As the outsourcing industry matures, we’re witnessing fundamental transformations in how client organizations define their objectives, select providers and negotiate contracts.
The skills required to be an effective outsourcing executive are similarly undergoing a sea change. The traditional model of outsourcing was all about following orders: “Deliver x for y according to z.” The executive’s role was to ensure that a clearly defined process was strictly adhered to – think of a good cook who follows an elaborate recipe to prepare a meal. Today’s buyers, faced with a rapidly changing market, don’t always know what they want. They may have an ultimate goal, but they are uncomfortable being too prescriptive knowing that there isn’t one specific “recipe.”
In today’s emerging environment, sourcing executives need to have the skills of a “chef” – someone who knows the cookbook but has the creativity to go beyond the recipe and take a set of ingredients, look at the landscape and consider the alternatives offered by the marketplace, and create something that addresses the overarching business objective. To do this effectively, the sourcing executive needs to not only know sourcing processes (how to cook), they need to know about the emerging opportunities and solutions in the market (what to cook).
In addition to moving from clearly defined processes to multiple alternatives and ambiguity, the transition from cook to chef involves moving from generic sourcing and process expertise to industry specialization, where procurement skills are a competency rather than a job description. Outsourcing executive skills must also evolve towards collaboration and mediation, as sourcing management will focus on brokering business between buyers and sellers. Facilitating open relations based on trust and minimizing risk will be paramount. And, as speed becomes increasingly important in a dynamic and innovative market, price won’t always be the top priority.
To take the food analogy a step further, today’s outsourcing executive is like a chef in a restaurant under new management. He still has to offer the perfectly done steak that made the restaurant famous – the traditional skills needed to negotiate a buttoned-up contract and optimize a discrete operational tower. At the same time, he needs the ability to respond to new orders and new expectations, to demonstrate creativity, to be open to new possibilities and offer alternative solutions. In this sense, sourcing executives need to engage with providers, business leaders and advisors to craft a winning menu.
I’ll be discussing cooks, chefs, menus and the changing role of the outsourcing executive during a breakout session at the upcoming Outsourcing Institute’s BPO Innovations Conference on November 13th in New York City. This day-long event will bring together industry leaders to discuss emerging trends, technologies and opportunities. I hope to see you there.
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