In 2015, the Joint Economic Committee of the United States Congress reported that the fashion industry globally is valued at $1.2 trillion. (Ref. 1) Of that $1.2 trillion, more than $250 billion is spent annually in the United States alone and this number continues to grow. Current reports show that the retail value of the apparel and shoe industry in the USA was valued at almost $360 billion (and counting) in 2015. (Ref. 2)
In this day and age, there is no organisation that does not require outsourcing governance as a part of its operations. It could be critical or a support function, but outsource they all do.
What is intended to be a seamless transition of work and, in some case, part responsibility, in fact, becomes fraught with challenges. What should’ve been an easing of the load for the outsourcing organisation becomes a point of stress and could even lead to lower productivity because of duplication of effort or lack of harmony.
Not too long back, many global IT service providers were known to move delivery of IT services of their clients to offshore locations (like South Africa, Latin America or India) without informing their clients. This was seen as an internal lever to make customer contracts more profitable in a multi-year deal as services were first stabilised in a high-cost onshore delivery location before being shipped to an offshore location.
Multi-supplier service is all the rage, together with its linking agent Service Integration and Management (SIAM). Wonderful in theory... How does one practically get multiple parties to collaborate towards a common end?
Experts agree it’s too soon to say what the mid-term effects of Brexit are going to be on the UK and European economy. Despite early signs of business and consumer confidence shrugging off doubts, we can surely all agree that we’re about to go into a period of major, structural change for the UK and the rest of Europe - which suggests the best response strategy business leaders can have is maximum flexibility.
The formation of a good sourcing agreement relies on clear thinking and agreement between the parties on what is to be done, why and how. The market and technology are changing so rapidly that the next agreement is likely to bear little resemblance to the last. How to make sure we ask the right questions and not just the obvious of the suppliers and ourselves?
Your mess for less
In days of old, when suppliers were big, profitable and mostly American, the questions to be asked to define what a customer wanted of a new service addressed aspects such as:
From 25 May 2018, a new European General Data Protection Regulation (the “GDPR”) will apply and change the rules applicable to businesses that process “personal data” such as customer and employee data. Organisations will need to consider implementing new procedures in order to comply.
Just when multi-supplier (also known as SIAM) contracting is starting to get under control, DevOps emerges. This article looks at the interaction of the two for the design of retained and sourced IT operations. The implications for service contracts are profound and largely un-tested.
Professor Horacio Falcão, a Senior Affiliate Professor of Decision Sciences at INSEAD, warns companies should not start – nor necessarily end – on “price” when it comes to negotiations.
Falcão has written on the concept of value for several years and his work includes the 2010 book Value Negotiation: How to Finally Get the Win-Win Right.
Europe is in turmoil after Great Britain’s vote to leave the European Union. Those who now claim to know what will happen now – in outsourcing or in other areas – will make two big mistakes: First, they will show that they don’t understand what Brexit is. Brexit is, to use the words of author Nassim Nicholas Taleb, a “black swan”: an unexpected event with largely unforeseeable consequences, just like 9/11 or the Lehman Brothers bankruptcy filing. Second, they will simply be wrong.