G8 2010: Global Sourcing Think Tank: Eliminating the White Noise
G8 2010 North America: Global Sourcing Think Tank: Eliminating the White Noise
Eight pioneering strategists from the consulting, advisory and BPO side of the shared services and outsourcing space came together for the first time in Orlando, North America as part of the Global SSON G8 series. G8 was designed to help create a common agenda and eliminate the white noise that comes with a growing complexity of sourcing models and providers and was launched at Shared Services & Outsourcing Week, APAC 2009
Kept in check and provoked simultaneously by George F. Will, America’s Foremost Political Columnist, the panellists gave an honest and frank account of the state of the union in this space. The audience was treated to a selection of choice insights and also given an opportunity to put the panellists on the spot.
Topics for discussion included: ‘The Future of Sourcing Models’, ‘Economy & Finance’ and ‘Offshoring’, as the debate continues on the future of US companies continuing to offshore.
G8 North America Participant Interviews
|Anoop Sagoo, MD F&A BPO, Accenture|
"There should be as much focus on the retained structure as there is on what is being outsourced. What is outsourced is normally very well designed. What is retained is not."
How do you structure a BPO so that you achieve what you set out to achieve? With most of the focus typically on the outsourced deal, the retained organization is too often neglected. But realistically, it’s the retained organization that drives the business case. Accenture is taking a more holistic view.
|Bill Payne, GM, BP Services, IBM|
"Many people still perceive some of the basic BPO tasks as risky. I can see why this was the case five years ago – but it no longer applies."
Does the market value outsourcing, and is this reflected in EPS? IBM has tracked this data and shows a statistically significant EPS increase for companies that have outsourced.But too many companies still don’t recognize outsourcing as a tool to be leveraged.
|Cliff Justice, US Leader of SS&O Advisory at KPMG |
"Many organizations don’t have a comprehensive services strategy – they leave that up to the functions themselves."
Taking a tower-by-tower approach means corporations are not making the most of internal synergies as many processes cut across towers. An enterprise services strategy seeks to build a better alignment of business objectives with the G&A functions.
|David Poole, CEO of BPO at Capgemini, North America|
"BPO is basically a rapid way of achieving a shared services environment.Research has borne out that it takes most companies much longer to get a 30-50% savings themselves than it does via a BPO."
It’s harder to get internal engagements without a contract of governance structure at the highest level, as is the case in a BPO. Two or three years down the line is where many captives start to falter.
|Ken Hamel, SVP, SAP Solutions|
"We’re looking for the next level of innovation to drive us to be more nimble."
It’s still early for real enterprise services strategy. As a concept it is very important. I expect we’ll see a lot more of this in the next couple of years.
|Marc Schwarz, SVP, Oracle on Demand|
"The ability to compete at a global level requires an expense structure that is as low as it can possibly be. Shared services is a big part of that."
Despite political contraints, there are still plenty of opportunities to be gained.
|Susan Hogan, Head of SS&O Practice for North America, Deloitte Consulting LLP|
"Understanding the baseline before you move to shared services or outsourcing is absolutely critical. The area missed the most is the retained organization."
Most companies underestimate the change management and the reclassification of work required for the parts of the process that remain local. Without a baseline measure, you’re at risk of defending your processes without convincing backup.
|Tom Eiselt, Region Leader for Finance Advisory Services, Ernst & Young|
"The ‘09/’10 budget proposed by the current administration included tax measures which would effectively disincentivize companies from moving jobs offshore to save costs. Although this did not pass, I don’t believe we’ve heard the end of it."
Service level agreements are a very one-sided way to drive efficiencies. A more collaborative approach results in more of a win-win.