OPINION: Give the frog a chance!
Many of us know the parable of the boiled frog. A frog dropped in water too hot to live in will quickly jump out of it. However, if you put a frog in cold water and warm it slowly it will stay in so long that, as soon as it finds out that the circumstances have become hazardous, it is already in such a bad shape that it is not able to escape from its steamy demise.
Call me cynical, but with 30 years of experience of outsourcing, I am still amazed at the continuing lack of satisfaction of outsourcing contracts. This disposition seems to exist not just for customers but also with vendors.
So, it seems more than dumb to just bury our heads in the sand in hope that things will get better. But guess what: that’s just what most organisations do. As a big deal leader I can’t tell you how many ill-conceived RFP’s come across my desk. Even more frustrating is the fact that most vendors, like a herd of lemmings, relentlessly chase these deals regardless of the outcome.
In a desire to understand the root cause of this dilemma, I have embarked on an investigative journey. I sought to uncover some of the new ways companies are trying to solve the problems that exist today. So what did I find?
Firstly, yes, you’ve guessed it: the business wants value. However once procurement gets involved it seems everything is broken down into the lowest common denominator. Then someone forgets to add the value back into the process. To make things worse sales people are frequently too timid to challenge the customer: they convince themselves it’s a good deal – despite the high risk, low margin, and tenuous baselines (even after spending time and money on due diligence). More interestingly though, too few people are thinking about tomorrow. Too many relationships are set on a strategy that is based on yesterday’s paradigms. Therefore, as market conditions are continually changing, outsourcing models are not set to perform in current and future conditions. Is it any wonder why outsourcing can be so painful?
So let’s wake up! The needs of business have changed tremendously. Procurement and sales people need to be adding more value. They must understand the challenges faced and “the pain” at the various levels of management within organisations. Only then can they begin to solve real business issues.
In my experience, strong business skills and a change of mind-set are needed to make strategic partnerships work by customers or vendors alike. So we need to think differently. Only then, will we begin to make headway in realising the true value of outsourcing for all concerned.
Will things change? It remains to be seen. The question is, can we move value-based outsourcing? Big business is on the edge of a burst of productivity growth; outsourcing is a key tool to support the boom. Together, if we can overcome old issues and focus on the value the future looks bright.
About the Author
Michael Hurley is Managing Partner at RIiSE. He is a results-oriented IT executive with over 25 years’ experience in sales achieving significant large-deal success, and is passionate about the professionalism of sales and the benefits it brings in helping companies realise their business objectives. Michael recently completed an MSc in strategic sales, exploring Strategic and complex deal strategies and the extent to which a “value creation”-based methodology aligns to business effectiveness and enhances sales achievements. Previous assignments include IBM, HP, CGI Logica, Unisys Tech and Telco, Sectors: Travel and Transport, Life Sciences, Financial Services, Consulting.