Understanding the Technology Needs of the Company
In the case of IT outsourcing, it is very natural for companies to involve their senior IT managers in the global sourcing process. They understand the IT needs of the business, technology and project management; they are expected to learn to deal with providers.
Ron Kifer, CIO, Applied Materials, for instance, is in the driver’s seat of his company’s sourcing. He started off with sourcing IT services, and is now also sourcing HR and BPO services from third-party offshore players.
Kifer has the skills of software engineering, program management, operations and IT leadership. He also has the experience of having worked in disparate geographical markets — U.S., Canada, Asia Pacific, Latin America and emerging markets — and industries — aerospace, financial services, insurance and transportation.
Kifer has done well for himself and his company. He is seen as a transformational CIO, having used global sourcing as a key tool to transform his IT organization from an order taker to business enabler.
Yet, few CIOs make successful global sourcers. “A Gartner study shows CIOs still have an efficiency-focused cost-centric approach where the concern for short-term profits overrides the need to create long-term business value in an outsourcing relationship. Besides their provider selection skills are suspect,” says Sumeet Varghese, Country Manager-India, Human Capital Institute.
“If they [have a successful outsourcing relationship], it’s by luck, not because they knew how to select a vendor,” says Allie Young, Research VP for Gartner’s sourcing group.
This has to do with the fact that CIOs are often still not seen as a part of the business — they are outsiders who have to keep the IT engine running smoothly so that the others can do the “real” work.
Kifer agrees, “A critical success factor for a CIO is to get the CIO position elevated to peer status and get a direct report relationship with the CEO.”
“You need to get agreement from the CEO that you will get control of global IT budgets and global governance. If you don’t do that then you have a big challenge,” he adds.
Whether IT people are the best choice or not as global sourcers, more and more are certainly getting into it. After all, they do bring in the understanding of technology and project management, critical to the success of sourcing. But their teams will have to be bolstered with people who bring in an in-depth understanding of the business.
Raj Chaturvedi, for instance, is a senior IT manager at a footwear retail company. He is also a part of a six member sourcing team at his company, which has amongst its members subject-matter experts who bring in an understanding of the business.
Ability to Manage Providers
Few people in customer companies really know what goes on at the service provider’s end — what is the lowest price, what is the provider’s real attrition rate, what type of work is the provider really doing with other companies etc. Most often they have to depend on the service provider’s word on such issues.
A sourcing professional who has been on the other side and knows the “innards” of service providers is always a good idea to have in a global sourcing team. They bring in an understanding of what can and will work offshore, and how the company needs to approach the sourcing process to ensure its success offshore.
Soumitra Rathod, VP, IT Sourcing, McGraw Hill, comes from such a background. He has an inherent understanding of the offshore model — he spent several years as a programmer, project manager and business developer at various providers before getting on to the sourcing role at the other side of the table.
“A service provider background gives you an understanding of appropriate price points, how to get the highest quality at the lowest price, what really is the lowest price, at which point will the provider walk or start compromising,” he says.
While such people may not have an understanding of the business, they can use their provider knowledge to caution the businesses on the likelihood of success and failure of outsourced and offshored projects.
People like Rathod bring in a range of skills: Identification of geographies and partners, developing providers into partners, working through the internals of the providers, expanding relationships with the providers by identifying other processes to be outsourced, managing ongoing relationship, etc.
Soft Skills
No matter how skilled a person is in the hard skills, the gates of a global sourcing career will be forever closed to him unless he has — or is flexible to learn — a host of soft skills.
Clear communication, cultural adaptation and sensitivity, willingness to travel, capacity to take risk, ability to navigate through the internals of both the customer company and the service provider, are must-have skills. These are easily ignored, but can make or break projects. Ask any recruiter and he’ll tell you that “attitude” is most important; skills can be learnt.
Chaturvedi points to resilience as a soft skill that few speak about, yet one that is very important to have in a global sourcing environment. “Often the providers don’t have the right skills. But, if you complain about it, you will be seen as an obstructionist. You have to learn to make the provider deliver,” he says as an example of the resilience required to do the global sourcing job well.
