3 Emerging Trends in Procurement Technology by guest blogger, Patricia Dreghorn

“We don’t need any more savings. Our company is profitable enough.” When is the last time you heard a CEO say that? I’m going to go out on a limb here and suggest never. Why? Because every successful business knows that there are always more savings to be had. The trick is to be continuously innovating - never rest on your laurels.

Whatever you’re using to achieve cost savings today won’t be able to deliver the same ROI indefinitely – the geo-political environment is changing, business operations are changing, values are changing and technology is changing. If everything outside an organisation is changing, it stands to reason that the organisation will have to change as well – but how?

Technology is not only a catalyst for change, it’s also enabling it. Looking at technology in the procurement department specifically, in recent years, e-sourcing tools have improved the way we source and communicate with suppliers; analytics have allowed us to more accurately track savings and performance; and increased data volumes permits better risk management. So what’s next?

There are a few trends I’m seeing emerge in the procurement technology space. All of them have effectively the same goal of delivering more, long-term, savings but each approach the problem from a different angle. From better insight to empowered suppliers to expertise on demand, these are the three innovations that I think are changing procurement…for the better.

Predictive Analytics

Companies have really only scratched the surface with analytics. Most of what’s available to procurement teams today relies on historic and retrospective analysis, limiting its ability to provide actionable insight from the start. The advancements with Big Data in recent years are enabling a move towards more predictive analytics and forecasting. Predictive Analytics, as the name suggests, provide the ability to predict, with a high degree of accuracy, the outcome of a certain action or the movement of the market, for example. The boundless potential of this technology has resulted in an onslaught of major investment and new business tools are coming to market every day.

With predictive analytics, procurement no longer requires someone to bang their fists on the table and demand a better deal from suppliers. Those days are gone. Procurement can now be founded on intelligent forecasting, understanding the market trends and knowing when is the right time to take risks and seize opportunities. This ability to make better decisions is made possible by a combination of very, very insightful data and by being able to interrogate that data.

Moving Down the Supply Chain

Another area where we can see technology, specifically data, shifting the industry is with insight and support for suppliers - moving away from procurement per se and going much further down the supply chain. Companies are asking not only what suppliers can do for them, but also what they can do to help their suppliers - delivering more value for everyone.

For instance, at Xchanging some of our customers never purchase raw materials, their suppliers are suppliers of finished goods yet we often do research into commodities for other customers, manufacturing companies who require us to dig quite far down the supply chain. Where before these two activities would be separate, now companies are looking at ways where that in-depth commodities market insight can help their finished goods suppliers deal with their own suppliers. I think buyers will be doing a lot more data mining in the supply chain itself in order to help their suppliers effectively find savings for them.

Support Staff-as-a-Service

Rather than employing individuals to run procurement technology and understand that technology, we are seeing a move towards buying that expertise as a service – and the potential savings are incredible. Some providers, for example, are offering support staff-as-a-service. A customer will say they wish to buy a certain amount of time with a product or service at a fixed cost per hour. This model is starting to take off.

In addition to the impressive cost benefits, having support staff-as-a-service also greatly increases a company’s competencies and know-how – which is where I see the real value lie. Where a company may only do one RFP above a million pounds every two years, for example, the support staff do them all the time, in a plethora of different markets, geographies and industries. Having genuine experts provide advice, insight and support empowers organisations to do better and deliver savings they never knew possible.

With procurement, it’s easy for companies to reach a stage where they just take the low-hanging fruit – stick with suppliers they know, processes they know and tools they know – but change is happening all around them. Procurement cannot operate in a vacuum. It affects too many parts of the business and is affected by too many global factors. It becomes very difficult to drive savings over time if you’re just doing the same things you’ve always done. Companies need to look at innovative ways of changing that. These are just three of the emerging innovations I’m seeing in my world but there are more out there. What are you seeing?

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Patricia Dreghorn is Global Technology and Strategy Director for Xchanging. Xchanging is a business process, procurement and technology services provider. Learn more at www.xchanging.com.

Digital Disruption: The Impact on Global Talent

Next week, I will be in Singapore for the IAOP Asia Pacific Outsourcing Summit<<http://neogroup.com/2014-asia-pacific-outsourcing-summit/>>. I look forward to kicking off this event with Brian Brower, digital expert, former Nike Program Director and currently at Vivint, “The Smart Home Company" "Internet of Things", with an Opening Keynote on Digital Disruption & Impacts on Global Talent.

More than a buzzword, digital disruption is creating unique opportunities for businesses looking to adopt a sustainable strategy for customer engagement. As new digital technologies emerge, industries must respond in turn, adapting and innovating in order to drive business outcomes. With a firm grasp on how to employ technologies to advance business objectives, companies can increase their reach, bring products to market faster, and bridge the gap between limited resources—in effect, surviving, and even thriving, through disruption.

What are successful companies doing?

With innovation and digital transformation rising in importance in the minds of many business leaders, one strategic lever that I have seen work well for companies looking to tap into these advantages and opportunities is leveraging global talent.

It’s clear that effectively employing technology and successfully navigating the digital landscape is becoming a competitive driver. Finding the right talent to lead these initiatives is critical, but leaders are often pulled in diverging directions as they struggle to simultaneously overcome competitive pressures to lower costs and increase revenue.

The key is knowing how to leverage global talent, or talent without borders. Technology talent pools exist in regions across the globe, including Asia Pacific and Latin America.

Argentina, for example, offers many advantages as a sourcing destination for creative, customer engagement focused technology talent. The country has a large labor pool, and many of these workers have a bilingual capacity. Cordoba graduates more than 37,000 IT students every year, one of the largest graduate pools worldwide. Further, Argentina operates in a similar time zone as the U.S. and has competitive labor costs.

Adaptability, innovation, talent—these are the keys to overcoming the disruption and creating a sustainable plan for future business success.

Hoping you’ll join me and other industry leaders and practitioners in Singapore!
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Atul Vashistha is the Chairman of Neo Group, a leading Supply Analytics and Monitoring, Governance Support and Sourcing Advisory services serving global clients since 1999

Atul Vashistha to Deliver Special Address at 2014 Asia Pacific Outsourcing Summit

Atul Vashistha, leading globalization expert and advisor, Chairman of Neo Group and Founding Board Member of IAOP, will deliver a Special Address at the 2014 Asia Pacific Outsourcing Summit, taking place September 23 & 24 at the Mandarin Orchard in Singapore.

The theme for this year’s Summit is Enhancing Sustained Value for Regional Integration – Sourcing Maturity & Techno-Commercial Value. The event will bring together influential and creative thought leaders from the buy-side and supply-side, as well as governments and advisors, to “educate, teach, inspire and facilitate collaboration by bringing together the world’s top outsourcing practitioners and business leaders for a one-of-a-kind gathering to explore and set the future of outsourcing in Asia-Pacific.”

Atul will address the more than 400 global delegates, leaders and participants on the topic of Digital Disruption & Impacts on Global Talent. Through an informative and illustrative discussion with digital expert and former Nike Program Director, Brian Brower, Atul will explore the opportunities and challenges presented to global business leaders during this time of digital disruption. The discussion will also focus on the benefits of real-time analytics tools like Global Supply Risk Monitor^SM by Neo Group, which enable business leaders to easily track digital talent around the world in order to enhance a global strategy, unleash creativity and speed up innovation.

“I look forward to participating in this important gathering of industry leaders and practitioners,” says Atul Vashistha. “At Neo Group, we have been spending significant time and effort on better understanding the increased attention and spend on digital. Sharing experiences and insights on these types of timely topics is the best way to move the industry forward and make significant headway in addressing key challenges, such as the dual challenge of speed to market and cost.”

For more information about this event, please visit the event page. View the press release.

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About Neo Group  Founded in 1999, Neo Group helps organizations meet business    objectives and address business challenges by leveraging global    services and sourcing. Our objective research and actionable analysis    helps buyers of Global Services make critical decisions like what to    source, when to source, where to source, who to partner with, how to    manage and monitor, and more.  Our deep experience, real-time    knowledge, proven & proprietary methodologies and track record of    success set us apart from our competitors.

In Memoriam: Jane Siegel, Ph.D., COP

The global, standard-setting association and advocate for outsourcing professionals and the organizations they support. In Memoriam: Jane Siegel, Ph.D., COP It is with deep sadness that IAOP announces the passing of our colleague, Jane Siegel Ph.D., COP after a brief illness. An active member of IAOP, Jane has always been, and will remain, a pillar of IAOP’s global community. “We are all deeply shocked at this sad news and our thoughts are with Jane’s family,” said Debi Hamill, CEO of IAOP. “Not only did she play a pivotal role at IAOP, she was a personal friend. She will be dearly missed." “It is not often you meet a fellow professional who thoroughly impresses by not only their knowledge, but their personality and warmth as well,” said colleague Jag Dalal, COP, IAOP Chief Advisor, Thought Leadership. “She was always there with ideas, thoughts and encouragement whenever I interacted with her.  It was done with a smile, patience and caring thoughts. She has left a void among outsourcing professionals, as she enriched all of us. I am thankful for having met her and worked with her.” Her encyclopedic knowledge, passion,  and genuine connection with those she was speaking to, gave her the respect that made her—among other things—IAOP’s 2014 Member of the Year.  That honor is just a small mark of her considerable influence at IAOP. Jane was an authorized trainer for IAOP’s Certified Outsourcing Professional® (COP) program, a member of IAOP’s Latin America Advisory Board,a chapter chair, a frequent presenter at our conferences and a valued member of several IAOP committees. She gave generously of her time and talents in helping steer our association and relished opportunities to help whenever asked. ”I would like Jane’s family and friends to know she was deeply admired and will be missed by all of us at IAOP who were fortunate to work with her,” said friend and colleague,  John Maher, COP, Executive Managing Director at CB Richard Ellis.  “I am very saddened to hear about her passing but very thankful for many great memories I have working with her.” “I had the privilege of meeting Jane five years ago and immediately we formed a close professional relationship,” said colleague Santiago Pinzón Galán, Executive Director, Chamber of BPO/ITO/KPO, ANDI. “She was a brilliant researcher, sincere professional, wonderful person and clearly a “guru” on outsourcing, committed to improving the outsourcing industry in Colombia and a strong supporter of what we do here at ANDI. Beyond all this, she was a great and dear friend, always had a word of advice and support, and always a human approach to solving issues. We shared ideas and actions to strengthen LATAM as a region. It was an honor to have been taught by her, but the biggest honor was her friendship.” The imprint she leaves in this industry and at IAOP is difficult to overstate.  She was a pioneer; as Senior Scientist at Carnegie Mellon she taught courses about IT-enabled Service Management and participated in research to define meaningful measures of service performance and quality well before its time. She also founded ITSqc, LLC, the spin-off from Carnegie Mellon University created to promote best practice models for the global IT-enabled services industry. "I've had the privilege of working with Jane on many occasions, beginning in the late 1980s," said friend and colleague, Bill Hefley, PhD, COP, Director, ITSqc, LLC.  "We worked together with a graduate student studying software technology adoption, she contributed to the national software capacity study for the US government, contributed to Carnegie Mellon's Human-Computer Interaction Institute and it's growth, and was the founding director of the research center that became ITSqc, LLC, where she was integral part of the spin out from CMU to continue to support the eSCMs - the basis for organizational certification that forms one of IAOP's two pillars of certification for the outsourcing profession - organizational and individual (COP).  Dr. Siegel was a caring individual, who gave much of her time and energy to helping others, and she will be greatly missed by all who knew her." A steadfast force in her fabulous Hermes scarves, her brilliance and integrity spoke louder than words.  All of us at IAOP are proud to have known her, and it is an honor for us to continue her professional legacy. We will miss you, Jane.

Embracing Corporate Social Responsibility

Corporate Social Responsibility is here to stay. It isn’t a hash-tagged trend; it’s here for the duration. There isn’t a month devoted to it on the calendar; it’s not looking to be monumentalized.

Corporate Social Responsibility addresses the social, economic and environmental effects of doing business – defining priorities, integrating social responsibility throughout business, while building social and business value. Outsourcing can be used as a powerful tool for advancing CSR. 

Organizations have a lot of power – locally, globally and economically. Those embracing CSR devote real time and money to socially conscious investments and programs, alternative energy and social welfare initiatives to benefit employees, customers and the world at large.

Corporate Social Responsibility in outsourcing focuses on three critical areas – people, community and the environment. The “people” component relates to employee issues such as fair pay, good working conditions and diversity, while the “community” area focuses on economic and charitable efforts, both locally and globally. The “environment” aspect relates to green practices that help reduce energy consumption and waste. Practicing CSR is also good business for reasons of sustainability, as well as brand-building.

A new eBook – The Outsourcing Professionals’ Guide to Corporate 
Responsibility – examines corporate social responsibility policies 
and practices for outsourcing, including identifying and showcasing 
policies that IAOP members have adopted, creating a framework 
for companies to model new CSR policies and develop a network 
of resources for IAOP members. Written by Bill Hefley, PhD, COP 
and Ron Babin, DBA, COP, with contributions from IAOP’s 
Corporate Social Responsibility (CSR) Committee, its publication 
is the culmination of several years work. It is a one-of-a-kind indispensible 
management tool for any company involved in outsourcing – whether 
customer, provider or advisor.

On Friday, June 20th, at 11 am EST, IAOP CEO, Debi Hamill 
will be hosting a complimentary webinar on CSR which will feature 
Bill and Ron. The trio will discuss the guide, which examines 
corporate socially responsible policies and practices for outsourcing, 
including identifying and showcasing policies that IAOP members 
have adopted, creating a framework on which companies can model 
new CSR policies and develop a network of resources for IAOP members. 

We invite you to attend this complimentary webinar. This indispensible management tool for any company involved in outsourcing – whether customer, provider or advisor is the first and only global publication on CSR. For more information, please feel free to email Pam O’Dell, IAOP Director of Corporate & Professional Development, at pam.odell@iaop.org.
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Kate Tulloch-Hammond, IAOP Manager of Media & Communications

Survey - Outsourcing Talent Research

KellyOCG and IAOP have partnered on Outsourcing Talent Research. Please complete this 1-question poll and tell us what you would like to learn.

Click here to take survey

Battling Survey Fatigue: Five Tips for Simpler, More Effective Supply-Chain Evaluation by guest blogger, Mary D. Lewis

For Sprint, supply chain management is especially important. As a telecommunications carrier, we don’t manufacture most of the goods we sell — which means we rely heavily on the more than 5,000 vendors who help keep our business running and our customers happy. While we understand the limits of our influence over suppliers, we know that maintaining an industry-leading commitment to sustainability — and our No. 3 spot on Newsweek’s Green Rankings — means partnering closely with every vendor, from paper suppliers to IT providers to handset manufacturers. Our ability to achieve our own sustainability goals is often directly tied to suppliers’ understanding of and support for our goals. It’s our aim to make sure that, by 2017, 90 percent of our source-able spend is with suppliers that meet Sprint’s aggressive environmental and social criteria.

Of course, meeting these goals means gathering accurate data from all corners of Sprint’s supply chain and obtaining independent confirmation of that data. But as C-suites across the globe become increasingly focused on sustainability, vendors big and small often suffer from survey fatigue: They’re over-whelmed by the growing number and exhaustive nature of corporate responsibility questionnaires. After all, they have businesses to run, and what kind of benefits are they reaping from tedious scorecards? That’s why Sprint has carefully examined and implemented data-gathering practices that make sense for Sprint and, perhaps more importantly, for our suppliers.


The result, we believe, is that we've been able to gather meaningful, accurate information in a way that reduces work-loads for our vendors’ teams as well as for our own. But fast doesn't mean superficial: We’re also helping our supply-chain partners learn about and improve their own policies and practices.

Though each industry’s supply chain presents unique challenges and processes, we think our focus on simplicity and vendor partnerships reveals a few universal lessons for any company seeking a less harried, more symbiotic journey towards a more sustainable supply chain.

Keep it simple
When requesting information from a vendor, Sprint asks just five questions that we've identified as the most important towards meeting our corporate responsibility standards. At the same time, these questions are complete enough to allow our internal supply chain team to assess the vendor’s performance against our requirements. Ultimately, this shorter survey not only reduces the amount of time and effort it takes the vendor to complete the assessment, it also reduces the amount of time it takes to evaluate and measure responses. At Sprint, we’re also working towards greater harmonization of our vendor assessments, so we’re not repeating these questions when we issue RFPs. The goal is to encourage suppliers to meet Sprint’s corporate responsibility standards without unnecessary changes to the underlying contract. The process is timely, collaborative and effective.

It's ALL important
Just because we’re making a questionnaire easier to fill out doesn't mean we've set the bar low. In fact, Sprint requires all suppliers to satisfactorily answer each of the five questions in order to be considered as having met our minimum environmental and social responsibility criteria. This ensures that all suppliers — regardless if they are a manufacturer or a service provider — are evaluated in a consistent manner and that one’s recycling efforts don’t outweigh another’s GHG-reduction program simply because one question was answered more comprehensively than the other. Making sure each question is sufficiently answered — with supporting documentation — also fosters objective comparisons among suppliers across sectors. To compare suppliers within certain categories, we have additional, sector-specific criteria that are measured separately.

Just the facts
Since each company measures and reports success differently, Sprint currently focuses on asking for information that can be independently verified without requiring additional qualitative or empirical data. This keeps things transparent, and ensures that our team can cross-check the information via a policy statement or corporate responsibility report. For example, if we’re asking a question about green-house gas emissions, we want to see a clear and simple greenhouse gas policy — not a litany of misleading data — that shows what our vendors are doing right now about their GHG emissions and where they are headed.

Require public evidence of affirmative responses
Speaking of easy-to-digest policy statements and CR reports, we can’t be the only ones privy to this information. Any documents we see regarding our vendors’ goals need to also be available to the public — visible by anyone at any time, without the need to request that information. Whether it’s outlined on a vendor’s website or in a corporate responsibility report, any and all policies and statements need to be public. For example: A third-party-issued certificate of GHG emissions is a great beginning for many companies, but we also look for clear evidence that a company has a goal or long-term plan to reduce emissions — preferably by scope — over time. And, we look for proof of a materiality assessment, which indicates the supplier’s sustainability plans are based on knowing where and how they have the most significant environmental impact.

Use a carrot, not stick, mentality
We believe Sprint’s reaction to and use of supplier data is the most important part of the puzzle. We realize that not all vendors will be able to meet our high-level criteria — at least not yet. But that doesn't mean we should turn our back on them. Sprint works as closely with our partners as we possibly can to educate them on how to create better policies that benefit the earth without breaking the bank. We've dis-covered that providing actionable feedback — in writing as well as personally — has been key for ensuring that suppliers understand our CR requirements. Because there might be multiple touch points with suppliers, providing feedback is a team effort. Messaging is orchestrated with our supply chain, business unit and CR reps; for key suppliers, our senior executives personally reach out to their supplier counter-part.

We've analyzed supplier responses to our feedback and discovered headwinds that certain segments of our supply base are experiencing. Armed with this information, we worked with fellow sustainability champions, NGOs, and CSR experts to develop a series of tools and workshops that will further help vendors develop strategies for improving their own practices. Sprint’s supplier booklet and tools for measuring GHG emissions (http://www.sprint.com/companyinfo/scm/src.html), published in September 2013 and updated earlier this year, have been enthusiastically received by our suppliers.

Being there for our vendors, instead of penalizing them, helps them see the true value of sustainability and gets them excited and engaged — the only way to create real sustainable change.

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Mary Lewis’s career with Sprint Corporation has included roles in executive, management and sub-ject matter expert positions. She currently works in Sprint’s Procurement & Real Estate organization, where she leads the development and implementation of Sprint’s supplier sustainability strategy. Mary is a member of IAOP’s CSR Committee and was a presenter at OWS 2014.

The Financial and Social Value of Impact Sourcing

Courtesy of Sarah Troup, The Rockefeller Foundation

With increased focus on shared value, inclusive business, and corporate social responsibility, businesses are looking for both financial return and social impact in their own practices, and in those of their supply chain. At the Outsourcing World Summit, hosted by the International Association of Outsourcing Professionals (IAOP), Impact Sourcing—one way for companies to achieve both goals—was a main session topic.

Putting the Impact Sourcing value proposition to the test, Darcy Antonellis, CEO of Vubiquity and until just recently, President of Warner Brothers Technology Group, Tim Langley-Hawthorne, Vice President IT Governance, Western Union and Gene Agee, Vice President, Sprint, asked thoughtful questions of four Impact Sourcing Service Providers, all partners and friends of the Rockefeller Foundation. These service providers were Samasource, Digital Divide Data, Cloud Factory and Rural Shores.

Read the full blog here: http://www.rockefellerfoundation.org/blog/financial-social-value-impact-sourcing
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Reposted from Sarah Troup's blog at The Rockefeller Foundation -
http://www.rockefellerfoundation.org/blog/financial-social-value-impact-sourcing.

Emerging growth areas in the world of outsourcing

Courtesy of Su Fan

I had the opportunity to attend The 2014 Outsourcing World Summit which was organized by the International Association of Outsourcing Professionals (IAOP) last week in Florida. It was an event that brought together 3 parties – customers who outsource, providers who provide outsourcing services such as Rimhub, and advisors of outsourcing. As a rookie attending the summit, I was excited at the prospect of meeting potential new customers, learning and exchanging ideas with other providers, and hearing thought-leaders from the outsourcing industry speak.

It’s amazing how much we think we know about our business until we attend an event or a social gathering and we are reminded there’s so much more out there that we don’t know! Here are a couple of new and interesting areas in outsourcing that made an impression on me from the summit.

Impact Sourcing is Driving Economic and Business Growth  What is impact sourcing? The Rockefeller Foundation, who funds and fosters this initiative, defines impact sourcing as intentionally employing people who have limited opportunity for sustainable employment, often in low-income areas, to mutually benefit all parties. There are dozens of organizations who are doing this today in the rural areas of India, Nepal, Laos, Cambodia, Ghana, Kenya, Uganda, Rwanda, and South Africa. The work that is being done isn’t manual labor or manufacturing but technical jobs involving digitizing images and data processing. Studies have shown that impact sourcing provides social and economic benefits for the poor in these regions. Corporations who are customers of impact sourcing, including Google and Walmart, benefit from spending less when compared to outsourcing to urban Business Process Outsourcing Centers (BPOs).

Rise in Legal Services Outsourcing (LSO)   As the name implies, LSO is the practice of procuring legal services from an external provider. The types of legal services being outsourced include, but are not limited to, contract reviews, due diligence, research, and legal project management. The availability of offshore qualified lawyers is daunting. Who knew there are over 100K lawyers in the UK and 1M+ in India? While the primary driver for outsourcing legal work is cost savings (30%-50%), enterprises are benefiting from other outcomes including improved quality of service, increased delivery speed which spurs competition, and the ability to focus in-house lawyers on strategic work. In 2008, the American Bar Association agreed that offshore LSO was a salutary practice for a globalized economy. LSO is currently a $3B industry and will continue to grow. Global outsourcing has been around for about 20 years, yet there continues to be a stigma about outsourcing. Too many think of outsourcing as losing jobs and jobs going overseas. Sometimes that is true, but not always. Outsourcing gives access to skills and talent that aren’t available in-house and it creates tremendous value. The world economy simply cannot survive without it. However you may look at it, outsourcing will continue to stick around and flourish. Just think of the emergence of impact sourcing and LSO that I’ve shared with you. - See more at: http://www.rimhub.com/emerging-growth-areas-in-the-world-of-outsourcing/#sthash.XaUHQpT0.dpuf.
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Reposted from Su Fan's blog (http://www.rimhub.com/emerging-growth-areas-in-the-world-of-outsourcing/)

Reflections on IAOP’s 2014 Outsourcing World Summit – #2014OWS

Courtesy of Matt Smith

How Much and How Fast is Outsourcing Changing?

The International Association of Outsourcing Professionals®, (IAOP®), recently concluded it’s annual Outsourcing World Summit.  IAOP said it was their largest Summit ever, with more than 850 delegates attending on behalf of buyer, provider and advisor companies from around the world.

Outsourcing as a profession, a function and an industry is certainly well represented at many other conferences but it’s hard to envision one global event that brings together so many practitioners, end customers, advisors and service providers at one time – all solely focused on outsourcing.  This year in fact the provider community seemed particularly well represented, with 83 unique companies and associations exhibiting in this year’s Global Services Mall and many others in attendance as delegates, speakers or panelists.

Because the Outsourcing World Summit draws so many unique disciplines, specialties and geographies it also feels very referential for the industry as a whole.  What I took away from this year’s Summit, in terms of both hard facts and anecdotal observations, is that the industry is very much alive and well, yet is extremely self-conscious of it’s need to redefine it’s future value.  Some attendees said it more outright than others, but in general the consensus seemed to be that if outsourcing’s value proposition over the next five years remains labor arbitrage, off-shoring and ‘lift and shift’ then a huge opportunity has been missed for all the industry’s constituents.

How Different Will Outsourcing Look in the (Near) Future?

A great place to look for that answer is the survey IAOP released at the Summit.  IAOP, in collaboration with Accenture, surveyed its members and affiliates worldwide in 2012 and 2013 to monitor the evolution of outsourcing and identify developments. Some of the report’s key findings include:
Outsourcing is in growth mode and its influence is now felt across increasing numbers of business processes and functions.As customers and providers alike become more experienced they are targeting more strategic business outcomes—supporting plans for growth, increasing flexibility and accessing specialized skills and talent.To support those strategic goals, more customers are looking for higher-order, knowledge-based skills rather than operational skills alone.The importance of innovation as part of outsourcing contracts continues to be an interesting development. Although customers rarely cite innovation as a primary reason for outsourcing, they overwhelmingly expect innovation as an additional value derived from the outsourcing relationship, and are likely to see innovation as a collaborative endeavor with their provider.

Another revealing possibility for outsourcing’s future direction was revealed in the titles of many of the presentations and panels at this year’s Outsourcing World Summit.  Take a look and you’ll see much more than the traditional fare of governance, quality, locations and vendor selection.  Here are a few that stood out:

5 Steps for a Successful Transition to Managed ServicesTalking SMAC – Contracting for Social, Mobile, Analytics and ComputingCyber WarfareIs it the Dawn or Death of OutsourcingWhen Outsourcing Can Lead to Jail TimeInsource to Outsource to Crowdsource… What’s Really Next?Doomsday Predictions for Outsourcing vs. The New Normal
Not everyone at this year’s Summit is embracing a big transformation of outsourcing’s core value proposition.  Look no further than Robotic Process Automation – predicted by many to be one of the most disruptive technologies to hit the industry since Cloud computing.   For every early-adopter that has already made digital labor part of their back office delivery model there are 3 to 5 providers who simply can’t recognize how much impact this technology can have (to be fair, that number was double just three months ago…).  Adding this kind of technology driven change on top of everything else that was discussed at this year’s IAOP Summit and I was left concluding the outsourcing industry really is poised, ready and capable of a major, self-imposed make over.

How much of this change will happen by the time the 2015 Outsourcing World Summit rolls around?  I’m predicting far more than many expect!

Share your predictions, thoughts and comments with us or join the conversation on Twitter at #2014OWS / #IAOP.  We’d love to know what you think about the future of outsourcing.

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Reposted from Matt Smith's blog (http://virtualoperations-us.com/reflections-on-iaops-2014-outsourcing-world-summit-2014ows/)

Corporate Social Responsibility - A Discussion

This year at The Outsourcing World Summit our Wednesday session will focus on Corporate Social Responsibility (CSR) and Impact Sourcing. So, we're putting this blog out there to get the discussion started...

• What does CSR mean to you and/or your company?
• What should CSR be expected to look like in the industry? 
• How will it will grow and change over time in order to help keep professionals and their organizations ahead of the movement?

Corporate Social Responsibility addresses the social, economic and environmental effects of doing business – defining priorities, integrating social responsibility throughout business, while building social and business value.

Companies have a lot of power – locally, globally, economically. Those embracing CSR devote real time and money to socially conscious investments and programs, alternative energy and social welfare initiatives to benefit employees, customers and the world at large.

Corporate Social Responsibility in outsourcing focuses on three critical areas – people, community and the environment. The “people” component relates to employee issues such as fair pay, good working conditions and diversity, while the “community” area focuses on economic and charitable efforts, both locally and globally. The “environment” aspect relates to green practices that help reduce energy consumption and waste. Practicing CSR is also good business for reasons of sustainability, as well as brand-building.

So, let's get the discussion started...

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A newly published eBook – The Outsourcing Professionals’ Guide to Corporate Responsibility – examines corporate social responsibility policies and practices for outsourcing, including identifying and showcasing policies that IAOP members have adopted, creating a framework for companies to model new CSR policies and develop a network of resources for IAOP members. Written by Bill Hefley, PhD, COP and Ron Babin, DBA, COP, with contributions from IAOP’s Corporate Social Responsibility (CSR) Committee, its publication is the culmination of several years work. It is a one-of-a-kind indispensible management tool for any company involved in outsourcing – whether customer, provider or advisor.
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Kate Tulloch-Hammond, IAOP Manager of Media & Communications

Transition versus Transformation: Perfecting the PO Customer/Outsourcer Relationship by guest blogger Jack Hess

Procurement leaders may have a vision for where they want to go, but they often lack an action plan for how to get there. Others may have an action plan but lack the financial resources or bandwidth required to move forward. On a broader scale, companies often have severe pain points and change management issues but don’t know how, or don’t have the capabilities, to provide the appropriate corrective actions to resolve them.

With these challenges considered, it is not surprising that many enterprises are turning underperforming procurement processes and poorly controlled spend categories over to specialized providers of sourcing and procurement services.  Enterprises have been aiming to stabilize a core set of strategic competencies with focus on customer service excellence and outsourcing the non-strategic processes which do not impact customers directly.

Procurement service providers offer companies a slew of benefits: the ability to achieve realized savings targets, reduce cost for goods and services, deploy spend management best practices, leverage best in class e-procurement technologies, and deploy effective outsourcing processes – all without taking on the risks and assets required to achieve such outcomes internally within the organization.

In order for both the procurement outsourcer and the provider to succeed in a joint engagement, the provider must become a partner, which means they will have a flexible commercial model with agreed upon Service Level Agreements and a “skin in the game” commitment to support sourcing/procurement success, including tracking savings to the bottom line.

From a tactical point of view, understanding the interdependencies between an outsourced process and a customer’s overall business operations is a critical differentiator between transitioning a process and transforming it.  Once you understand factors like the enterprise spend, stakeholder compliance and requirements, inputs, handoffs, relationships, approval points, and the downstream ‘customers’, you can identify ways to also deliver continuous improvements.  Those improvements will ultimately transform the service into a true value-add for the organization, in addition to transitioning the processes.  Linking sourcing and procurement success to financial business outcomes with a potential 4+ X ROI is essential to long-term success of the project. Even more enlightening, progressive PO providers are working with customers to enhance the commercial model and make the financials more attractive by providing Self-Funding and P&L Positive models. This approach can reduce the risk for the customer and, oftentimes, even identify a payback timeline.

Having a service baseline and transition discipline in place allows a customer to truly understand and measure the improvement gains realized through an outsourcing partnership. Below are several more specific suggestions to consider when outsourcing and ways to perfect the provider/client relationship so both parties win:

• Avoid the "lift and drop" approach. This is where a customer simply tosses a category/spend management process over the wall and expects a procurement services provider to deliver the process exactly, or better, as it was in-house. Very rarely will the process being outsourced have already been improved to maximum effectiveness, and even if it was a well-oiled machine internally, the economies of scale achieved through selecting a strong service provider should support reexamining the process.  An outsourcer who is truly a partner and has “skin in the game” will be honest about elements of the customer’s process and provide best-practice alternatives.
• Process excellence must be part of the service. Most organizations seeking to outsource do not have the resources to run continuous improvement initiatives in-house. The service provider should fully understand the customer’s “as is” process and how it relates to other pieces of the business. With those things understood, the provider should then proactively identify comprehensive improvement recommendations before taking it over. Then, the improvement should be accomplished during transition from customer to service provider. Performing this step with process excellence in mind will allow for many benefits, including allowing the service provider to embed a sustainable continuous improvement strategy within the process. 
• Understand the end-to-end spend management processes. This maximizes the engagement through sustainability. Knowing what inputs feed into an outsourcing process and how the deliverables from the process are used within the customer’s business is critical to success. By doing so, a long term transformation vision can be established, versus offering a limited, one-off outsourcing plan – this is the way to maximize the engagement. Sustainability of savings and continuous improvement can be achieved through a comprehensive end-to-end spend management approach including managing the enterprise spend through five simple, but, essential principles:

       
                 1. Manage spend in a competitive environment (when working with incumbents leverage

                     benchmarks and market intelligence for better results)
                 2. Manage spend utilizing contracts and agreements

                 3. Manage spend through compliance to contracts
                 4. Manage spend in a PO Management approval process
                 5. Manage spend through e-procurement technology

The sourcing and procurement services market is maturing rapidly with ever-evolving innovative techniques to provide breakthrough savings while greatly improving the end-to-end processes. To ensure maximum benefits are achieved in a PO engagement, it’s helpful to have best practices in mind at the outset of the relationship – such as those listed above. This facilitates a positive, and mutually fruitful, experience for both the provider and the outsourcer.

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Jack Hess is Vice President of Solution Design and Transformation for Xchanging, Inc. 

Five Tips for an Effective CSR Program by guest blogger, Bob Gogel

Increasingly, companies are committing to making a positive social or environmental impact on the communities where they operate.  But despite their growth in popularity, Corporate Social Responsibility (CSR) programs are not easy to execute effectively.

At Integreon, we designed our CSR program to build upon our operational strengths. As a global outsourcing company providing integrated legal, research and business support solutions, our strengths include an educated, global and multilingual workforce, as well as integrated technology that connects our associates around the world.

We’ve created a series of live-streamed educational classes that allow our associates to teach classes to underprivileged children who lack access to quality education; so far, teaching hearing impaired children in India from Fargo, North Dakota. Soon, we will be expanding our relationship with this school by involving more of our associates, who can teach courses in many different subjects, including English. These experiences give our associates and the children they teach the opportunity to learn from each other by crossing cultural boundaries with the help of video conferencing technology. This is just one example of our CSR efforts at work; below are additional tips for maximizing a CSR program.

Top five tips for effective CSR:

1) Develop a clear mission & objectives: To gain traction internally around a CSR program, it’s important to develop a clear mission statement or an explanation of your company’s values, and how those values will be carried out in your CSR program. Especially for global businesses, it is crucial to establish common principles that all employees can unite around, whether they’re in London or Mumbai.

2) Demonstrate a measurable impact: The programs and initiatives your company implements will have real effects on people. Each annual CSR report provides an opportunity to track your company’s impact in a tangible, measurable way. At the end of 2012 for instance, The Coca-Cola Company’s 5by20 initiative, a global commitment to enable the economic empowerment of five million women entrepreneurs across the company’s value chain by 2020, was able to report it was operating in 12 countries and had impacted approximately 300,000 women.

3) Tell a story with your CSR program: While numbers and exact forms of measurement are critical success factors, there is an opportunity to bring programs to life by sharing compelling stories. For example, an employee’s experience donating holiday gifts to children or running in a 5K to support a charity will emphasize your program’s positive impact through tangible examples.

4) Let your employees be ambassadors of your program: Employees are often the ones doing the work of reaching out to local communities, so give them the recognition they deserve. CSR reports, corporate websites and internal communications all present ideal opportunities to showcase employees’ volunteer efforts or charitable donations. In addition, personalized employee testimonials about a volunteer experience can bring a CSR report to life.

5) Evolve to meet society’s expectations: As society’s needs change, you may need to evolve and/or expand your CSR program. Listening to your key stakeholders and being open to change will be critical success factors for an effective program.  TOMS, for example, recently expanded on its “buy one, give one” business model when it opened a manufacturing center in Haiti, a country where TOMS distributes shoes. This new strategy allows TOMS to improve people’s lives beyond “buy one, give one” by offering a stable source of employment to local residents.

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Bob Gogel, CEO of Integreon, a global provider of integrated legal, research and business support solutions, has more than three decades of experience as both a provider and purchaser of global outsourcing, technology and consulting services. He is also co-founder of a leading think tank – the European Executive Council (EEC), the editor-in-chief of The State of the European Union annual conference, and a member of the faculty teaching the MBA program at HEC in Paris and Shanghai.

Contact Center Management: Motivating Your Employee to Perform Better! by guest blogger Sushma Bendore

Positive reinforcement is a great motivator, whether it is getting your child to complete her homework or driving your team to perform better! When behavior is reinforced positively, we tend to focus more on our strengths and less on our weaknesses. Thus, by regularly praising good work and rewarding targets achieved, you will be able to drive anyone (your child and your team!) into producing exceptional results consistently.

In fact, outsourcing experts recognize the importance of reinforcement in contact center management. They propose that direct, clear communication coupled with encouraging words is crucial for business success. There are two types of reinforcements: external (e.g., monetary rewards, compensation, certificates, gifts, etc.) and internal (e.g., recognition, praise, acknowledgement of a job well done, etc.). Both play an integral part motivating sales and customer service associates to achieve targets and business goals.

EVALUATING POSITIVE REINFORCEMENT

We found that that positive reinforcement is an extremely important ingredient in perceptual learning. We conducted a small experiment to understand its effects in contact center deployment. We decided to divide a batch of newly hired advisors into two groups during the training process. Group A was positively reinforced (feedback on performance, areas to concentrate on for further improvement, review of the previous training session, etc.), while Group B did not receive any reinforcement. Testing on the second day showed that Group A performed much better than Group B.

Since it may have been a little early for the second group to show improvements, we moved to the next phase—this time, the new advisors were trained continuously for 10 days and the test was administered on the 11th and 12th days. Once again, Group A was reinforced and Group B was not. The results were the same, group B did not show improvement and in fact indicated a dip in ITS scores (from 75% down to 71%). Group A showed a spike in results from 75% to 85%!

We can see that the performance gap between the two groups is huge taking into account that the only difference among the two was feedback on right/wrong answers. Clearly, just training in perceptual learning even for adults isn’t nearly enough. One of the solutions we came up with to “deliver” positive reinforcement is a sign-in quiz.

This automatically activated application serves a pop-up that presents a question to an advisor who has logged in. She is required to answer the question and gets immediate feedback on it. Her performance reports can be generated at any desired frequency and provide a mix of reporting variables.

The architecture of the quiz application allows us to create multiple question banks for a given program. The question sets are designed and mapped to the skills required by a program. When an advisor logs in, the question that pops up can be randomly generated from any of the pre-determined sets, depending on the desired mix of the questions (low/medium/high complexity). Also, these questions can be regionalized depending on the type and requirement of the program. 

The sign-in quiz app is designed to: 

• Serve as a skill and knowledge building tool.
• Serving as a skills re-verification tool on minimum skills and knowledge predefined for the program.
• Act as a training needs assessment input for identifying key areas that may require training interventions proactively.
• Provide continuous reinforcement to acquire job-critical knowledge.

We believe that positive reinforcement is not just about encouragement or compensation. It is about inducing continuous learning and ensuring that our employee is motivated to go that extra mile!

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Sushma Bendore, Senior Manager-Business Excellence at Aditya Birla Minacs, is responsible for the Design Factory’s training initiatives. This role involves designing, implementing and delivering performance improvement solutions like  eLearning framework, curriculum design and development, trainer certification framework and project management of training application development like BIT (Business Intelligence Tool T&Q) and SIQ (Sign In Quiz).

Everyone has the cloud, but how are you using it? by guest blogger Kristyn Emenecker

Nick Carr’s controversial essay “IT Doesn’t Matter” claimed that IT – just as railroads and electricity – will ultimately become a commodity accessible to all. Consequently, he argued that companies should not overly invest in, or rely on IT as a resource for competitive advantage. Now marking its 10-year anniversary, Nick Carr’s logic certainly panned out with regards to basic technology. Today, this logic still holds as cloud enters the mainstream. Carr predicted that IT capabilities will ultimately be centralized, freeing companies to invest in innovation in places that really matter to their business – in some ways, Carr predicted cloud.

The cloud computing movement pursues this idea of a standardized and efficient IT model, and helps improve overall business performance by providing the ability to upgrade, scale and integrate effortlessly and cost-effectively. But the cloud movement is still, well, a movement, and what Carr did not predict is the emergence of new services we now also have to consider - such as apps, mobile, social media and so on. Outsourced call center services are no exception to the movement. As the transition to the cloud continues to streamline, the importance lies not in simply having the technology. What really matters is how we use it to our advantage.

The Next Step: Truly Multi-channel

Cloud is already here – it’s happened and we’re beginning to embrace it. So where do we go from here? For business process outsourcers, the cloud has certainly proven to be highly cost-effective in addressing their eternal struggle with unpredictability. With ever-changing levels of demand and activity, cloud contact center platforms make it possible for outsourcers to seamlessly scale up or down to fluctuating resources and minimize resource consumption. Frontline Call Center is an example who, located in Ocras Islands, leveraged the efficiency of a cloud platform for their outsourcing needs and saw dramatic cost reductions while agent utilization doubled. But it’s simply not enough to employ the cloud as an engine of cost savings.

According to Forrester’s research on cloud economics, leaders who have mastered the cloud for cutting-costs are now harnessing it as a profit-driver. By leveraging the advantages of the cloud to design new services, or improve existing ones, companies can create new revenue. For outsourcers, an example of such services could be leveraging disruptive social and mobile channels in their call centers as a value add for customers.

Outsourcing companies are the middle man – they are generous providers with an ethos centered on customer satisfaction, but they get very little in return. In an age where social and mobile are the prevailing means of communication, customers are expecting an experience tailored specifically to their needs and preferences, and that includes multichannel services.

While a cloud platform allows for efficiency such as call routing and callback services, it can also facilitate seamless multichannel communication through SMS, chat and social media. By integrating these types of service add-ons, BPOs are able to accommodate service preferences, providing the new services their customers are looking for. What’s more, outsourcers are presented with an advantageous selling point. Beyond the satisfied customer, outsourcers can upsell these additional features to generate more business opportunities, growth and income. Frontline, for instance, implemented a new tool enabling clients’ customers to connect to an agent from their website without picking up the phone. This gave clients and prospects another reason to use their service, and in two years, they saw a 400% spike in business growth.

While cloud-based IT is to become the norm, simply transitioning to the cloud is only the beginning. Beyond leveraging its abilities to cut costs, integrate quickly, or ramp up and down flexibly, new services and offerings such as social and mobile communications can provide BPOs with a strong competitive advantage whilst simultaneously meeting today’s customer expectations.

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Kristyn Emenecker, Vice President, Product Marketing for inContact, has 18 years’ experience in the contact center industry, serving in a variety of operational, consultant, and senior leadership roles.  She is active in a number of industry groups, published in multiple trade journals and a regular on the industry speaking circuit. Twitter:  @LIVinEden