Tuesday, November 24, 2009

Playing “safe” vs. The Whole Nine Yards

A dilemma that many first-time buyers of global services face is whether to take small steps into outsourcing or dive right in. Many end up putting in minimal effort, which results in failure. What this says to me is that although they know it will be successful, they don’t want to go full throttle because it isn’t easy to do so. No CEO is interested in spending time on just the small stuff and it ends up in a self fulfilling prophecy where you go in putting little effort because you think you might fail, and you do end up failing because you didn’t put in enough effort!

An ideal way that works both for the buyer and the supplier is to go ahead with one process, Finance and Accounting for instance, and as soon as you start seeing results, move forward and get all your ducks lined up for the next phase and so on. That’s what most companies do. Frankly, it keeps the supplier on their toes because they know there is no chance of getting the next scope of work, unless they deliver on the first phase.

The industry has seen clients who’ve doubled the services they have globalized every year for 5 consecutive years. The only way you do that is by adding more and more scope through success.

Speed is all that matters!

Over the years, a basic pattern I’ve noticed in partnerships that don’t work is that people often tend to spend too much time up front in the selection process and too little time, later on, in the process of deciding how you want to take the partnership forward.

Let me explain. Once a company decides, broadly speaking, that they want to enter a partnership with a firm that provides global services, they typically spend 6 months talking to 10 different suppliers to zero in on 2 final contenders. Then, they spend 6 more months deciding between the two!

This is a real waste! The way it should work is that they should quickly figure out who the provider will be and then spend as much time working with the provider to create a roadmap of ensuring how the partnership will work and how it will be successful.

Take the example of Google -- they launch products almost as soon as they think them up! This works because they let the users find out for themselves what's working and what isn't and then go back in and fix the bugs based on user-feedback. Putting the word 'beta' on these products / applications lets the users know that hey, this is new and I'm allowed to play around and give my feedback -- which, in most probability, will get actioned on. This is fantastic! In contrast are other organizations who invest months, sometime years in products and then perhaps even more time figuring out what's wrong with them.

What typically happens when it comes to partnering with organizations that sell global services, you’re take 6 months to go from 10 to 2 and another 6 months to go from 2 to 1, that’s a year gone by already! So what ends up happening is that the Board starts putting pressure to get the relationship going and you jump right in, not thinking through the roadmap and not spending enough time figuring out how it will be successful.

What I would do is decide quickly who the provider will be and put them up to a test by asking them to come work with me on a project and help create a roadmap that will work for both. Most buyers just create a plan and hand it over. That's not the right way.

Collaboration is the trick to a successful partnership. More about Collaboration later.