IAOP held its 20th annual conference Outsourcing World Summit in San Antonio, Texas from February 19-22, 2017. The theme of this year’s conference was Harnessing the Power of Disruption and the local weather cooperated to underline the theme by sending a tornado across San Antonio on Sunday evening after most of the participants arrived. No harm done to the Marriott Hill Country resort that was this year’s spectacular venue but a reminder that all of our business conversations now take place in the context of rolling technological, social, and political change.
I wore two hats at this event; first, as a member of the IBM delegation with our Abbvie client and the powerful story of how we created a financial infrastructure for that new company with an 18-month, complex global deployment of a Finance Infrastructure solution; and second, as a Co-chair of the Atlanta Chapter of IAOP at the conference with several of our members to promote our 2017 webinar series and expand our mailing list of friends of the chapter which includes IAOP members outside of the Atlanta area. In between breakout sessions, I split my time in the Exhibit Hall between the IBM and Atlanta Chapter Booths.
IBM is a corporate member of IAOP, which has grown steadily in its 20-year history to become an active network of more than 40 Chapters and a growing presence here and outside the United States. Twenty years ago at the first OWS, the Association welcomed 150 delegates and at this year’s event in San Antonio, it hosted more than 700 delegates from 40 countries. The Association “with collaboration at its core” maintains a membership body composed of outsourcing providers, analysts, and customers and the interaction among those core constituent groups keep the dialogue energized and relevant.
Prominent participants in this year’s conference included IBM, Deloitte, Accenture, ISG, NeoGroup, Avasant, KPMG, Microsoft, Genpact, Abbvie, WGroup, Infosys, Bristol-Myers Squibb, Humana, CapGemini, and HCL.
Some highlights from sessions I attended follow.
Chapter Chairs Session
Leaders from chapters from all geographies met to exchange current issues with a focus on how the organization can enable successful chapters. One key outcome of the conversation: we identified the common challenges of 1) growing membership and 2) growing an outsourcing practice in the context of the political uncertainty affecting both the U.S. in the early days of the new administration and Europe in the aftermath of the Brexit vote. The idea of exploring item number 2 in a global webinar and using that event to generate interest from prospective members (thereby addressing item #1) was raised (by me) and the Atlanta Chapter will sponsor the event which will be planned for the April time frame.
This session, which excluded customers, was designed as a series of small group discussions of topics that were rotated every 15 minutes. The group I was in elected to remain intact throughout the session with just one or two new people joining the table at each 15-minute interval. We had representation from the U.S. and Europe, providers, advisors and academics.
- How to work Agile in combination with fixed price/fixed scope/fixed date terms? Discussion ranged across contractual remedies and how to cultivate customer expectations that were aligned with Agile vs. Waterfall project methodologies. Disciplined governance (both between client and provider and within the client company) was identified as a critical success factor regardless of the methodology used.
- With the maturation of outsourcing, there are fewer greenfield situations. This can result in more renewals being structured in a sole-sourced context. What should providers and advisors do to ensure appropriate and fair deals? Participants’ experience suggested that many renewing contracts are rebid and that, while norming the price is offered as the business reason, a rebid always suggests some level of client dissatisfaction apart from financial terms. Answers to the topic question included commitments to benchmarking and the use of TPAs to ensure that current market standards are reflected in renewing contracts. The group discussed the importance of rigorous client satisfaction monitoring throughout the term of an agreement to prevent a rebid. When a rebid is a real possibility the providers at our table suggested adding value to an existing contract by expanding the scope or engaging in collaborative solutioning to resolve client challenges in areas that may fall outside of the original scope.
- Participants elected to work on a topic the group identified and – as was the case in nearly every session I attended, regardless of the topic – people wanted to discuss the potential effect on the industry of policies that could emerge from the new American administration that could affect the industry. Participants were quick to note the potential gap between the media noise about the issue and the ultimate emergence of actual policy proposals and their chances of being enacted as laws or regulations. But the group also discussed the influence the noise alone can have on clients who become reluctant to enter into deals whose terms might be subject to scrutiny or the cause of negative public attention.
I found this to be a well-structured session. The topics were well selected and written concisely in a way that invited a range of responses. The ability to move from table to table allowed one to access different viewpoints.
Keynote Address – Kaihan Krippendorff
Although I generally have a high degree of resistance to ‘motivational’ speakers of any kind, the former McKinsey analyst, Kaihan Krippendorff delivered an engaging keynote address. He drew his material from his current book, Outthink the Competition, which aims to deliver practical guidance for those who seek to think differently in order to achieve competitive breakthroughs that change the client conversation. He began with a general treatment of how difficult it can be to advance a new approach to anything and the value of persistence in the face of resistance, citing a quote from Gandhi: “First they ignore you, then they laugh at you, then they fight you, then you win.” He proceeded to cover principles of disruptive competition that included Creating Something out of Nothing (example was a furniture manufacturer who sold his goods via multivendor furniture ‘fairs’ which were common in Scandinavia who was excluded from a fair by his competitors and decided to create and own his own ‘fair’ which became the first IKEA store) and Force a Two-Front Battle with your Competitors (examples were Amazon entering web services and Ali Baba redefining itself as a data company and the lesson was to not define yourself by your industry).
A number of conversations and sessions touched or focused on the future of the outsourcing industry with the buzz focused on the disruption caused by new technology (digital, RPA, AI) driving the creation of new solutions, which in turn depend upon accelerated delivery and give rise to new organizational forms (the “Liquid Workforce”). The only thing tempering the excitement was the thoughtful pause of the practitioners who are rightfully concerned about minimizing the breakage that disruption can produce. And the best discussions were the ones that didn’t stop at the ‘Cool’ response but proceeded past it to consider how the digital revolution underway might call on us to create ways to conserve affected human resources and strengthen customer relationships.
The “Liquid Workforce” concept – the dawning era in which most of us are projected to be casually employed as contractors with our relationship to our ‘employers’ mediated entirely by digital tools – is a provocative idea begging for a fuller treatment by Human Resources visionaries and social scientists than could be included in the sessions I attended. While one can see how such a model would deliver benefits to Capital in the form of reduced expenses – one is hard put to see how it would satisfy all of the needs of Labor which many recognize as encompassing more than the receipt of a check. The thin construct that it delivers freedom and flexibility to workers is questionable. But you could test this with your next Uber driver.
Global Impact Sourcing
The two events I attended on this topic were, for me, the most engaging sessions I participated in. The first, a session on the Role of Impact Sourcing in Global Site Strategy, was a lively discussion led by Jon Browning, President of BPO Solutions.
Impact Sourcing is the term applied to an inclusive business practice that intentionally targets for hire those populations which, by virtue of their geographic location or socio-economic circumstances, have limited prospects for sustainable employment. The discussion pointed to the 50% unemployment rate among college graduates in Africa and the 33% unemployment rate among youth in Detroit as target populations. Other target populations include Native Americans and military spouses. The case study success stories presented were compelling and the business case argument – that the significantly lower attrition rate of workers drawn from the target populations more than offsets any additional ramp-up costs – was well defended.
There are obvious benefits to the outsourcing industry – currently under growing pressure from developed, self-protective economies – to invest in a range of initiatives that conserve human resources. And there is a certain pleasing symmetry in the idea that the digital revolution that has driven the disruption to so many workforces is the same force that enables work to be performed by a larger family of workers in a greater range of circumstances and geographies.
This session made a strong case that work being done in this area will grow in importance as we rapidly apply the lessons learned by its pioneers and that it deserves more attention from the industry.
GISC – The Global Impact Sourcing Coalition
I attended a breakfast meeting that featured a presentation by Sara Enright, Manager of Advisory Services at BSR, an NGO with 250 member companies that provide thought leadership and advisory services in sustainability.
BSR, with sponsorship from the Rockefeller Foundation, leads a collaborative initiative between buyers and providers called the Global Impact Sourcing Coalition. The Coalition seeks to increase the uptake of global sourcing practices in the supply chains of multinational companies and their vendors and to contribute to the body of knowledge that corporations can draw on to understand best practices and manage their own initiatives more effectively. The initial focus of GISC, which was formed in 2015, is to scale Impact Sourcing in the global BPO industry. IAOP, which has a longstanding commitment to Corporate Social Responsibility, is an Associate Member of the Coalition which has grown to include 30 members.
This was a lively discussion with a highly engaged audience which included representatives of companies who described their successes with Impact Sourcing. I found particularly intriguing the idea that target populations can include the long-term unemployed and the growing population of workers who are ‘informally’ employed. This pointed to a potentially effective way to advance the practice of Impact Sourcing in a BPO context, even in political economies that are drifting towards more protectionist policy proposals. Policy makers who misunderstand outsourcing or underappreciate its potential for contributing to sustained economic growth should be a key audience for the research results that the GISC will be communicating.
by Steve Sheahan, Sales Integration Executive, IBM