What Outsourcing Industry Trends Are You Most Thankful For?

by Pillsbury Global Sourcing Practice
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authors: Brian R. Bodor, Benjamin M. Dean, Joshua Konvisser, Aaron M. Oser, Glenn S. Richards, Roger C. Roy Jr.]

As the Thanksgiving holiday approaches, we are all juggling a whole host of "to-dos", such as working out family travel logistics, making sure the turkey is thawing, and shopping for all of the "fixins". Many of us are also starting to contemplate our impending consumption of too much turkey, stuffing and pie. Yes, we know everyone tries to be strong and resist temptation, but we generally just give in. Fortunately, we can all take solace in the fact that calories consumed during a holiday don't count as much as non-holiday calories - well, at least that is the wise advice I got from my Aunt Simone (which, by definition, makes it a "fact").

Thanksgiving is also a time when you can sit back and think about those things you are thankful for. In this blog, we decided to reach out to our Pillsbury Global Sourcing group to find out what outsourcing industry trends they were thankful for. Here are a few responses mixing outsourcing trends with Thanksgiving themes - enjoy:

1. We are finally addressing the "messy middle". You might be misinterpreting this item to be the state of your stomach following dinner. Actually, this refers to IT service integration that is required to align service delivery among multiple players typically found in an IT environment. We refer to the service integration layer as the "middle", because it usually sits between leadership and service delivery execution. We also refer to it as "messy" because most IT operations are at very low maturity levels in optimizing their service integration capabilities. Implementing a successful service integration framework can be difficult, time consuming and challenging. That said, we are thankful that many of our clients recognize harmonizing the activities of internal IT and multiple of third party providers is critical if they want to be in a position to mitigate operational risk, promptly address incidents and maximize efficiencies in their environment.

2. The trend away from asset-heavy deals. It used to be that the price point of technology assets meant that if you outsource your operations, you had to deal with what to do with all those big assets (think facilities management deals, or more recently, termination for convenience costs full of "stranded asset stuffing"). With hardware costs continuing to decline, those asset costs are becoming less of a headache for customers who can retain the assets and structure more straightforward and flexible services-only deals. With less asset issues to digest, customers can tighten the belt a notch and be more efficient in their sourcing decisions.

3. Chef's still matter even if you've hired a cook. Our clients (the owners and executive chefs) who are more satisfied with their suppliers (cooks, chefs, sous-chefs, etc.) understand that they have to be active, hands-on participants and managers in and of the services that they receive from their suppliers. We encourage our clients to actively utilize their contractual rights, not to "game" the system but to ensure that they are receiving the value that they expect from their strategic sourcing relationships. We're finding clients are recognizing the value of their contracts as effective management tools and getting better outcomes as a result. That doesn't mean stepping in and cooking the meal, but it does mean active participation in the receipt of services to allow customers to identify surprises early and to bring an end to problems quickly, before they fester and risk develop into issues that could endanger the strategic relationship.

4. It's worth the upfront travel time. Sometimes, sitting in traffic on Wednesday afternoon to get over the river and through the woods to grandmother's house is a much smaller price to pay than having grandmother staying in your house ... especially if she extends her stay. We are seeing companies begin to recognize that they will need to incur an up-front transition cost in order to enjoy longer term savings. There is less appetite on the supplier side to simply finance the transition costs through the deal, and that can actually be good for customers. If the cost of transition is funded through the unit rates in the deal, and the deal is renewed, you keep paying for the transition even though the supplier has long since been made whole.

5. Sourcing strategy really matters. Just like in outsourcing, deciding what parts of your Thanksgiving meal to cook and what parts to buy is critical. Turkey is an obvious example. Who wants a precooked turkey? Cooking the turkey is of strategic importance for the holiday as it not only makes the meal, but it fills the house for hours ahead of time creating anticipation that heightens the entire experience. Now cranberries are another story. I've always found canned cranberries, either the jelly or the whole cranberry kind, to be perfectly fine - an opinion reinforced the one year we decided to insource cranberries sauce preparation and they literally "exploded" on the stove. Cranberries are permanently outsourced. So prepare your menu, choose your sourcing strategy wisely and enjoy!

6. BYOD (Bring Your Own Dessert...um...Device). There is an increasing multitude of wireless devices, carriers, applications, services and operating systems among family members. Wireless is an integral part of a comprehensive telecom solution, and while all of these wireless options have made life unduly complicated for IT staff, resistance is futile (the kids are all going to have wireless devices) and clients are beginning to set rules for BYOD rather than limiting choices. End users will bring their own devices to the table (even during meals), a comprehensive proactive strategy and rules of the road will make for a more enjoyable mobile experience (and maybe even better conversation).

7. Finally, it's time for Dessert. To close on this Thanksgiving holiday blog, here are a few new Thanksgiving outsourcing terms and phrases (remember, you heard them here first):

  • Don't get a "turkey of a deal," so please be sure to conduct due diligence in advance of signing;
  • "Tofurkey" means the act of toe dipping in cloud computing with funky lurking legal issues to address;
  • RFPs (Really Fantastic Pilgrims searching for the best place to land); and
  • Thanksgiving Incumbents (don't be the Guest that maybe should leave sooner).

On behalf of the entire Pillsbury Global Sourcing group, we wish you a happy and healthy Thanksgiving holiday.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pillsbury Global Sourcing Practice | Attorney Advertising

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