Will someone please define transformational sourcing?
I was taught that transformation means change — any kind of change. Yet, in the industry’s rush to greater sophistication, transformation outsourcing starts to morph into a range of meanings. According to a brief search, the commonly used explanations of the term are as varied as they come. Check one option per category depending on your point of view.
Strategy:
(a) Does transformational outsourcing take a company to a new level of world dominance by moving to a new target operating model, gaining strategic competitive advantage? Or
(b) Do we mean that we are changing
the way delivery, operations, functions, workflow are meant to work?
Benefit:
(a) Does transformational outsourcing result in agreed business outcomes? Or
(b) Does it provide continuous strategic change and innovation?
Technology: (a) Does transformational outsourcing mandate an ERP implementation? Or
(b) Does it merely mean the installation of new enabling systems?
Approach:
(a) Does transformational outsourcing mean working together in a collaborative partnership? Or
(b) Does it mean giving one body —namely the consultant cum outsourcer — the power to manage all the changes?
Pricing:
(a) Is pricing structured to speed change? Or
(b) Are contracts “consulting led,” changing the economics of the deal for the provider (author’s interpretation)?
Based upon the plethora of commonly traded definitions, I am confused. Is transformational outsourcing a term used by providers to add class, tone and fee to standard “lift and drop” (or do you prefer the term traditional) approaches, or is it “fix,” deploying cadres of consultants and internal team members, and then “shift,” taking the new processes to a remote location for cost arbitrage? Enquiring minds want to know.
Are tower, function and process (prefixed by multi) synonymous?
The industry uses the nouns interchangeably. Multi is easy; it means more than one. But tower? Since when do companies organize by tower? Every organization chart I’ve seen aligns by business units or functions, not by tall structures. According to my training, functions are made up of a number of processes. So when we speak of multiprocess outsourcing, are we speaking about a number of interconnected tasks within a single function such as HR, or more than one corporate function? I’ve seen the terminology used both ways.
