Books “Turning Lead Into Gold: The Demystification of Outsourcing” Published in 1999 and now in its second printing, Peter Bendor-Samuel’s book shares the principles that make outsourcing work successfully and highlights how buyers and service providers can construct enduring, win-win relationships.
Turning Lead Into Gold: The Demystification
of Outsourcing "I think there is a world market for
maybe five computers.” In 1943 when Thomas Watson spoke those fateful words about the potential global market for computers, he did not appreciate that the world was on the brink of a technology-driven revolution in which he and his company were to play a starring role. Now in a new millennium, we face a transformation driven by the Internet, a technology that is certain to change the way the world does business. Information, money, and even services move across the planet with the click of a mouse. Business cycles that formerly required months now have been reduced to minutes in today’s e-driven marketplace. As we think about the implications of this new technology-driven revolution, it is clear that every organization faces an uncertain future with the pace of change placing an ever-increasing strain on senior managers. Faced with new dimensions of competition, organizations find that there is only time and resources to focus on what they do best. Most companies can’t afford the time or financial resources to concentrate on every function or process necessary to run their business. Yet, in this time of ever-increasing com-petition, low-cost operations and operational excellence in all facets of the company are essential now more than ever. To solve this apparent paradox, many organizations
have turned to the 40-year-old tool of outsourcing as the best way
to survive and even thrive in the nascent world of eBusiness. By
divesting themselves of their non-core processes, organizations
are able to improve the level of service, cut costs and free up
time and capital to concentrate on what is most important —
how they differentiate themselves and compete. As more organizations
work through the implications of this new world order, they find
no alternative — except to join the ever-growing ranks that
utilize outsourcing. The most successful survival tactic now is concentrating on how to create value and eliminate the other distractions. This is not to say that all the processes we need to ignore are not essential or that we can do without them. A non-core process is a necessary component of an organization. We cannot do without such processes as human resources, accounting or information technology. If we are to stay in business and prosper, they must be performed extremely well. However, because a process is important, that does not mean it is core. Core competencies are “the soul of the company,” according to C.K. Prahalad, a professor at the University of Michigan Business School, who coined the term in 1990. They include the skills and technology unique to an organization. They create the strengths that pay the bills and position a company to attack new markets. Outsourcing has become an accepted business tool because companies of all sizes and shapes have recognized that they can become more profitable, build shareholder value and stay on the cutting edge of change by turning over those other tasks to companies that consider them their core competencies. TINA: There Is No Alternative I was first introduced to TINA on a cruise ship during a business seminar given by a scenario planner from the Global Business Network. At dinner after his remarkable presentation, we discussed future scenarios most likely facing the world. He described to me a series of forces that he believes now give the world's major economies no choice but to open up their markets to competition. He called the combination of these forces TINA, an acronym, meaning, “There Is No Alternative.” I was immediately enamored with this concept and its implications to my profession of outsourcing; and I have unabashedly appropriated it. Organizations around the world face increasingly competitive markets. If they are to flourish, I believe they must adopt outsourcing in some measure. There is no alternative. No organization, however well managed or financed, will be able to cope as competitive demand for its cycle time (or the time it takes to respond to customers’ requests) moves from two months to two hours. The need to improve every aspect of an organization while increasing focus on its core processes is making outsourcing as foundational to competing successfully in the Internet Age as is access to the Internet itself. Outsourcing is the only tool available that provides the ability to improve operations while cutting costs and releasing capital and time, which can then be used on those core areas. For an increasing number of organizations, there is no alternative to adopting outsourcing’s principles. |
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2003 DRAY International Group
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