Robert Frazzini Flattens Some Outsourcing Myths
Important Details About Go! Session "Rightsourcing in a Flat World": Flat-worlders unite, and take a better-rounded view of your opportunity, Robert Frazzini told Go! Conference attendees this week. Yes, the world has created unparalleled ability to move work around the world, 24/7, to literally follow the sun in providing customer service, support and manufacturing. But outsourcing is not a strategy unto itself, he says. It’s only one newer way to get things done, and those who think of it as a panacea will be sorely disappointed.
Presenter: Robert Frazzini, managing director of eXtended Business Services, Deloitte Consulting
"It’s not about India. It’s not about reducing costs. It’s not about where you place those jobs, " he said. Frazzini’s approach is commonsensical, as it cuts through all the corporate romance of simply moving jobs — and costs — offshore. As with any business endeavor — and none more important than who does the work that has your company’s name on it — it’s a matter of thinking through fit and connections to the rest of the business.
Frazzini asked the audience how many had had contact with Dell customer service over the last year, and how many thought it had improved. Many hands went up to the first question, few to the second. Dismissing the current state of that customer service as sub par — "and Dell’s one of my clients" — he said the problem was clear. "They didn’t do the training they needed to do." That’s the number one problem he points to as the issue with doing outsourcing wrong — not applying the company’s usual standards of training, of measuring, of correcting, of changing — just because the jobs are being done somewhere far away.
Frazzini calls his approach "rightsourcing," a refinement of the various monikers given the practice over the last decade, including "target outsourcing," "strategic outsourcing," "transformational outsourcing," or something else. Rightsourcing really means mixing and matching key variables corporate managers deal with everyday, but often lose their heads about as they begin outsourcing:
- Talent access
- Growth and market entry support
- Flexibility
- Access to best-in-class processes
- Sustainable low-cost position
- Risk management
- Time zone advantage
As companies’ experience with outsourcing has grown, terms of engagement are changing. These are some of the key changes Frazzini notes:
- Way beyond India: Everyone who’s everyone has made the pilgrimage to Hyderabad and Bangalore. Now sophisticated alternatives can be found on every continent, from the Philippines to South Africa, from Latvia to New Zealand.
- Movement from all or nothing: Targeting specific kinds of work and timeliness that can best be outsourced ;
- Shorter duration contracts: Focused one- and two-year deals, allowing both targeted work and the ability to make sure companies have the right contractor for the right job;
- Introduction of tighter governance: Letting jobs overseas doesn’t mean letting the jobs go unsupervised. It’s the same accountability, with cultural, time and geographic twists on making sure the job is done right;
- Captive operations: Owning and managing workers in other countries allows a greater quality control, and it’s growing rapidly as companies buy outsourcing operations and build vast campuses of their own overseas.
In Outsell’s Opinion: It’s kind of like foreign travel. Travelers often remember the first time they set foot abroad, in the airline terminal, at the train station, on the odd-seeming street. Disorientation. That’s what "foreign" means. The traveler gets used to the difference, figuring out what’s really the same — labeled differently — and what’s really different. Then the negotiation of the newness begins.
Frazzini tells us that outsourcing is really the same, and his points, basic as they are, form a good checklist for companies making their first, or next-step, moves into hiring global talent. His sum-up phrase makes basic sense and is worth coming back to, again and again: "Outsourcing is really an extended enterprise tool, a way of looking at your company as one large supply chain."