outsourcing initiatives should become Customer Corporate Members of IAOP. This membership provides organization-wide access to the association’s research, training, certification, and networking programs - all designed to help companies achieve better business results through outsourcing. PROVIDER/ADVISOR CORPORATE MEMBERSHIP Outsourcing service providers and advisory firms should join IAOP as Provider/Advisor Corporate Members. This membership provides the same organization-wide access to IAOP’s research, training, certification, and networking programs as Customer Corporate Membership, but also includes member-only sponsorship opportunities that serve the marketing and business development needs of these companies. PROFESSIONAL MEMBERSHIP Professional Membership is available to individuals either as part of their company’s corporate membership or on an individual basis. This membership serves the needs of practitioners working in the field of outsourcing whether as customers, providers, or advisors. In addition, it provides these professionals with direct, personal access to association services. For information on IAOP membership, e-mail sales@iaop.org.
WHAT’S HAPPENING AT THE IAOP THE 2013 OUTSOURCING WORLD SUMMIT®
CALENDAR OF EVENTS
February 18-20, 2013 | JW Marriott Phoenix Desert Ridge | Phoenix, Arizona
IAOP CHAPTER MEETINGS
Every year, hundreds of outsourcing executives from across the industry and around the world who are seeking the very latest insights and ideas attend the Summit. Educational sessions deliver specific actionable solutions to current challenges faced by experienced professionals. Case studies feature actual experiences and the lessons learned, and discuss new ideas, approaches and opportunities. The Outsourcing World Summit has become the event that executives attend each and every year to stay informed of the latest developments affecting the outsourcing industry and their profession. IAOP is pleased to announce The 2013 Outsourcing World Summit is being held February 18-20, 2013, at the JW Marriott Phoenix Desert Ridge in Phoenix, Arizona. For more information and to register, visit www.IAOPorg/Summit.
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"6453"-*" CHAPTER MEETING ON “SERVICES GLOBALIZATION IN AUSTRALIA – TRENDS AND PERSPECTIVES” AND “BUSINESS IMPROVEMENT AND COST REDUCTION THROUGH TRANSFORMATIONAL OUTSOURCING”
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CORPORATE & PROFESSIONAL DEVELOPMENT GLOBAL OUTSOURCING TRAINING FROM IAOP
IAOP Training- Maintain Your Competitive Advantage
“Outsourcing is a highly strategic, complex, and ever changing process that requires constant governance, due diligence and monitoring on the part of clients and service providers. Keeping up with changes in the field and implementing best practices is critical to outsourcing success - IAOP provides state of the art instructor led and online training on outsourcing best practices for both clients and service providers. IAOP training delivers the knowledge and skills outsourcing practitioners need to keep up with the ever changing field of outsourcing.” Jim Shea, COP-GOV A new year brings expanded opportunities for individuals and companies to incorporate IAOP outsourcing training into their plans for exceptional development. Expanding on the success of the globally lauded COP Master Class, IAOP is adding new training opportunities, both live and online, that will appeal to outsourcing professionals at every step of their career pathway. IAOP offers:
The calendar is frequently updated – to stay current, check IAOP’s website for details at www.IAOP.org/calendar. IAOP Professional Members may attend an unlimited number of chapter meetings. IAOP also offers complimentary Associate Membership which allows non-members the opportunity to attend up to two chapter meetings as IAOP’s guest. Go to www.IAOP.org/chapters for more information and to register.
t COP Master Class (Live public or on-site private, online) - the de facto end-to-end global training for outsourcing professionals. (leads to IAOP aCOP or COP Certification) t Outsourcing Professional Course Catalog Accredited course offerings through our training partners, such as the eSCM Capability Model courses from ITSqc, or the Sourcing Governance Foundation course (leads to IAOP COS-FP Certification) t Governance Workshop (Live public or on-site private, online) - gain comprehensive, cutting-edge knowledge on all aspects of creating and sustaining successful relationships with your outsourcing partners (leads to IAOP COP-GOV Certification) t Service Provider Business Development www.globalizationtoday.com
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WHAT’S HAPPENING AT THE IAOP
2012 CLASSES CURRENTLY ACCEPTING ENROLLMENT ARE:
North America Trainings
Workshop (Live on-site private, online) - provides service providers, large and small, with the knowledge and skills to deal with complex and rapidly changing market realities and challenges needed to win and survive (leads to IAOP COPBD Certification) Tailored training packages from 1 - 10,000 – for more information contact sales@IAOP.org. COP MASTER CLASS & GOVERNANCE WORKSHOP SCHEDULE
t ."3$) Ź RIZZO EXECUTIVE CENTER, CHAPEL HILL, NC (SEATS STILL AVAILABLE)!* t +6/& Ź KINGBRIDGE CONFERENCE CENTRE, TORONTO, CANADA * t 4&15&.#&3 Ź INVERNESS HOTEL AND CONFERENCE CENTER, DENVER, CO šNEW Ÿ*
*Register now for any North American COP Master Class Bundle and SAVE $750 off the regular price. These classes include the 3 day COP Master Class and 1 day Outsourcing Governance Workshop. Those who attend the above classes will earn 90 of the Knowledge and Training points needed for certification, 20 recertification CEHs for COPs, or fully complete the required training for the aCOP designation.
The COP Master Class is a great option for earning up to half (75 points) of the Knowledge and Please visit www.IAOP.org/training_calendar for a Training points needed for COP certification, and full list of classes and current discounts and specials. fully completes the required training for the aCOP designation. Completing the one day Governance Global Trainings Workshop is worth another 15 COP Certification t ."3$) Ĺą ASIA E-UNIVERSITY, KUALA LUMPUR - CONTACT BOBBY VARANASI AT BOBBY@MATRYZEL.COM points. t "13*- Ĺą ASIA E-UNIVERSITY, KUALA LUMPUR - CONTACT Professional development is an important part BOBBY VARANASI AT BOBBY@MATRYZEL.COM t .": Ĺą HARBOUR PLAZA METROPOLIS, HONG KONG of staying ahead in your career. Whether you are a CONTACT WINNIE CHOW AT WINNIECHOW@HBC.HK novice in the outsourcing profession or a veteran, the t +6/& Ĺą ASIA E-UNIVERSITY, KUALA LUMPUR - CONTACT COP Master Class continues to provide new content BOBBY VARANASI AT BOBBY@MATRYZEL.COM to improve your skill set with our training offerings. t +6-: Ĺą ASIA E-UNIVERSITY, KUALA LUMPUR - CONTACT BOBBY VARANASI AT BOBBY@MATRYZEL.COM With our multi class locations and online options, t 4&15 Ĺą ASIA E-UNIVERSITY, KUALA LUMPUR - CONTACT there is an option for everyone. BOBBY VARANASI AT BOBBY@MATRYZEL.COM 46
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WHAT’S HAPPENING AT THE IAOP Certified Outsourcing Professionals
Online Trainings
IAOP also offers the COP Master Class Online along with the Outsourcing Governance Workshop and the Service Provider Business Development Workshop. For further descriptions and information on how to register please visit the online training section of the IAOP website. During The 2012 Outsourcing World Summit, IAOP’s Regional Advisory Board stated that the Outsourcing Professional Body of Knowledge (OPBOK) should be the official guide for all outsourcing professionals in every country, globally. The print OPBOK is widely available and made more affordable by purchasing it through the IAOP bookstore at www.iaopbookshop.com. Every member of your team should have a copy at hand.
t Associate Certified Outsourcing Professional (aCOP) t Certified Outsourcing Professional - (COP) t Certified Outsourcing Professional - Governance (COP-GOV) New! t Certified Outsourcing Professional - Business Development (COP-BD) New! t Certified Outsourcing Professional - Human Resources - (COP-HR) Currently Under Development WHY CERTIFICATION WILL BENEFIT YOU
As the management practice of outsourcing continues to mature, achieving a professional certification will ensure that outsourcing professionals are capable of meeting the design, implementation and management demands of projects across the globe. The use of outsourcing within organizations has increased as Please visit www.IAOP.org/training_calendar for a companies are starting to see that to build a bigger full list of classes and current discounts and specials. and better structure within, outsourcing is one of the most important pieces. Be prepared to take on the gravitational changes CERTIFICATION to outsourcing by becoming a Certified Outsourcing IAOP, through our Outsourcing Professional Professional or Associate Certified Outsourcing Certification Framework (OPCF) is addressing the Professional. Don’t just follow the trend; lead your needs of individuals who work across the global company to success by initiating it. outsourcing industry from entry level positions focused on the delivery of outsourced services For more information on any of IAOP’s programs through to senior executives leading global and services, email info@iaop.org. outsourcing programs at customer, provider and advisor organizations. FREE WEBINARS: THE INS & OUTS OF CERTIFICATION IAOP certifications are now available at every step in the career pathway: Certified Outsourcing Specialists
t Certified Outsourcing Specialist-Transaction Processing - (COS-TP) t Certified Outsourcing Specialist-Finance & Accounting - (COS-F&A) t Certified Outsourcing Specialist - Human Resources - (COS-HR) t Certified Outsourcing Specialist - Foundation Principles (COS-FP) New!
Want to understand your certification options and how one of IAOPs designations can benefit you and your company? Regular complimentary webinars are held on COP Certification/Master Class, COP Recertification, and the OPCF Framework of Certifications. Companies can request a special webinar for their teams. Space is limited and preregistration is required. All attendees will receive a special gift from IAOP. Recorded versions are also available for 24/7 replay. Contact Courtney Coon at courtney.coon@iaop.org for dates and registration information. www.globalizationtoday.com
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WHAT’S HAPPENING AT THE IAOP
AOP IAOP IAOP IAOP IAOP IAOP IAOP P IAOP IAOP IAOP IAOP IAOP IAOP IAO AOP IAOP IAOP IAOP IAOP IAOP IAOP 10-QUESTION QUIZ: FIND OUT IF YOU HAVE WHAT IT TAKES TO BECOME CERTIFIED
Are you prepared to successfully manage outsourcing initiatives? Do you have the knowledge and experience needed to join the industry’s most elite Certified Outsourcing Professionals? Begin your journey to earning one of IAOP’s most distinguished designations by testing your outsourcing professional skills with IAOP’s 10 question quiz at www.IAOP.org/ Quiz. THE COP DIRECTORY IS YOUR GUIDE TO THE MOST QUALIFIED OUTSOURCING PROFESSIONALS!
Want to see who the COPs are in your company? Looking to work with the industry’s most elite professionals? Head on over to the NEW COP Directory where you can search by Name, Country and Company! For current COPs this is a great way to keep your information up to date at all times. Just login to your MY IAOP and enter your updated information into your Member Profile. It will automatically update in the directory. Check out the new COP Directory: www.IAOP.org/COPDirectory. PROFESSIONAL AVAILABLE
DEVELOPMENT
RESOURCES
No matter what industry you are in, IAOP has resources available for all outsourcing professionals. For the latest titles from IAOP, ITSqc and others please visit www.iaopbookshop.com, and get 15% off of any title you order. Also new from IAOP are titles from the American Bar Association found at the IAOP/ABA Legal Bookstore (www.ababooks. org/affiliate/iaop). For more information on any of IAOP’s programs and services, email info@iaop.org.
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NEWSWIRE
International Association of Outsourcing Professionals Honors Procter & Gamble and Cisco for Global Excellence in Outsourcing
The International Association of Outsourcing ProfessionalsŽ (IAOPŽ) has honored employee teams from Procter & Gamble and Cisco with the 2012 Global Excellence in Outsourcing (GEO) awards. P&G’s Global Business Services’ Strategic Alliances team was the winner of the GEO award for Best Practices while Cisco’s Global Finance Operations was recognized in the innovation category for their Entity Support Model. Both teams were honored at a luncheon ceremony attended by hundreds of outsourcing professionals during IAOP’s 2012 annual conference, The Outsourcing World SummitŽ. IAOP started the award program in 2011 to distinguish outsourcing professional teams at customer organizations who have advanced the field’s best practices, created innovative solutions and delivered great results for their companies. Society of Information Management CEO and Former American Express Executive Inducted into IAOPŽ Outsourcing Hall of Fame
Wendell O. Jones and Thomas Meador Honored at Outsourcing World Summit Two leaders who left their mark on outsourcing through their work in the real estate and technology sectors were inducted into IAOP’s prestigious Outsourcing Hall of Fame. Recognized for their contributions to the profession and society-at-large through outsourcing were:
WHAT’S HAPPENING AT THE IAOP
IAOP IAOP IAOP IAOP IAOP IAOP IAOP OP IAOP IAOP IAOP IAOP IAOP IAOP IA IAOP IAOP IAOP IAOP IAOP IAOP IAOP Wendell O. Jones, Ph.D., chief executive of the Society for Information Management for his work as an outsourcing advisor, and Thomas Meador, president and CEO of Michigan Avenue Real Estate Group, who spent a decade at American Express as an outsourcing customer. The pair was honored at a luncheon ceremony attended by hundreds of outsourcing professionals during the International Association of Outsourcing Professionals®’ (IAOP®) 2012 annual conference, The Outsourcing World Summit®. More than 20 exceptional outsourcing professionals from customer, provider and advisor organizations around the world have been inducted into the Hall of Fame since IAOP established it in 2006. For the list of inductees, see Outsourcing Hall of Fame. IAOP Releases The 2012 Global Outsourcing 100 and World’s Best Outsourcing Advisors
The International Association of Outsourcing Professionals® (IAOP®) has announced its annual Global Outsourcing 100® and World’s Best Outsourcing Advisors lists. The unranked lists were released at the opening day of IAOP’s 2012 Outsourcing World Summit, at Disney’s Contemporary Resort in Lake Buena Vista, Florida. The outsourcing service providers named to the seventh annual listing of Global Outsourcing 100 includes companies from around the world providing the full spectrum of outsourcing services. The association recognized the companies named to the lists at its 15th annual summit that brought together hundreds of outsourcing customers, advisors and providers from around the globe to share strategies for success in today’s economy.
“The companies on this year’s Global Outsourcing 100 list represent the elite in our field, hailing from every corner of the globe and providing an extensive array of cutting-edge services,” said IAOP CEO Debi Hamill. “Each year the competition to be named to the top 100 companies continues to reach higher levels, as the outsourcing industry continues to grow and mature in many markets.” Rankings of the companies on both lists will be unveiled in a special advertising section in the July 23rd global issue of FORTUNE® magazine. www.globalizationtoday.com
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SCRAPBOOK
2012 Outsourcing World Summit
20
Today December 2010
Outsourcing Professional Certification FrameworkTM (OPCF) The OPCF is designed to address the needs of individuals who work across the global outsourcing industry from entry level positions focused on the delivery of outsourced services through to senior executives leading global outsourcing programs at customer, provider, and advisor organizations. At each stage in an individual’s career there is an opportunity for both professional development and professional recognition. The OPCF is made up of three families of certifications:
Certified Outsourcing ExecutiveTM (COE) Certified Outsourcing Professional® (COP) Certified Outsourcing SpecialistTM (COS)
BENEFITS OF CERTIFICATION Certification establishes a level of professional recognition essential in a field as complex and risk-based as outsourcing. When working together across the customer-provider relationship, certification brings a common framework for success that benefits both organizations involved. Certified individuals command greater respect within the industry and their companies, higher compensation levels, and expanded and enhanced career opportunities.
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I’M A COP
*Expect better, more consistent results with me.
Training programs are available at the individual and corporate level. For more information, visit
www.IAOP.org/OPCF.
ADVERTISER INDEX PAGE #
COMPANY NAME
URL
18, 19
Accenture
www.accenture.com
12
Avasant
www.avasant.com
2
BCS
www.bcs.org
4, 6, 16
International Association of Outsourcing Professionals (IAOP)
www.IAOP.org
0
International Medical Corps
www.InternationalMedicalCorps.org
24, 25
Kelly Outsourcing & Consulting Group (KellyOCG)
www.KellyOCG.com