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Into its Own: Sourcing as a Profession
If you believe IAOP, 2008 is considered as the year of the Chief Sourcing Officer. The demand for sourcing professionals outstrips supply. Where will the talent come from?
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Also known as “boundary spanners,” the (out)sourcing professionals are in demand post market slowdown. With the markets hitting the new lows and the economic pressure mounting on the U.S.-based companies, offshoring has gained more relevance for them to get cost-related benefits. In past, we did a story on what skills these sourcing professionals bring to the outsourcing table. But now the key questions are: How are such professionals groomed; how much interest do organizations take to hone the skills of these professionals; what is the eligibility criteria to be a sourcing professional and such?

Sourcing professionals play the key role in making sourcing engagements work. They are the single-point contact for the provider within the customer organization. How different are these professionals from the managers in the other portfolios? “Outsourcing management requires lot of relationship management, skills for managing and influencing multiple constituencies and day-to-day interactions with the provider. The management of an outsourcing relationship is also getting more strategic,” distinguishes Ajay Sharma, Professor, The William Davidson Institute, University of Michigan. In addition, one of the key differentiators is that a sourcing professional not just manages people but also the outcomes.

Who Are They?
They are the professionals who have to handle the most challenging transition that is from being a doer to one remotely managing a team of doers in another country. Managing such a role requires the development of skills in partner management that are different from leading an operations team internally. This is because managing deliverables is quite different from the process of delivery. Skills are transferable to a point, beyond which people have to be comfortable in the new role. Training would help in some areas, but not all. The other point is that the generalist can’t hold on forever — sooner or later domain-specific specialists would come to play larger roles.

Companies that have outsourced or offshored to leading service providers also complain about shortage of talent at the service provider end in terms of the quality of skills. This means that the issue of development of global sourcing skills is as severe for the service provider as the companies that seek the services. The uppermost questions are: How should they be trained; what skills should be imparted; is there scope for standardizing management talent for outsourcing?

Michael Corbett, Chairman, International Association of Outsourcing Professionals (IAOP), admits that it is a long way before qualifications and skill sets for global sourcing reach standardization, but professes to have made some progress in that direction. “We are beginning to move in the direction of developing standard methodologies, common lexicon, and a standard body of knowledge in the area,” said Corbett. Till then, some of the good old career strategies like going a step outside one’s comfort zone, developing multifunctional skills, developing relentless flexibility to be able to deal with the unexpected, amongst others would help professionals grow to leadership positions in the industry.

According to Deborah Kops, Chief Marketing Officer, WNS Global Services, it takes time for a company to realize that they need a global services-management function. Kops likened it to an investor in one company’s stock and another one with multiple companies — the latter one would need a portfolio-management approach to maximize returns. Similarly, multiple projects that would require a transition from project to program, would drive the realization for a global services-management function.

How Do We Get Them?
Sourcing advisory companies would be a good place to hunt for sourcing talent. “Some companies are looking at advisory firms such as EquaTerra, TPI to help them through this process. One way is to insource these skills from the advisory firms. Secondly, some companies are turning to providers for some specific training such as Six Sigma and Lean. These trainings help them understand what process engineering is all about. Interestingly, some companies are even hiring sourcing managers from these advisory firms because they would have seen things from both the sides — the service provider and customer perspective,” adds Sharma of University of Michigan.

Apart from hiring these professionals from either advisory firms or the service providers, companies also recruit professionals who might not understand outsourcing as a function, but have a fine understanding of the services that are required to be sourced. For instance, in the case of sourcing IT services, from customer-side a manager with understanding of IT can also be an eligible sourcing professional. It is imperative that a sourcing professional should not only have the understanding of the services to be sourced but also extensive relationship management, project and program management, skills and the orientation to managing outcomes.

“Currently, there are two schools of thought. First is a traditional shared services function in an organization where they look at the opportunity to outsource and offshore certain routine services and processes. Then, there are other companies where outsourcing is done within functional areas such as Finance, HR and IT. In the latter, organizations follow hub ‘n spoke system to derive outsourcing from the existing infrastructure model,” said Ramesh Krish, Director, Global Strategic Sourcing, Amgen.
 

Thus, it is clear that procurement is a part of outsourcing and the vice versa is not true. In the second case, the hub ‘n spoke model is more centrally- led than functionally- led. A lot of other companies are trying to incorporate Centers of Excellence (COE) within their organizations. These COEs serve as centers of expertise on specific areas and provide best practices. In such a model, “people that have the requisite core skills can easily migrate to this work environment.  Their prior backgrounds could be in process or management consulting with industry or function specific(HR, Finance, IT)  specific subject matter expertise and domain knowledge.”

 

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