What is the common denominator for success in global sourcing?

Senior executives have the strategic intent to improve business. But, this has to go down one level below to the functional or operational heads because they are in charge of running the business on a day-to-day basis. And these are the people most concerned about change. Some people are natural change leaders and at the opposite end you have people very resistant to change. It reflects directly on their level of confidence. The ability to enroll these people to the organization’s global sourcing decisions is the key.

So what was it at Fifth Third Bank when you came in?

I worked for the chief operating officer who was responsible for IT operations, program management, Lean, Six Sigma, and sourcing. He brought in favorable experience with offshoring. That made him the leader, the champion. And when such a senior leader talked about outsourcing and offshoring, it brought in a certain amount of credibility. The senior management sponsor will have to go through the process of explaining what is being planned, why we are doing it, who will be impacted and what do we plan to do about it. Credibility alone would not work.

LINDA TUCK CHAPMAN

What was your mandate when you came in as the sourcing leader?

Fifth Third Bank is a supra regional bank and outsourcing is a fairly new practice. Our first brush with offshoring was in early 2004. It was my responsibility to make offshoring of IT function a reality.

But shouldn’t it be the responsibility of the CIO to look at IT offshoring?

The CIO’s job is to run the IT function. It is his responsibility to decide what goes and what doesn’t. My job is to run the sourcing function to align with the organization’s strategy. I had the program management office responsibility for IT offshoring which included vendor identification, drawing up the contracts, project planning and monitoring. We were very careful about the messages we gave to employees and our intent was to grow the business even as we retained the staff. We have done all of our offshoring with almost no layoffs. So our software development process moved from dedicated resources to offshore in a reasonably short period of time. Then we turned our attention to BPO in early 2006. The transition was easy.

What role does the functional head play?

It is always their decision at the end of the day. We provide the resources and the framework to do this better. I am an internal consultant and cannot run the business for them. The functional heads need to decide how they want to free up resources and redeploy them. Everything we design is within the business strategy and we are never ahead of it. Outsourcing and offshoring is not a business strategy; it is a practice if the business strategy demands it.

Your group is called Global Sourcing. Is it a service provider to the rest of the organization?

Not at all. In the case of IT outsourcing, the CIO and COO are my business partners. Our client is the senior executive team that ultimately runs the bank and represents the interests of the shareholders. In that sense, we are not service providers but business partners. The point is that global sourcing is a business function by itself; it’s not a service like marketing and finance are not.