During the last few years, corporate acceptance of services globalization has seen dramatic upward movement. Almost every multi and trans national corporation has heard the clarion call, and is readily convinced of the benefits of globalizing and standardizing processes and technologies.
Yet, informed leadership at the top of the house may be missing. Executive management may latch onto the headlines, assuming that services globalization will quickly move the organization into the pantheon of corporate greats. Ensuring that the results do not disappoint requires the C-suite to understand the role it plays in designing, justifying and communicating the program.
The C-suite sets the tone and direction for changes in business models. Therefore, a working knowledge of the pitfalls of offshoring and outsourcing is critical to success.
How do the top traps stack up?
Ignoring the culture of the organization. There is no standard template for services globalization; what can be implemented successfully in one organization may prove infeasible in another. But there is a link between culture, solution and approach which is often ignored in the push to change the architecture of business-process delivery. Jack Welch’s vaunted “70-70-70” might be the right program for process-driven GE where Six Sigma is the common language, but wrong for a culture that values how people team together over process.
For example, organizations with a rigorously applied supply chain might find that implementing an integrated end-to-end outsourcing deal runs counter to a culture where internal transparency and measurement are applied at proscribed intervals. Or a corporation that places more emphasis on the value of the individual employee may find that the change-management investment required will be extraordinary compared to that of an organization that refers to staff as just so much headcount.
Building a central internal team with institutional knowledge that can Create solutions, source, manage and govern on its own is critical to successful services operations.
No rationale for implementation or line of sight other than cost reduction. Business lines ask: Where will the savings be redeployed? Will I be able to provide better customer service? Or get to market faster?
Business lines look for an end game from services globalization beyond expected cost savings. Transparency relative to the stream of benefits is critical to keep the corporation focused during the challenges of implementation. Otherwise, services globalization becomes just another initiative driven from the center, which appears to be a taking of business line support for the greater good of the organization rather than a better way of working.
Not establishing a program framework at the top. The statement in the strategic plan that demands support functions and business units outsource or go offshore is merely an aspiration, not a goal. Without clearly defined expectations for performance in the form of horizons and hurdles, reporting requirements and governance principles, business units and support functions are on their own when it comes to developing a business case, aligning interests with providers, and reporting progress.
The impacts of services globalization on risk, reporting, investment and corporate performance are far too critical to leave well meaning units to make it up on their own. At the very minimum, corporate leadership must give direction as to acceptable returns and cost reduction, inputs, business case structure, terms and treatment of stranded costs.
