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Apparently there is a new study by the Hackett Group that finds that while Business Process Outsourcing (BPO) is on the rise because of cost savings , outsourcing executives are generally unhappy with the innovation by suppliers. I will address some of these challenges in an upcoming talk at NESCON.
Here is the summary of the upcoming talk on October 6, 2008 at Marlborough MA.
Your organization has crunched
all the numbers and evaluated offers and signed the global outsourcing
contract. You are rather pleased with your efforts including involving your
internal users in the RFP, perhaps organizing a great global reverse auction
and concluding some great win-win supplier negotiations. Your CFO and CEO are
delighted with the projected savings that will come from executing the global
outsourcing contract. In fact your CEO (followed by your HR) proudly mentioned
that all displaced employees might be possibly absorbed in other parts of the US organization,
avoiding layoffs. This would be possible
as global outsourcing will reduce costs and many more new product development
and innovation projects might be speeded up –substantially. More and speedily
developed new products for global markets would actually mean more jobs in the US organization!
You knew that global supply chains were the way to go….
Two years down the line you find
that the envisaged contract volumes have not emerged. The suppliers are complaining,
your internal organization had changed with the outsourcing contract, and it’s
difficult to find the people who knew what was going on in the first place. The global innovation engine is moving much
slower than expected.
Check out the program here. Should have some interesting feedback.