published by the magazine driven by & for … · the magazine driven by & for the...

PULSE FAST COMPANY

HOT SPOTS

FRESH FACES

A political debate: Outsourcing professionals weigh in p14-15

Discover why Mother Africa is one Hot Mama p26-27

Real Time with CBRE’s Bill Concannon p42-47

ISSUE 02 | NovEmbEr / dEcEmbEr 2012 ThE MagazinE DrivEn by & for ThE oUTSoUrcing ProfESSionaLpUblIShEd by www.IAop.orG

forEcaSTS& TrEnDS What new directions are we heading in? Pulse delivers the wake up call.

PLUS Practical Advice: Three Knowledge Center stories to learn from p30-37

© Ca

n Stoc

k Pho

to Inc

.

2 PULSE November/December 2012

PULSE ISSUE 02 | NovEmbEr/dEcEmbEr 2012

f o r e ca s t s & t r e n d s e d i t i o n

FAST COMPANYPulse is taking it to the polls:

Who really wins?p14-15

A wake up call: winds of change are coming!

p16-25

FORECASTCorporate Real Estate CEO

Bill Concannon Keeps it Real p42-47

FRESH FACES

f u rt h e r r e a d i n g

Latin America Summit Wrap-Up .............................................................. p10-11

Outsourcing in its New Avatar .................................................................. p12-13

Hot Spot: Africa .......................................................................................... p26-27

Beyond Cost ............................................................................................... p38-41

ThE MagazinE DrivEn by & for ThE oUTSoUrcing ProfESSionaL

PULSE POLL

t r e n d s & f o r e ca s t e d i t i o n

r e g u l a r f e at u r e s

Letter from the CEO ................................................ p5

Pulse Contributors ................................................... p6

Taking the Pulse ....................................................... p7

The Beat: News & Commentary .............................. p8

The Sandbox ........................................................... p28

Joining IAOP: New Members & Benefits ......... p48-49

Pulse Roundup ................................................. p50-51

Pulse Professional ............................................. p52-55

Pulse Flash .............................................................. p61

For The 2013 Outsourcing World SummitPhoenix, Arizona Feb. 18-20, 2013

p50

WARMING UP

KNOWLEdGE CENTER TRIFECTAAvoiding IT Service Contract Pitfalls ...... p30-31

Proactive Remedies ................................. p32-35

Human Side to Outsourcing ....................... p36-37

© Can Stock Photo Inc. / dndavis

PULSE November/December 2012 5

WELCOME TO THE FORECASTS& TRENdS ISSUE OF PULSE! As I write this message, the seasons are changing in my part of the world. With the U.S. presidential election ahead and ongoing global economic woes, we’re seeing varying opinions here at IAOP about what the winds of change will bring in the coming year. While we don’t yet know who will be elected and exactly what that will mean to the industry, I can say with certainty that outsourcing is here to stay and that’s a good thing - for jobs, taxes, the global economy and society at large. We’ll be joining with the National Outsourcing Association (NOA) in spreading the word on a global basis that “Outsourcing Works” and collaborate to change our profession’s sometimes negative image. You’ll see a focus on this at The 2013 Outsourcing World Summit. More information will be coming about this and I encourage you all to get involved as it will make a difference. As CEO of this association, I see examples every day of the good that outsourcing brings. In our “View from the C-Suite” story, you’ll hear more about the CSR practices of CB Richard Ellis (CBRE) from CEO of Global Corporate Services William

Concannon. Bill has been recognized for his contributions to outsourcing and society at large as a member of our Outsourcing Hall of Fame, and CBRE is the winner of the inaugural Global Outsourcing Social Responsibility Impact Award (GOSRIA). There’s plenty that can be learned from these positive examples. I witnessed the good works of outsourcing being spread in Latin America at our recent Latin America Outsourcing Summit in Brazil with professionals from many different countries coming together to see how they can collaborate across borders. If you missed it, you can check out some of the photos in our Pulse Flash. Outsourcing also is positive for emerg-ing destinations. In our Hot Spot on Africa, you’ll read about how many countries are poised for future growth from outsourcing. There’s no doubt outsourcing is good for professionals and their careers. We see the value IAOP’s corporate and profes-sional development programs bring every day. Companies are spending wisely and want to invest in the best individuals. The credentials that come with being a Certified Outsourcing Professional (COP) enable professionals and their

organizations to show their worth, especially when economies are tight. Outsourcing flourishes by sharing best practices and thinking. In our Best of Knowledge Center, you’ll find stories based on presentations from some of our global chapters. Our chapter network continues to grow and we’ll soon by launching a new Guidance Counsel of chapter chairs to help set standards and serve as a resource for new and existing chapters to continue to raise the bar on our collective thought leadership. Our forecast and trends story is always one to follow, and we’re proud of our track record of predicting what will be important. Thanks to our many members and thought leaders for gazing into the crystal ball for us and sharing their outlooks for 2013, views on politics and more. My prediction is that 2013 will be another good one for outsourcing, IAOP and PULSE because of you!

DEBI HAMILLCeo IAoP

will political elections take outsourcing in a new direction?

if so, where are we heading?

CEO’S DESK

we are delighted that cops will be facilitating our new Advanced Track at The 2013 outsourcing world Summit in phoenix, Arizona, Feb. 18-20. read our pulse professional section for the latest on the cop program and see pulse round-up for new additions at the Summit.

PULSE CONT

RIBUT

ORSn ov e m b e r / d e c e m b e r 2 0 1 2 i s s u e : 0 2

PUBLISHER

IAopdebi hamill, CEO EDITOR-IN-CHIEF

Sandy [email protected]

MANAGING EDITORJag dalal, [email protected]

PULSE BLOG EDITORKate [email protected]

MANAGING DIRECTORKim [email protected]

CREATIVE DIRECTORpamela Zarrella

EDITORIAL BOARDmichael F. corbett, Chairman, IAOPmatthew p. Shocklee, COP, Managing Director & Global Ambassador, IAOP John hindle, Outsourcing Marketing, AccentureNeil hirshman, COP, Partner, Kirkland & EllisEugene Kublanov, COP, Managing Director, KPMGpradip Khemani, Director, Blue Shield of Californiacara Koppenhoefer, Manager, Humana

ADVERTISING renee [email protected]+1.845.452.0600 ext.109

CONTRIBUTIONSPULSE welcomes contributors! Please email: [email protected]

IAop2600 South Rd. Suite 44-240Poughkeepsie, NY 12601+1.845.452.0600

This publication (and any part thereof) may not be reproduced, transmitted or stored in any print or electronic format (including but not limited to any online service, any database or any part of the internet) or in any other format in any media whatsoever, without the prior written per-mission of the publisher. IAOP accepts no liability for the accuracy of the contents or any opinions expressed herein.

lUcy hErlAAr Trainer of people and pets. A consultant, trainer and coach

on the human side of outsourcing, she lives in belgium where she

also trains dogs.

TUE GoldSchmIEdING An attorney at Gorrissen Federspiel law firm in denmark

specializing in Ip and technology. As a new father, he can be found up late at night reading contracts or changing diapers.

olE horSFEldT A partner and vice president of Ip & technology at Gorrissen Federspiel, who participates in triathlons,

and marathons when he isn’t working on complex IT contracts in outsourcing.

NIlANJAN chAUdhUrI An engineer who heads global marketing for Aditya birla Group, he appreciates the role his

generation plays in creating today’s tech-nology and enjoys reading and writing.

KUlwINdEr SINGh Speaker and writer on market messaging and

branding. A member of the advisory board of cmo council India,

he enjoys football and badminton.

JørN w. rASmUSSEN brings real-life experience to writing outsourcing

contracts. when he’s not busy influencing the danish outsourcing industry,

he enjoys collecting different artifacts.


“Today’s shared services skill sets are becoming more about the future of management and a career path that is about being able to create and sustain organizations and third parties in a cohesive manner ... This leadership isn’t just in accounting or paperwork, for example, but for leaders in a new management category that some have termed the Chief Integration Office.” – guest bloggers on “Buddy Can You Spare some Talent” Rick Bertheaud and Bryan Furlong of KPMG

f e e d bac k a n d c o m m e n ta ry f ro m t h e p u l s e c o m m u n i t y

taKing thE

pulSE

We welcome guest bloggers. Join the dialogue at iaoppulseblog.blogspot.com[

pUTTING INTEGrATIoN INTo ThE c-SUITE

In their blog, “Buddy Can You Spare some Talent”, on Sept. 13, guest bloggers Rick Bertheaud and Bryan Furlong of KPMG, coin CIO as “Chief Integration Office.” They write: “Today’s shared services skill sets are becoming more about the future of management and a career path that is about being able to create and sustain organizations and third parties in a cohesive manner. It’s about building a global brand with extended global business services. What you learn managing all the pieces and parts of a shared service center for accounting, is readily applicable to managing a service center for pharmacovigilance or R & D. This leadership isn’t just in accounting or paperwork, for example, but for leaders in a new management category that some have termed the Chief Integration Office.”

KEEp ThE NAmE

Responding to a blog “Change the Rhetoric or Change Our Name,” our readers say educating the public on “outsourcing” versus “offshoring” is needed – but some things don’t change easily. “I’ve seen many debates lately about dropping the term “outsourcing.” While the word still has a negative connotation, I don’t necessarily agree with dropping it

and replacing it with words like ‘sourcing,’ ‘managed services,’ and ‘right sourcing.’ You’ve made an excellent point that outsourcing isn’t always offshoring. But to those not in the business I feel they will never understand or agree. I’ve been doing this for close to 20 years and it hasn’t changed,” writes James Westwood.

Thanks readers!Thanks to denis perron of montreal, canada and all the others on the positive feedback to our launch issue. we love hearing from you and getting your inputs on pUlSE magazine and blog.

please keep the comments coming.

LETTERS TO THE EDITOR

Send Pulse letters to [email protected].

comING NExT ISSUE IN pUlSE: Preview to The 2013 Outsourcing World Summit with a special print edition distributed at the Phoenix, Arizona Show. Plus, a look at highlights of the Certified Outsourcing Professional (COP) program, Europe as our Hot Spot and ITO is featured in the Verticals section. Don’t miss it! To contribute to these stories, contact: [email protected]

Denis writes:

dEAr pUlSE TEAm,

What a professional magazine! It gives us a quick review of what is going on in outsourcing. It assembles multitude of emails and info. This is an excellent initiative. I will make sure to read this magazine when published.

SNEAK prEvIEw

The Pulse blog offered an inside look at “The Moral Case on Outsourcing: How Good, Bad, or Ugly is it for America and the World?” by Scott Phillips. “Outsourcing is widely reviled as a cause of job loss. But by allowing companies to preserve businesses that would otherwise fail—to reduce costs and remain viable in the face of competitive threats—it also results in companies surviving and, therefore, jobs being saved,” he writes.

Be a guest blogger. Shout it out at: http://iaoppulseblog.blogspot.com/


IAOP’s Director of Thought Leadership Jagdish Dalal closely followed the headlines relating to outsourcing and the U.S. elections. During the campaign, some positions and opinions expressed by candidates were based on few facts and realities, he says, examining two stories on different sides of the issues.

© Ca

n Stoc

k Pho

to Inc

. / na

sir11

64©

Can S

tock P

hoto

Inc. /

wac

ker

ThE NEwS hEAdlINES ThE IAop dISh

or lIFTING US Up?

A careful reading of the article points out that globalization and capital maximization are directly related. According to the author, shipping jobs overseas promotes globalization and acts to lift the economics of “third world” countries and at the same time, free up human capital in advanced countries for other work. The article also challenges the thinking that the local economy suffers as a result of such offshoring action and, therefore, is not a solid platform to criticize Mitt Romney and Bain Capital for shipping jobs overseas.

IS GlobAlIZATIoN brINGING US dowN?

JULY 10, 2012 THE ECONOMIST: TAKE THIS JOB AND SHIP IT

This story deals with the topic of outsourcing and its impact on “globalization,” examining quotes from Nobel Prize winning economist

Paul Krugman. “First, I think the process of globalization, which has moved billions of people out of dire poverty, is worth defending loudly and proudly,” the author writes.

loNGEr TErm vISIoN NEEdEd

The story correctly points out that the globalization is not necessarily a primary cause for unemployment and that the impact on workers from the inevitable globalization must be dealt with as a separate issue rather than attacking globaliza-tion. It points out that the impact of globalization is felt less in some of the European countries because of their national human protection net of health care and welfare support. A higher level of support in educating displaced workers in competing globally is another way to benefit from globalization. The steel industry is a good example of how U.S. companies have battled and come back from the dead by leveraging and learning from globalization, Dalal says.

ShorT SIGhTEd polITIcAl plAy

JULY 10, 2012 NEW YORK TIMES: THE FOLLY OF ATTACKING OUTSOURCING

The story looks at the net impact of globalization – more convenience, cheaper goods and greater efficiency - and tackles the issue of the impact on

workers – especially in the U.S. “Hewing to the standard anti-outsourcing playbook may gain a few votes in November. But American workers need more. They need a set of policies that gives them a stake in the fruits of the more prosperous global economy that globalization can bring,” the author says.

The Beat / NEWS & COMMENTARY AS COvERED BY JAg DALAL

THE 2013 OUTSOURCING WORLD SUMMIT

JW Marriott Phoenix Desert Ridge | Phoenix, ArizonaFebruary 18-20, 2013

Produced in association with FORTUNE® Custom Content

Build on the Past. Manage the Present. Step into the Future.Gain insights from more than 100 inspiring speakers and network with over 800 industry professionals at IAOP’s annual event, The 2013 Outsourcing World Summit and take your outsourcing relationships from good to great.

Register now at www.IAOP.org/OWS2013 for EARLY BIRD SAVINGS!

C

M

Y

CM

MY

CY

CMY

K

OWS13 Ad_PULSE.pdf 10/17/2012 9:22:52 AM

© Can Stock Photo Inc. / dndavis


they came from peru, chile, argentina, costa rica, colombia, guatemala, mexico, france, nicaragua and the u.s. to learn and network with industry leaders and fellow outsourcing professionals, and went away with new know-how, connections, ideas and inspiration.

brazil hosted the hottest ticket in town: the 2012 latin america outsourcing summit

© Ca

n Stoc

k Pho

to Inc

. / sp

arkstu

dio


The 2nd Annual Latin America Outsourcing Summit did not disappoint with top-notch speakers, educational breakout sessions, thought-provoking panel discussions, award recognitions and networking (see our Pulse Flash for some of the social side).

The two-day info-packed conference covered innovation outsourcing in Latin America, reducing the impact of manpower shortage in IT, outsourcing best practices by MultiLatinas at mitigating risk, maximizing sourcing value through supply intelligence and outsourcing trends in Latin America.

IAOP thanks the speakers; partners Brasscom and Fortune; as well as sponsors Accenture, ANDI, Baker & McKenzie, BRQ, Grupo Assa, Infosys, KellyOCG, Softtek, Toutatis and Wipro.

plANNING AlrEAdy IS UNdErwAy For ThE NExT

lATAm SUmmIT. wANT To hoST IT IN yoUr coUNTry?

drop US A NoTE ANd lET US KNow!

“I encourage you to see outsourcing not only from an export standpoint from Brazil but also as a domestic market opportunity. Just as outsourcing improves the operations of businesses globally, it can improve the operations of business domestically. Building the domestic base will help service providers in Brazil be more competitive.”

– Michael Corbett, Chairman of IAOP

razil hosted the hottest ticket in town: the 2012 latin america outsourcing summit

Marco Stefanini, COP, CEO and President of Stefanini, was honored with the Hall of Fame award at a delicioso luncheon attended by over 100 people.

© Ca

n Stoc

k Pho

to Inc

. / sp

arkstu

dio

b y: k u lw i n d e r s i n g h

Political Turns & New Challenges are Coming With the outsourcing industry registering robust performance year after year, will it continue to flourish in view of the profound changes in the business & political ecosystem it operates in?


© Ca

n Stoc

k Pho

to Inc

. / pa

trimo

nio

outsourcing in its new avatarThe outsourcing industry will likely emerge as a force to reckon with since all state-level political decisions in their true sense are based on their financial viability and it is unlikely that any government will establish an agenda that jeopardizes economic interests.

Global businesses view outsourcing as part of their overall business strategy and measures to curb this trend can drasti-cally affect bottom lines. For global businesses, the need to achieve core competencies, reduce and eliminate costs and achieve economies of scale will continue to drive the growth of the outsourcing industry.

Certainly, there will be new challenges. For example, the recent trend of near-shoring will put pressure on Asian leaders to develop new business/engagement models. Several global businesses in the U.S. have already started allocating work to nearshore locations such as Mexico and Guatemala and others may follow suit.

To overcome this challenge, global IT and ITeS (Information Technology Enabled Services) firms can set up their branches in these locations and utilize their experience and expertise to deliver better results than local operators.

Another option is to move up the value-chain by supporting and enabling business transactions and specializing in other areas of non-core business operations. Providers can focus on knowledge intense work of large banks, pharmaceutical companies and consultancies, since some irreplaceable advantages exist in this context, such as ready availability of doctors, lawyers, chartered accountants, designers, etc. For IT firms, the shift to a product-based business model will enable improved outcomes.

Another important aspect that needs to be considered in the near term is to distribute revenue sources geographically to counter the possibility of economic downturn in a specific area. The old adage of “not placing all your eggs in the same basket” will become increasingly relevant in the next decade.

Currently, a major percentage of IT/ITeS firms depend on U.S. based firms for contracts, something that needs to be changed by increasing focus on other geographies such as European countries and Asian economic powerhouses like Japan and China. Already, some firms have started using China as a resource base and a delivery location to service their clients in U.S. and Europe, and some others have formed joint ventures.

On a broader scale, the concept of preferred outsourc-ing destination will cease to exist with use of automated

systems and technology advancements. New entrants and established players will have to strive just as hard to get new contracts. Also, soft skills will become just as important as technical skills, as global businesses start to allocate more of their mission-critical businesses and processes to offshore destinations.

More research and development projects will be given out, something that will begin replacing the conventional “work-as-

per-instructions” model. Corrections in pay-packages are also imminent; executives in the new ecosystem will have more or less the same salaries, irrespective of their geographical location.

For outsourcing firms, the message is clearly to adapt to evolving market conditions. As Charles Darwin rightly said, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

It simply means that to move to the next level, outsourcing firms will have to be smart and agile, and read the market right, as the global outsourcing industry transitions to the next era.

Kulwinder Singh As Director of Global Marketing and Communication, Kulwinder is responsible for Synechron’s corporate brand and integrated marketing efforts worldwide. Prior to joining Synechron in June 2012, he served as Business Head at Scribble Media and Entertainment Pvt Limited.b y: k u lw i n d e r s i n g h

FAST COMPANY

As Charles Darwin rightly said,“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”


Here is a sampling of the many responses, with mixed opinions, from outsourcing professionals around the world:

Before the U.S. Presidential election results were known, PULSE asked: How will political changes affect the global outsourcing industry in 2013?

“Political uncertainty will have little impact on outsourcing activities. This is regardless of who wins the U.S. presidential race as well as other congressional seats. Continuing economic challenges in the U.S. will be more of a guiding factor than changes in laws and regulations.”

Jag Dalal CoP, IAoP Managing Director Thought Leadership

“Given the anticipated slowdown in the global economy, due to the Euro crisis, and the much debated outcome of the next presidential election in the United States, outsourcing will gain strength as a business model, since scrutiny on operational costs will be paramount. Some locations like India or China could be disadvantaged, based on the policy decisions of the next U.S. President towards outsourcing. In general, the outsourcing industry is only looking to gain more attention in 2013.”

Kumanan Murughan, CoP, HP

“I do not believe the election will have an impact. The global economy has become its own engine, feeding the movement of goods and services and delivery of those across borders without much regard for the political elections. Barring significant security, tax or protectionist regulatory changes, companies will make these decisions independent of politicians. Instead, they will make them based on the needs of their customers, the ability to deliver profitability and the best interest of their shareholders.”

Marilyn Jentzen Vice President, Operations Center Strategy, Global Growth & Operations, Thomson ReutersGrowth & Operations, Growth & Operations,


Before the U.S. Presidential election results were known, PULSE asked: How will political changes affect the global outsourcing industry in 2013?

“politics is such a mess,

it’s anyone guess on the

impact.” - Tom Sultenfuss

President, ContactWorks, Texas

“Since there is still the cause - the fall of aggregate effective consumer demand - the global economic crisis in the near future will continue. We can make wild guesses as to why and when its next aggravation might happen, be it in spring or fall. The election of the President of the United States, for instance, is a huge supplement to this issue, as well as other variables that affect the course of crisis development.”

Alexey Perekatov Vice-President, Corporate Marketing, Miratech, Ukraine

“Politics will certainly play an impor-tant role with regards to government to citizen contracts both in the realm of outsourcing and offshoring. As far as the non-government contracts are concerned - until and unless there are punitive sanctions in terms of tax benefits and grants not being available to the companies offshoring their work - it will not impact the spirit and magnitude of offshoring.”

Rajesh Dhuddu CoP, Vice President, Market Development, Quatrro Global Services Private Limited

“The political debate and economic situation has put the outsourcing industry in the spotlight. In 2013 we have to better explain the role of the economics of the outsourcing industry, its role in creating jobs and global business opportunities for companies. At the same time, new technologies like cloud computing and mobile technology will change the nature of outsourcing engage-ments. Outsourcing will happen at new, sometimes unexpected places.”

Cheri MangumHead of Marketing, Freeborders, Inc.

Cheri MangumHead of Marketing, Freeborders, Inc.

FAST COMPANY???


© Ca

n Stoc

k Pho

to Inc

. / m

ichak

lootw

ijk


© Ca

n Stoc

k Pho

to Inc

. / se

razetd

inov


TrEnDS &forEcaSTSmadame frinton tells all

2013: A World of Change for Outsourcing

As the world turns, global economic, political and social forces will impact outsourcing in the coming year. Our annual trends report – publishedbefore the results of the U.S. presidential election were known – show the uncertain climate will lead to more caution but also potentially closer and more creative relationships and opportunities. The clouds will lift in some areas

our future gazers predict ...

b y: s a n dy f r i n to n


GlObAl ClImATe “The long-drawn out industry woes thanks to belt-tightening in Europe, elections in the U.S., and a general lackluster growth in developing nations (India and China in particu-lar), supported by downgrading of sovereign debt ratings by S&P, Moody’s and Fitch has put a dampener on aggressive pursuits relating to global sourcing,” says Bobby Varanasi, COP, COP-GOV, COOPM, who is chairman and CEO of Matryzel Consulting, Inc.

With the current economic situation, Roy Wang, hiSoft, U.S. RDS-PDS Senior Project Manager, says he doesn’t see the global outsourcing market improving until about the second half of 2013.

Reflecting on 2012, Alexey Perekatov, Vice-President, Corporate Marketing, Miratech, Ukraine, notes that very weak economies in Europe combined with slow growth in the U.S. and in such emerging nations as China, India and Brazil dampened the prospects of outsourcing industry growth for the near term.

“The biggest advances in developing nations are yet to come,” he says. “One outsourcing trend that has continued to be strong is to foster outsourcing to bring the economy into a healthy state.”

“Fully developed nations have been shifting to knowledge-based economies for decades,” he notes. “The challenge for developed nations such as the U.S. and Japan is to maintain their leads in such areas as intellectual property, investment in R&D and higher education, while displacing factory workers and shifting (outsourcing) much of manufacturing overseas. This means that mature economies will see more advanced and optimized outsourcing services, whereas emerging ones will deploy outsourcing more broadly as a tactic to reduce operating costs and streamline business workflows.”

Overall, Matthew P. Shocklee, COP, Managing Director & Global Ambassador, IAOP, sees continued growth ahead in the industry with increased focus on global positioning of work and related services with a focus on the total value of the service with increasing emphasis on risk, compliance and security.

NeArShOre ForEcAST: poISEd For ExploSIoN Near shore destinations for the U.S. (such as Costa Rica, Panama, Honduras) will play a bigger role in offshoring decision-making, predicts IAOP’s Director of Thought Leadership, Jag Dalal.

Nearshore countries continue to offer strong prospects by providing the benefits of less travel time and expense, greater efficiencies due to time zone compatibility and the ability to harness closer cultural affinity, according to Julia Santos, Markets Executive Advisor, Ernst & Young.

Atul Vashistha, COP, Chairman & CEO of Neo Group, is calling that 2013 will be a “breakout year” for the Latin America domestic market trend, seeing this not just as a nearshore trend but the rise of regional demand.

Advisor Anupam Govil, Partner, Avasant and President, Avasense, says a “perfect convergence” of factors have come together to set the stage for the accelerated growth of outsourcing in the region, including continued above average GPD growth, rise of MultiLatinas, maturity of service providers, increased interest by U.S. buyers in nearshoring and the region being well suited to handle

hErE’S how oUTSoUrcING IS ExpEcTEd To plAy oUT For dIFFErENT pArTS oF ThE world, AccordING To prEdIcTIoNS GAThErEd by pUlSE From INdUSTry ThoUGhT lEAdErS:

“If (CSr) is not at the forefront of every out-sourced engagement, the company has failed the consumer.” – Julia Santos COP, Markets Executive Advisor, Ernst & Young

t r e n d s & f o r e ca s t s


growing technology trends of cloud computing, mobility, social, big data and security.

Colombia-based Carvajal IT & Services expects a good year in 2013 with a strong brand in the region, government support for outsourcing and an ample talented labor pool, says Director Diego Ossa.

“In LATAM we are expecting a maintained slope towards higher incomes,” he says. “As service providers, innovating and improving our portfolios, any challenge in Europe or United States, even within LATAM, means opportunities we’re willing to catch.”

Camilo Pena Ramirez, CEO & Founder of Knowledge Process & Professionals in Chile expects Colombia, Chile and Brazil to be the growth areas, noting that government support is helping smaller, highly specialized companies enter the global service industry.

But our trend watchers also see some potential challenges ahead with availability of labor and tax barriers.

“Latin America will need to address its tax barriers to offshoring in order to leverage the outsourcing model to its full advantage,” Santos says. “Countries, like Brazil, will need to make their tax structure simple and beneficial to the investor. The red tape involved in offshoring to a particular country will discourage investment. As the Latin American region continues to grow, the income per person will grow and the purchasing power will be stronger than most emerging or under developed regions.”

OffShOreForEcAST: wEAKEr oUTlooKSlower revenue growth in India and China is predicted. Economic and political challenges in India will challenge Indian service providers and will continue to add margin pressures for their existing and new outsourcing activities, Dalal says.

Higher salaries and shorter work hours will reduce their advantage over other outsourcing destinations, including onshore activities.

Greater consolidation of China and India-based service providers and advisors also is predicted in the coming year by IAOP’s Shocklee.

The bright spots include: impact sourcing and CSr,

professional certifications, nearshore and onshore

destinations, technology solutions, and services that

control risk and protect data.

The bright spots include: impact sourcing and CSr,

professional certifications, nearshore and onshore

destinations, technology solutions, and services that

control risk and protect data.


© Ca

n Stoc

k Pho

to Inc

. / se

razetd

inov

“businesses will consider outsourcing “locally” or even bringing some of the offshored work back on shore.”

- Jag Dalal, IAOP

onShorE: a PoSiTivE viSiont r e n d s & f o r e ca s t s

© Ca

n Stoc

k Pho

to Inc

. / se

razetd

inov



ONShOreForEcAST: poSITIvE vISIoN Economists are predicting continuing high unemploy-ment in the U.S. and some of the other leading industrial nations in Europe. This will lower wages for certain skills and will encourage more businesses to consider outsourcing “locally” or even bringing some of the offshored work back on shore, Dalal says.

Says Varanasi: “From a U.S. standpoint, jobs (and the threat of taxes) shall continue to demand cautious initiatives from companies, while domestic delivery will become more of a mainstream conversation going forward.”

Cliff Justice, principal and U.S. leader, KPMG Shared Services and Outsourcing Advisory, also sees growth ahead in onshore delivery models.

“Many of the global service providers are assessing opportunities to add capacity in the U.S. and Europe to address components of the services value chain that are unable to be delivered effectively offshore,” says Justice. “We expect to see more asset acquisitions of Western-based capacity that provides a platform for industry- specific or technology-specific capabilities in the domestic markets.”

Accenture’s Managing Director, Business Process Out-sourcing Sam Ciruolo also sees the current global crisis driving significant demand for outsourcing services in Europe and the Americas.

Outsourcing in U.S. state and local government will continue to accelerate given the continued sluggish economy and dwindling tax base, increasing demand for rural sourcing.

“Rural sourcing will benefit from this as states begin to focus on creating outsourcing ecosystems to more affordably support state infrastructures,” Shocklee says.

emerGING NATIONSForEcAST: locAl mArKET GrowTh “The benefits of outsourcing and the need for fueling domestic economies through instituting efficiencies and productivity goals into national agendas will further drive a more widespread adoption of outsourcing in local markets,” Varanasi says. “The tryst here would be the value articulation, which will not be around cost savings, but value arbitrage. Nations on a fast-track development model will be hard-pressed to adopt sourcing strategies to retain market competitiveness and economic resilience.”

“Nations on a fast-track development model will be hard-pressed to adopt sourcing strategies to retain market competitiveness and economic resilience.” – bobby varanasi COP, COP-GOV, COOPM, Chairman and CEO of Matryzel Consulting, Inc.

“rural sourcing will benefit as states begin to focus on creating outsourcing ecosystems to more affordably support state infrastructures.” – matthew p. Shocklee COP, Managing Director & Global Ambassador, IAOP



ToP 10PrEDicTionS: Risk governance Partnerships Social Responsibility Certifications Data Security EnergyTechnology Analytics Rural Sourcing

1

23

hANdlING rISK

Government regulations will continue to be enforced and companies will need to adapt and find better, more efficient ways to handle compliance, legal and financial risk. “Due diligence and risk assessment monitoring on potential providers and locations will be crucial to outsourcing engagement success,” Santos says. “It requires a stringent quality assessment and oversight of external providers.” Brent Larlee, Global Head, Legal Services at Integreon, says increasingly complex legal and regulatory requirements are driving interest in the company’s outsourcing offerings for law firms and corporate legal departments. “Cost and compliance pressures are resulting in increased exploration of alternative models to deliver legal services, and we predict this to continue as well, predominantly in the form of three party partnerships between corporate legal departments, outside counsel and LPO providers,” he says.

GovErNANcE GrowS

Governance will be more important than ever to predict against risks. David Barrett, COP, CEO of PROCURiSOURCE Limited in London, says: “Governance will become even more crucial and complicated as we move into the new environment. I foresee the emegence of new players who will be optimizing practices between suppliers and customers and teaching them how to collaborate effectively in the new environment.” According to Vashistha of Neo Group, “The focus on governance will rise due to ongoing supply issues such as limited labor pools and high attrition. This will highlight the need for increased location and supplier monitoring.”

rEAl dEAl pArTNErShIpS

Buyers and sellers will move beyond talking about partnering and actually achieve it. This trend has been seen in IAOP’s Bangalore, India chapter in discussion forums and all other sessions, according to chapter co-chairs Gopal Devanahalli, Vice President, Infosys; Praneet Goteti, Commodity Manager, Intel; and Dinesh Goel, Partner of ISG. “Partnership is no longer a nebulous concept found only in corporate presentations and press releases. Both buyers and sellers are committing time and investment to



456

78910

developing a mutually beneficial partnership with concrete outcomes, be it co-creation of value, transformation or innovation,” the chapter co-chairs said. Given the uncertain financial landscape, companies will seek creative ways to work with their providers, says Santos. “We will see more dramatic rationalization of preferred suppliers where companies send work to a few strategic providers and have more collaborative long-term relation-ships,” she says.

SocIAl rESpoNSIbIlITy & ImpAcTS

Corporate social responsibility – including fair wages and labor practices, environmental impact, local community support and sustainability - will move to the forefront of engagements between providers and customers. “Companies will be seeking to implement the same standards with external partners that they have with their employees and their home environments,” predicts Santos. “If this (CSR) is not at the forefront of every outsourced engagement, the company has failed the consumer.” Large and mid-sized companies will put a renewed emphasis on the social impacts of sourcing to spread their cost bases and also drive their economic agendas, says Varanasi.

proFESSIoNAl cErTIFIcATIoN ANd TAlENT

Having employees with the right credentials, expertise and talents will continue to be important in the coming year. Despite the economy, IAOP’s CEO Debi Hamill says the association has seen strong interest in its training and professional development programs and the number of Certified Outsourcing Professionals®(COPs) is only expected to continue to rise in the coming year. D. Zachary Misko, Vice President of Workforce Strategy, KellyOCG, says the new talent supply chain will require greater partnerships between recruitment process outsourcing (RPO) providers and their clients, predicting “one big pot of global hiring solutions” will emerge.

dATA SEcUrITy

Security of data as well as availability of systems and net-works will remain a major issue for customers and providers. “Cyber-attack threats, as predicted by the U.S. government agencies will become an issue for businesses to tackle - whether outsourced or not,” says Dalal, noting the serious “denial of service” attack on financial and energy ompanies globally in September and early October 2012.

TEchNoloGy

Trends in technology will drive outsourcing growth in vari-ous segments. IAOP’s Shocklee predicts IT Infrastructure outsourcing will see growth with the focus on Big Data and associated cost of storage management and associated escalating costs. He also expects the continued explosion of data driven devices and impact of social media on business will cause increased focus in outsourcing. Dalal sees cloud computing options continuing to play a bigger role in IT outsourcing decisions for smaller and mid-size companies. However, larger businesses will still be concerned with capacity and security issues and will consider cloud sourcing as a lower alternative to outsourcing, he says.

AlTErNATIvE ENErGy

Driven by rising costs and service interruptions, providers with large data and telecommunications centers may look to other energy sources, such as solar or wind. “Rising utility costs, interruption of service due to natural or man-made events as well as environmental impact of accessing natural resources will drive outsourcing providers to consider alternate sources for their energy consumption,” Dalal predicts. Service providers also will have to look for architecture that utilizes consolidation of services and virtualization in order to reduce requirements for hardware, he says.

ANAlyTIcS

Analytics will be the key revenue driver for rapidly com-moditizing BPO businesses. Arijit Sengupta, CEO of BeyondCore, predicts that BPOs processing invoices, for example, will treat that business as a loss leader while charging clients for a percentage of business benefits such as Cash Conversion Cycle optimizations delivered by analyzing the invoice data.

rUrAl SoUrcING

Outsourcing in U.S. state and local government will continue to accelerate given the continued sluggish economy and dwindling tax base, increasing demand for rural sourcing. “Rural sourcing will benefit from this as states begin to focus on creating outsourcing ecosystems to more affordably support state infrastructures,” Shocklee says.


TrEnDS & forEcaSTSgLobaLrEgion

U.S., canada, EuropeWestern countries may see a return of work that was previously offshored brought back as the cost advantages of offshore locations decline

U.S. and Europe• Global service providers will look for opportunities to add capacity here

• Western-based capacity that provides a platform for industry-specific or technology- specific capabilities in the domestic markets will be targets for acquisitions

• Outsourcing by states and governments will

increase and rural sourcing will rise

U.S.

brazil, mexico, chile, colombia and peruOutsourcing growth spots

costa rica, panama, honduras These nearshore locations to the U.S. will be attractive because of the time advantage but availability of resources may be limiting

Eastern Europe

Rapid outsourcing growth predicted due to developing markets

and a wealth of talent

U.K. Increased “privatiza-tion” (outsourcing in a sense) by governments

to control spending is expected

Corporate social responsibility and impact sourcing will be on the rise.

brazil The World Cup and Olympics will create opportunities but a simpler tax structure is a challenge that needs to be overcome

• Overall accelerated outsourcing growth and increase

in regional demand

• Service providers will win larger and more transformational

outsourcing deals

• Providers poised to ramp up demand to meet technology trends

Latin America

Outsourcing will be more widely adopted in local markets to achieve value.



Eastern Europe

Rapid outsourcing growth predicted due to developing markets

and a wealth of talent

India

• Margins will continue to be under pressure for service providers

• Cost advantages over onshore locations will decline as salaries rise and work hours lessen rise and work hours lessen locations will decline as salaries rise and work hours lessenMiddle East

Social and political instability will make some locations less desirable

as outsourcing destinations

JapanOutsourcing market expected

to be impacted by conflict with China over Diaoyu islands

As a mature nation, maintaining leads in intellectual property, investment in R&D and higher

education will be the challenge

Africa• Growth in individual

companies will depend on political and social stability

• New high-speed telecommunication will

aid growth

Emerging destinations to watch in Africa:

TunisiaGhanaSenegal

MauritiusMoroccoSouth Africa

AsiaRevenue growth

slows with a tighten-ing of margins

India and china

• Slower revenue growth predicted

• Continued mergers and acquisitions by providers

global competition for talent will intensify and lead to new blended approaches to hiring.

Buyers and providers will partner more closely to co-create value, transformation and innovation.


Australia • Government desire to

control spending will continue to increase privatization

• Legal process outsourcing is growing as an enabler of innovative and integrated

services


hOtSpOt

africa – is it the “lost” continent or the “last” continent as far as outsourcing is concerned? truth is, it is both.

Many believe that this large destination is slowly reaching a stage where businesses will have to seriously consider it in their evaluation for sourcing. However, unlike larger populous countries such as India, China, Brazil or in North America, Africa is a continent with 47 different countries. If you include islands near Africa there are 53 countries. These islands are considered African and can be destinations. For example, the Mauritius Island is to India, what Bermuda is to the U.S. – a safe haven for companies. In a recently published Global Indexing Report (2011) by A.T. Kearney, several of the African nations were listed in the top 50 destinations. It listed Egypt as #4 (However, the ranking was made prior to recent political unrest there and A.T. Kearney indicated that regional instability will lower their ranking), Tunisia (#23), Ghana (#27), Senegal (#29), Mauritius (#36), Morocco (#37) and South Africa (#45). For this article, I will focus mostly on these countries. As the environ-ment changes in other countries, others may become attractive destinations in the future. But by most count, this is not expected in a near future.

Analyzing Attractiveness for Outsourcing:There are several factors that have made these and some of the other nations (such as Nigeria, Algeria and Ethiopia) slowly make their mark on the global outsourcing map. At the same time, some troubling areas still need to be addressed before companies will seriously consider African countries as a destination of choice. These include:

1. Socio-poli-Economic Environment: A tremendous amount of diversity exists among countries in Africa when considering their social, political and economic environment. One of the reasons these countries have been listed in the A.T. Kearney report is their relative political and economic stability. The accompanying graphic from The Economist (2010) clearly shows that the African continent, as a whole, is fairly unstable. Political instability creates an environment where investment capital is restricted, especially

foreign investment, making it difficult to establish or expand services business, which is capital intensive. The Heritage Foundation and Wall Street Journal 2012 analysis also showed that political stability was at best “moderate.” This is further borne out by the assessment by the Fitch Credit Rating services. Their analysis published in July 2012 showed that all of the African countries were rated as “Low Medium Grade” or lower and some of the countries could not even provide necessary information to be rated by Fitch Credit Rating. Despite these challenges, selected countries have taken steps to encourage investment and political umbrella to encourage foreign investment,

and lured established service providers to the continent. Genpact, CSC, Accenture, HP, IBM, Xerox (ACS), Xceed and TCS are among providers that have established their presence in these countries and are offering choices to their customers and prospects.

2. Infrastructure: Although infrastructure in most of the regions and countries in Africa remains a challenge, recent deployment of high-speed telecommunication “inter-continental” cables have opened up many

locations with necessary telecom capabilities. Large investments have been made by countries and private companies to create business zones where infrastructure is on par with advanced nations. Building office parks and facilities for housing processing centers is increasing. A good amount of travel infrastructure is available that connects these nations and cities with rest of the world.

3. workforce availability and qualification: Since many of the countries on the continent were previously occupied by other nations, such as England, France, Netherlands and Portugal, there is a high level of English and other European language comprehen-sion among the population. This adds to the attractiveness for the workforce when they can be proficiently multi-lingual. A high level of investment also is being made in the education sector. However, the workforce preparedness in these countries seriously lags behind other non-African destination; even with smaller populations. According to the CIA World Report, shown in the accompanying

Infrastructure is available to connect nations & cities with the rest of the world.

© Ca

n Stoc

k Pho

to Inc

. / ja

varm

an

AFRICA An Emerging Alternative

by the Numbers: Africa is a continent with 47 different countries, plus six nearby islands.

Status: A tremendous amount of social, political and economic diversity exists among the countries.

countries to watch: Egypt, Tunisia, Ghana, Senegal, Mauritius, Morocco and South Africa.

© Can Stock Photo Inc. / michaeljung

iaop launches africa advisory board

Recognizing the growing importance of Africa as an outsourcing destination, IAOP has formed a Regional Advisory Board (RAB) made up of leading companies in the area.

The RAB will develop programs that leverage the common interests and shared resources of members in Africa so that IAOP services will be tailored to better meet regional needs.

Members of the board include:

Ademolasoye R. AwonaikeGeneral ManagerResource Interemdiaries LimitedNigeria

Peter K. AkindejuHead, Corporate ServicesIntegrated Corporate Services Ltd.Nigeria

Ramaprasad Varanasi, COPChairman and CEO, Matryzel Consulting IncMalaysia

Eunice M. KariukiDirectorKenya ICT BoardKenya

Ossama NazmiVice PresidentXceedEgypt

by Jag dalal, IAop managing director, Thought leadership

figure, most of the African countries have very small workforce numbers, and when compared to more popular destinations, it is only a fraction. This availability, along with lower technology graduation rates, will make it difficult for most African countries to compete globally. The attached chart shows technology graduates by country as compiled by OECD (2009).

4. promotion and marketing: History has shown that many of the preferred outsourc-ing destinations became attractive not just because of their capabilities but also by promotion and marketing by the country or entities within the country. For example, NASSCOM has put India on the map just as the Malaysia government has done for its country. Even a small country like Costa Rica has an organization called CINDE that promotes it as a viable option for offshor-ing. Recently, there has been an increase in promotion by selected African coun-tries. For example, Ghana has been quite

active and is a participant in IAOP activities. These marketing activities help counter negative stories coming out of the continent and help to increase the understanding of the differences between those countries locations and preferred destinations.

Summary: Africa Alternative to be ConsideredAlthough countries in Africa still do not appear on the list of desirable destinations for outsourcing, the reality is that they offer an alternative that must be considered. Companies who want to expand their operation on the continent should clearly consider a number of countries for setting up centers. Providers can establish an early presence on the continent and have a sound foundation for the times ahead when the African continent will join other more familiar countries. It is clear that many countries in Africa will become a competitive force in the decades to come.

polITIcAl INSTAbIlITy INdEx

Very highHighModerateLowNot rated

risk level

Source: Economist Intelligence Unit.



Imag

e: ca

nstoc

kpho

to.co

m

Principal and U.S. leader, KPMG Shared Services and Outsourcing Advisory

C L I F F J U S T I C E

Global economic uncertainty will make the outsourcing picture less clear in the coming year. How the economy will affect the industry remains to be seen. We asked IAOP members: What is your prediction on how the global economy will impact outsourcing in 2013?

Sandboxthe

COP, Partner, Kirkland & Ellis LLP

N E I L S. H I R S H M A N

“Based on what we have seen from prior economic cycles, we are not expecting the global economy to significantly affect the number or type of outsourcing initiatives. Companies that are driven by innovation, process improvement, cost reduction or increases in quality will continue to look for ways to address those issues, including through outsourcing. However, because of the potential uncertainty presented by these economic times, companies will likely look for various ways to mitigate risks, including through increased diligence on their providers, modification of the duration of contracts, enablement of second sources or geographic diversification.”

A dV I S O R“Companies are continuing to expect an uncertain economic outlook in the U.S. and Europe that will drive shorter term deals and more flexible sourcing models. Many companies are holding off on major investments until better clarity is reached on the European economy and how the U.S. will handle the potential ‘fiscal cliff’ that could drive the economy into a recession. Buyer organizations’ appetites to undertake change efforts likely will remain muted, at least for the first half of the year.”

A dV I S O R

COP, Vice President – Market Development, Quatrro Global Services Private Limited

R A J E S H d H U d d U

“In essence, the justification for outsourcing either in the large clients’ segment or the small and mid-market segment is independent of the state of the global economy. Whether the economy is booming or busting, costs need to be managed and revenues need to be enhanced. However, the magnitude of outsourcing will be directly impacted if the gloomy state of the economy continues as budgets get rationalized and are not easily available even to start new cost reduction initiatives in large companies. Small companies can be significantly impacted by muted economic growth if their clients go out of business.”

P R O V I d E R

Imag

e: ca

nstoc

kpho

to.co

m


www.kirkland.com

Chicago • Hong Kong • London • Los Angeles • MunichNew York • Palo Alto • San Francisco • Shanghai • Washington, D.C.

1,500 attorneys. 10 offices. 1 team.Kirkland & Ellis is an international law firm with 1,500 attorneysin 10 offices worldwide who form one team with a primary goal ofhelping you successfully achieve your objectives. Kirkland lawyershave long-standing experience in complex outsourcing transactions(including business process and information technology),representing both customers and providers in onshore, nearshoreand offshore outsourcing transactions.

IAOP has named Kirkland & Ellis to the World’s Best OutsourcingAdvisors list each year since the list’s inception.

2012 PULSE Magazine IAOP (8.5x11 color)_Kirkland_Kirkland 8/28/2012 12:11 PM Page 1


PULSE k n ow l e d g e c e n t e rk n ow l e d g e c e n t e r

Customers’ frustrations can be eliminated by instating and adhering to sufficiently clear contract provisions, experiences from a number of ITOcustomers in the Nordic area demonstrate. In a perfect world, all parties treat the outsourcing relationship as a partnership where the supplier will deliver what the customer requires and the customer will put an effort into not being unreasonable with their requirements. At least within the outsourcing category of IT Operation (ITO) (i.e. server, network, workstation and service desk), real life experience shows a more blurred picture with enterprise ITO outsourcing customers typically being dissatisfied to a level where they want to re-source with another supplier or implement a multivendor strategy. In addition ITO customers almost always find themselves to be commer-cially locked-in with their supplier(s) because transitioning to a new supplier is legally complex, costly and risky. Finally, customers must take into consideration that a well-functioning outsourcing relationship can be in jeopardy at any time due to changes in top management by the supplier and potential mergers and acquisitions in the business. ITO customers exposed to the pit-falls mentioned below or other simi-lar pitfalls are more prone to include external competences with cross company commercial outsourc-ing experience as part of their next outsourcing contract negotiations.

A FormUlA For oUTSoUrcING FrUSTrATIoN:Complex legal contracts governing outsourcing relationships combined with the desires of customers and suppliers to optimize the outcomes during the contract term. The result: Unclear contract provisions that can be exploited, generally to the advantage of the supplier.

1AvOIDINg IT SERvICE CONTRACT PITFALLS

hOW TOAvOID

3 COMMON MISTAkES

ovErcomING commoN pITFAllS

poTENTIAl problEm #1: Missing contractual regulation of price and service level commitments for the Service Request Fulfilment (ITIL®) process. (For example: the process managing any post signature activity to change the, at any given time, currently installed base)Too often, this is left to be case by case agreements on scope, price and service levels such as task orders and projects. This is a buffet table for monopoly suppliers which very often have been seen delivering commer-cially outrageous quotes for the con-sumption of hours to execute a task or project and is almost consistently seen within the suppliers that are commer-cially driven by shareholders value.

SolUTIoNS: Commercial approach: The com-mercial way to limit exposure to the service request pitfall is to implement a multi-vendor strategy for the same service towers. By doing this, the ser-vice request will be exposed to compe-tition and, thus, get reasonable terms.

Contractual: The contractual way to limit exposure to the service request pitfall is to include a substantial number of standardized service request types (SSRs) into the contract. A SSR is characterised by having a pre-agreed result, an all-inclusive price and a service level commitment. (For example, enabling a new virtual server within the services, USD 800, in two working days.)


An independent commercial outsourcing specialist, Jørn w. rasmussen is the owner of Pathios and previously was CTO of Maersk Line.

SolUTIoNS: Commercial approach: Decide that the hardware for (parts of ) the outsourcing scope is provisioned and provided by the customer themselves. In the ITO business area this is very often seen with workstations and physical servers but is rarer in the areas of storage, backup and network equipment.

Contractual: Ensure that all services are available as a service composed of unit prices for hardware, housing and services (effort). At the commence-ment of the outsourcing contract, the supplier is delivering the hardware as part of the services and the contract hold provisions that the hardware influenced price / performance levels are negotiated e.g. once a year. If the supplier cannot keep on providing commercially attractive prices, the customer should have the right to substitute the hardware unit with similar hardware procured by the customer themselves. This threat itself has proven to make the supplier renegotiate in good faith.2

3For ThE FUll prESENTATIoN mAdE AT IAop’S NordIc chApTEr, SEE IAop’S KNowlEdGE cENTEr, FIrmbUIldEr.com.

poTENTIAl problEm #3: Lack of a cross service key perfor-mance indicator (KPI) regime with associated penalties.In many contracts there are virtually no KPIs, apart from the traditional availability service levels, which leaves the customer blindfolded to the on-going non-visual quality of the operation and, thus, also to a rising risk for severe incidents as a conse-quence of the build-up effect of con-tinuous operational service failures. In addition it leaves the parties without measurements to base service improvements on and finally it leaves the supplier without incentives to improve the services delivered.

SolUTIoNS:

Contractual: Include a significant number of KPIs into the signed agreement, for example, between 50 and 100, which are all measured every month. A number of these (for example, 25) then are included in a KPI default level regime where each KPI is given a weight factor, consistent breach of a KPI is multiplying with an impact factor. Every month the total across the KPIs is calculated and a penalty applied matching the relative KPI performance level.

The customer should insist that as many as possible of such recurring and reasonable predictable tasks are defined and described before the con-tract is signed and a pool of several hundred can be expected. In addition, a project estimation model must be implemented where the supplier is obligated to use SSRs where possible, including the agreed price and SLA. The remaining part of the project should be broken down to logical work packages – for example, a maximum of 30 hours with a specified purpose and named resources.The supplier should have the right to add project management of a maximum of, for example 15 percent, of the work package volume. Finally, the customer should ensure that they can decide to have a third party delivering (part of ) the work packages.

poTENTIAl problEm #2: Lack of customer step-in right for hardware procurement, such as when procuring on-demand integrated services. Reasonably enough, it is very hard to negotiate prices at signature time that reflect long contract period when hardware prices and performance have continuously improved over the last 20 years. As a result, customers often find themselves in a situation a couple of years into the contract where it is obvious that they paid too much for new hardware. Renegotiation at this point in time is troublesome due to the operational lock-in and benchmark clauses are often costly to execute and provide only limited regulation.

ITo cUSTomErS AlmoST AlwAyS FINd ThEmSElvES To bE commErcIAlly locKEd-IN wITh ThEIr SUpplIEr(S) bEcAUSE TrANSITIoNING To A NEw SUpplIEr IS lEGAlly complEx, coSTly ANd rISKy.

© Can Stock Photo Inc. / docent

© Ca

n Stoc

k Pho

to Inc

. / sa

ransk


PULSE k n ow l e d g e c e n t e r

Proactive remedies are essentially an early warning system where certain events give the customer access to certain commercial and legal remedies based on the risk level of the particular trigger event. The purpose of giving the customer the right to exercise these remedies is to allow the customer to pre-empt any breaches by capturing and correcting negative

PROACTIvE REMEDIES hELP OUTSOURCINg CUSTOMERS MANAgE RISkS

trends in the delivery of the outsourced services. Optimally, proactive remedies will give the service provider an incen-tive to invest in risk management and correct negative trends before any material breaches materialize. When used as an active part of the customer’s contract management, proactive remedies serve as a strong risk management tool and give the service provider an incentive to invest in risk management and halt negative trends at an early state.

oUTSoUrcING ANd TrAdITIoNAl rEmEdIES

At least in theory, the outsourcing busi-ness model is an efficient and world-class business tool. By outsourcing, customers can access resources and competencies that would not other-wise be available and service providers can use economics of scale in order to offer reduced costs for those expenses related to hardware and software. The service provider’s perceived ability to standardize and consolidate platforms and use of technology should reduce unit costs and provide for higher tech-nology efficiency than a customer itself would be able to. Additionally, because service and technology provision is a service pro-vider’s trade, a service provider should be able to provide higher availability, better security, greater resilience and more effective processes for software development and maintenance. Despite the emergence of the out-sourcing model in IT services, business processes and many other lines of business, surveys, statistics and the everyday interaction with clients having outsourced, show that the outsourcing business model has not delivered on its promises.

A rEcENT TrENd EmErGING IN ThE pAST ThrEE To FIvE yEArS hAS bEEN To INclUdE So-cAllEd proAcTIvE rEmEdIES IN oUTSoUrcING coNTrAcTS.

© Ca

n Stoc

k Pho

to Inc

. / re

drock

erz


pErFormANcE oF ThE SErvIcE provIdEr: These focus on negative trends in terms of performance of services by the service provider and as such offer a great scope for individualiza-tion according to each customer’s priorities and requirements.

ExAmplES: Service level drops; key performance indicators or project milestones not delivered on time or to budget; disruptions being attributable to human errors; inability of the service provider to cure a breach within agreed time limits; persistent or repeated breach, non-performance of processes such as change management (and other relevant ITIL processes); the material non-performance of the supplier’s obligations to a sub-contractor

FINANcIAl INFormATIoN or orGANIZATIoNAl dEvElopmENT: These events relate to financial information or organizational development and can also cover a wide variety of events that can potentially, and depending on the circumstances and context, have a negative effect on the performance of the outsourcing contract in the foreseeable future, even if the transaction or the effect of the infor-mation is not immediately noticeable.

ExAmplES:Acquisition, merger or divestures by the service provider; increases in the turnover rate among the service provider’s key personnel; change of the project executive; a lowering of the service provider’s credit rating; a stock exchange profit warning issued by the service provider or its parent company.

common types of trigger events

A majority of all outsourcing agreements fail in one or several aspects and nearly all outsourcing agreements are renegotiated and re-scoped due to customer pressure be-cause of performance issues or simply because prices have been undermined by market developments. The most common remedy for non-performance is service credits and remediation of services and deliverables. Service credits capture only aspects of the service delivery, namely non-performance of service levels for operational items such as availability, time to recover, failover capabilities, etc. In theory this remedy should work but customers increasingly voice that service credits are so low that they are unimportant and that service providers simply see service credits as a common day-to-day event that is likely to be fully compensated for in the service provider’s business case. In regards to remediation of services and deliverables, this will typically first be available when the deadlines for delivering the services and deliverables have passed. In most cases the damage will already have been done at this point. Further, customers will in most cases have to rely on the service provider’s ability to adequately determine and implement any remedial efforts and this process will often not be transparent to the customer. All other remedies are in practice remote in nature. Most often service credits rule out that damages can be obtained and in any case, indirect loss and loss of profits are always excluded. That leaves termination for breach as the remain-ing remedy. Considering the costs and risks associated with procuring replacement services and transitioning the existing services to a replacement service provider or insourcing the services, only the persistent and the very material breach of an outsourcing contract will be sufficient to justify termination even though a customer may be fundamentally dissatisfied with the performance of the service provider. What all of these traditional remedies have in common is that they are reactive and the consequence of the above mentioned factors is that the accountability of service providers is low. In such a contractual environment there is little incentive for the service provider to capture negative trends before these develop into actual breaches of the outsourcing contracts.

bUSINESS procESSES ANd mANy oThEr lINES oF bUSINESS, SUrvEyS, STATISTIcS ANd ThE EvErydAy INTErAcTIoN wITh clIENTS hAvING oUTSoUrcEd, Show ThAT ThE oUTSoUrcING bUSINESS modEl hAS NoT dElIvErEd oN ITS promISES.

{ } © Ca

n Stoc

k Pho

to Inc

. / sa

ransk


PROACTIvE REMEDIES hELP OUTSOURCINg CUSTOMERS MANAgE RISkS CONT.

rISK lEvElS Each trigger event will be assigned a certain number of risk levels and these risk levels will be maintained for a specified period of time, for example for six months after the trigger event occurred, or for as long as the trigger event is ongoing. Generally, there are three to five different risk levels for each trigger event. Risk levels should be designed to reflect how the customer requires the supplier to react to the occurrence of the trigger events. With each increasing risk level there is also an increase in the severity of the proactive remedies available to the customer, so that with each higher risk level the customer will have more options available to attempt to pre-empt a breach of the contract. In order to secure the applicability of the trigger events and the associated risk levels, it is important to ensure that the trigger events are worded clearly and measurable. In ensuring measurability the parties avoid any disputes as to whether or not a trigger event has occurred, which risk level is reached, and, by extension, whether or not the customer can evoke any of the proactive remedies associated with that particular trigger event and risk level.

proAcTIvE rEmEdIES Each risk level gives the customer the option to use the proactive remedies associated with that particular risk level. Generally a time period should be specified for each remedy, stating for how long the proactive remedies available under each risk level are available to the customer. Assuming that lowering of the service provider’s credit rating has been defined as a trigger event, it should be stated that for a certain period of time, for example, six months after the credit rating has been lowered, the remedy is available to the customer. Alternatively, remedies may also be available only for as long as the trigger event in question is ongoing, for example, if service levels are lower than stipulated by the contract, the cus-tomer will have access to the remedies until the service levels have been restored. Essentially, proactive remedies allow for very specific and individualized remedies to be applied for those trigger events which are particularly important to the customer and require a specific reaction. Examples of proactive remedies available under risk level one can be that the service provider must initiate specific reporting on the issues related to the trigger event in question on a regular basis, or the service provider must prepare and submit a specification of the approximate expected efforts and resources to be used to address the trigger event in question.

Essentially, proactive remedies

allow for very specific and

individualized remedies to be

applied for those trigger events

which are particularly important

to the customer and require a

specific reaction.


Proactive remedies under risk level two and three will typically be more severe, for example the customer may require an independent third party to evaluate and provide recommendations with regard to the trigger event in question and the supplier is obliged to implement such recommendations. Typically proactive remedies available under lower risk levels will also be available under the higher levels. For example, proactive remedies under risk level one will also be available under risk level two, and proactive remedies under risk level one and two will also be available under risk level three, etc.

whEN ArE proAcTIvE rEmEdIES rElEvANT? Proactive remedies are relevant when there is a technical, practical or financial lock-in. In other words, the customer is one way or another bound to a specific service provider for a multi-year contract period. Minimum commitment, expensive termination for convenience, and/or a long transition phase are all examples of customer lock-in. Furthermore, the fact that the outsourced services rely on particular (patented) technology or know-how being utilized may also lead to a technical lock-in as there may only be one service provider with access to the technology or know-how. Under these circumstances there may not be alternative service providers. This also holds true for special competences in narrow fields of service where there are few specialized service providers. Proactive remedies are also relevant where the customer’s actual loss due to non-performance by the service provider will not be compensated under the outsourcing contract (business loss being excluded). It is therefore possible to say, that the financial incentive to include proactive remedies in an outsourcing contract is right when the likely financial loss implied by a risk actualizing is larger than the supplier’s additional fee for taking over the risks and investing in preventing the risk.

For the full presentation from the IAOP Nordic Chapter meeting, see Firmbuilder.com

Tue Goldschmieding is an attorney and ole horsfeldt is a partner at Gorrissen Federspiel. Both specialize in IP and technology. Gorrissen Federspiel has included proactive remedies in large scale and complex outsourcing contracts since 2005.

share your smarts through iaop chapters

IAop’s chapters are the brains behind many of the association’s programs and presentations, and its chapter chairs are recognized for their thought leadership.

This ever-expanding network of more than 50 geographic and topical groups within IAOP play an important role in sharing ideas, stretching profes-sionals’ thinking and contributing to the richness of IAOP’s Knowledge Center, FirmBuilder. Chapter presentations also augment many quality presenta-tions made at the annual Outsourcing World Summit. The three stories featured here in our “Best of Knowledge Center” are from presentations made at meetings of the Nordic and Brussels chapters. IAOP chapters provide a forum for members to collectively focus on professional development, networking and the advancement of outsourcing within specific areas of common interest. Each chapter is led by chairs and co-chairs with deep knowledge in the area covered. IAOP members are encouraged to participate in as many chapters and chapter meetings as they wish. Non-members are welcomed to attend any chapter meeting as IAOP’s guest.

Geographic chapters: Atlanta, Australia, Beijing,Brazil, Brussels, Canada, Chicago, Colombia, Delaware Valley, Eastern Europe, Germany, Hong Kong, India, Italy, Malaysia, Midwest, Minnesota, New England, New York, Nordic, North Africa, Ohio River Valley, Pacific Northwest, Philippines, Qingdao/Shandong, Rocky Mountain, Russia, San Francisco, Shanghai, South Africa, Southern California, Spain (Madrid), Switzerland, United Kingdom & Ireland, Texas, Washington D.C.

Topical and industry chapters: Cloud Computing, Contracting Process, Contact/Call Center, Data Security & Privacy, Engineering, Financial Services, Global Human Capital, Global Technology Industry, Governance, IT Infrastructure, Life Sciences, Legal & Compliance, Legal Process Outsourcing, Outsouring Tools & Technology Innovation, Process Excellence, Sales & Marketing, Transboundary Sourcing, Voice of the Customer




In outsourcing, the company’s culture and attitudes of its employees are crucial to the success or failure of a deal. Recognizing the importance of the people factor, IAOP in 2011 incor-porated the “Human Side to Outsourc-ing” in their program as a focal point for further development. This presen-tation analyzes the basis for cultural differences and offers suggestions on how companies can get them right. In the Harvard Business Review, Jim McKay wrote in 2006: “Most deals fail, and people and cultural problems lie at the heart of many of these failures.” Author Stephanie Morgan writes in her book “The Human Side to Outsourcing”(2009, Wiley-Blackwell, Hoboken), “It is the people element that will often affect the commecial reality of what is to be achieved… (therefore) the human side to out-sourcing should be given the same or higher priority than all other stakeholders.” In January 2012, the results of a study in four European countries into the impact of restructuring, which also comprised outsourcing, published by PSYRES Consortium concluded that: “Restructuring has a negative impact on health… Research also shows that restructuring has an impact on the attitude of employees towards their work. For example, job satisfaction and job involvement are found to decline as a result of restructuring.”

ThE ImpAcT oF cUlTUrE oN ThE FINAN-cIAl rESUlTS oF oUTSoUrcING dEAlS

Culture is not only to be considered in contracts closed between companies based in different countries. On the contrary, it should also be a factor with contracts closed locally when cultural differences are involved. Every compa-ny and every department within those companies has its own culture. That is a requisite for success. Consider what would happen if a sales department had a “specific” HR culture? However, every culture creates and demands certain behavior from peo-ple in order to fit in and then to offer security to its members. Encountering other cultures with different rules and behavioral demands requires people to step out of this secure environment, stretch their reference frames, read the other cultures and use their benefits in order to build successful relationships. If people do not know how to do this, don’t want to, find this frightening or even are not aware of the differences, this can result in lack of communica-tion, misunderstandings, hampering relations and even in resistance. Experience shows that the people who are not willing to do this are a very small minority. More often it is a result of fear and lack of knowledge and skills. However, unintentionally it can seriously harm the success of a contract and have a negative influence on the financial results, such as revenue shrinkage, margin erosion, loss of pro-ductivity, SLA penalties, compromised cash flow, tarnished reputation, attri-tion and even contract termination.

ThE hUMAN SIDE TO OUTSOURCINg

Imag

e: ca

nstoc

kpho

to.co

m

Why Culture and Attitude Matter in Outsourcing

©Can Stock Photo Inc. / argus


AchIEvING SUccESS The next question then surfaces: Why is it so difficult to successfully achieve that cultural part and with that the attitude of the people involved? Outsourcing brings significant staffing changes. People will be moved around involuntarily and for reasons they do not support. This gives rise to negative emotions that can be quite fierce. However, although fierce, most of the time these emotions remain below the surface because of fear of repercussions, and result in quiet disengagement. This is a dangerous situation. Although hard to trace, it can have a huge negative impact on productivity and results. And to be honest, don’t we regard the people who do speak up as agitators, frustrating the process so well prepared by management? Whereas actually they are giving very valuable information and signals to their management about what is happening on the work floor. How could using this information be helpful to make a success of the outsourcing deal?

To read more on the emotional process of people involved in outsourcing go to: https://www.iaop.org/Content/23/196/3368

For the slides of the presentation made at the inaugural meeting of IAOP’s Brussels chapter and during The 2012 Outsourcing World Summit in Orlando by Lucy Herlaar, Managing Director Herlaar Coaching and Jan Allen, Vice President Strategic Programs/Project Management T-Systems International, go to: http:/www.iaop.org/ Download/Default.aspx?ID=2017

1 21. crEATE TrUST. It is important that customers, providers and advisers create an open and trustful culture, honestly listening and reacting to the signals that people give. When such a culture is created, hidden signals will come to the sur-face and can be dealt with. This process needs to be started as early in the outsourcing process as possible, and has to be supported top down.

During this process it is vital that the purpose of the organization becomes the purpose of the employee as well. This means creating equilibrium between the val-ues, goals and vision of the organization and those of the employees, in order to gain peoples’ engagement and accountability. In the end, it is those employees who will have to make the contract work.

We all have examples of change processes in which carefully constructed, new processes and ways of working were imposed on people. Though well intended,

after six months or so, the organization is back to square one, since the people who actually had to deliver it did not adopt the new rules and methods. So, in order to create sustainable results we need to create this equilibrium.

2. TrAIN For TEchNIcAl ANd mENTAl SKIllS. The next step is to train the people in the skills nec-essary to change and to execute the work they have to do. Analyze the status quo and determine the gap between “Now” and “Then.” Look at what is needed by the people to be able to drive the change and to make the contract successful. This does not only mean determining what technical skills need to be trained, but also looking at the mental state of people and determining which skills in that area need to be developed - for instance cultural awareness and ap-preciation, communication and coping with change.

lucy herlaar is Managing Director of Herlaar Coaching and supports organizations in making the human side of their organizations successful. She advises on the human side in outsourcing processes and delivers training and coaching in creating engagement and accountability.

STEPS TO GETTING IT RIGHT

achieving business sustainability and

strategic flexibility through outsourcing

bEyonD coST

b y: n i l a n j a n c h au d h u r i

© Can Stock Photo Inc. / sparkstudio


utsourcing is at the center of intense debate today, especially given the U.S. presidential elections, and the con-text of sluggish economic performance around the world. The bone of contention is the reported job losses from business restructuring. For an economy to be resilient and return to growth, organizations need to enhance business sustainability and strategic flexibility in today’s uncertain, volatile markets. The key factors that influence these are consumer demand, market opportunity and supplier costs. “Outsourcing” as we know it today is a derivative of globalization. Economies across the world have integrat-ed through trade, liberalized capital flows, technological enablement and demographic migration. This has been extremely beneficial to businesses worldwide, and therefore, to the creation of jobs and wealth. However, cost takeout straightaway assumes political undertones in job counts and not in terms of how organizations are sustaining their business, strengthening their financials and strategizing for growth. In the face of this scenario, can outsourcing then be per-ceived as more than a cost saving strategy? Isn’t it also about business productivity/sustainability and strategic agility?

IS oUTSoUrcING oNly AboUT SAvING moNEy? In the early days (not so long ago), a company’s outsourcing strategy identified a region of the world, such as India, and worked out how many FTEs needed to be offshored to that geography. Companies reduced costs by 20 to 30 percent using offshore outsourcing. The public most commonly understood “offshoring” to be “outsourcing” over the last 10 to 15 years. But this has today morphed into a very different situation. Outsourcing has had its share of supporters and detractors, but all the while what many failed to consider was how it was evolving to find sustainable solutions for specific business needs that not only provide benefits like cost reduction in the short term, but also increased enterprise strategic flexibility over the long haul. Pure labor arbitrage has never been a strong long-term strategy, but it was for many companies in a bullish market. Outsourcing ultimately is not about giving away/divest-ing part of your business—it still remains an integral part of business and needs to kick in with its expected business sustainability and flexibility objectives being met. What that simply translates to is the inescapable fact that any business or process has been run in its entirety always and not only for cost management, even if that was the short term tactical need.

b y: n i l a n j a n c h au d h u r i

Certain indicative factors typically drive decisions whether to insource, outsource or out-task certain functions/ processes. The unique situation of the business and its long-term, overarching strategic goals are, of course, the ultimate arbiters of these choices!

o

KEEpING ThE INNEr corE Insourcing is the opposite of outsourcing and refers to processes that are maintained in house. We are now seeing many outsourced programs coming back in house since this strategy can make good business sense, when you identify some of the following:

• “Troubled processes” that are not performing well in the environment today are maybe those that need higher “control” or domain knowledge.

• Processes that create true competitive differen- tiation in the market, where there is strong intellectual capital from your business.

• Processes that act as a feeder for more advanced processes may need a portion of them to remain in house.

• Processes that have very rigorous regulatory requirements would have to be insourced. However, you should consider this carefully as regulatory compliance is often not considered “core,” but assumes criticality with our percep- tions of risk/liability running high in situations of non-compliance.

© Ca

n Stoc

k Phot

o Inc. /

spark

studio

bEyonD coST

WHEN LOOKING AT

OUTSOURCING A PART

OF YOUR BUSINESS

TODAY, MOST

COMPANIES HOPE

TO ACHIEVE AT LEAST

FOUR OR FIVE FROM

THE LIST TO THE RIGHT >

COMPANIES ARE

NOT JUST AIMING

TO REDUCE COSTS,

BUT ALSO WANT TO

LEAP FROG TOWARDS

ACHIEVING A STRATEGIC

ADVANTAGE.

*

DRIvERS INFLUENCINg OUTSOURCINg DECISIONS More and more companies are discovering that the value of outsourcing is not just cost but achieving a strategic advantage. Here are some of the key drivers to consider:

• Best-in-Class Operating Levels/Efficiency: Process improvement is increasingly becoming an important part of the outsourcing execution mindshare.

• Geography Expansion: With advanced markets either heavily penetrated or hyper- competitive, and less and less profitable, companies over the past decade took to emerging markets, especially to drive revenue growth!

• Redefined Core Processes vs. Non-Core Processes: With market conditions hardening in the last three to four years, these definitions are continuously being reexamined so organizations can focus strategically on their “core business.” Companies prefer to have core competencies still performed in house, but there is more willingness to get some of them delivered by specialists.

• Technology Enablers: With enabling technology and the tough economy acting as catalysts, companies may be more willing to consider outsourcing some functions that have been retained in house as “core” earlier.

• Capital Allocation: Management is more willing these days to only invest in the “core business” and adopt asset-light/virtualized avatars. This helps improve financial performance and enhances strategic flexibility in a recessionary market.

• Regulation: Managing and complying with increasingly complex and wide regulatory requirements has grown to being one of the significant decision criteria. While regulation and compliance are crucial to successful business operations, if they are considered “non-core”, they are ripe for inclusion in an outsourcing model.

• Right Talent: The ability to attract, manage and retain global and diverse talent is a key concern. A question to ask is: “Will this outsourcing decision increase my ability to access my talent - skill, domain knowledge and language requirements?”

© Ca

n Stoc

k Phot

o Inc. /

spark

studio


whAT do bUSINESSES rEAlly wANT? All companies are looking to protect themselves from shocks in volatile and uncertain markets (business sustainability), and capitalize on business opportunities at the same time (strategic flexibility). Business focus needs to shift from being just cost intensive to identifying strategies that help in long-term business ability. Having said that, operational agility, asset lightness, specialized domain and cross functional expertise, co-creation with partners and risk manage-ment are turning out to be the defining characteristics of a strategically flexible enterprise. Outsourcing approaches need to go much further than salary arbitrage to become a more strategic relationship with a broad and long term understanding of the client’s objectives. The right mix of outsourcing was never about the “flight of jobs” whether offshore, nearshore or even onshore. It has always been about creating strategic advantage for your company and achieving “Darwinian” business sustainability.

STrATEGIc FlExIbIlITy4 4

4

4 co-creation/personalization

Knowledge/Expertisecapability

Global Talent pool

culturalAgility

Expert Sourcing

riskmanagement

cash Flowmanagement/cash is King

portfolio Agility/Flexible

resourceAllocation

Absorptivecapacity

Finance

Service Ability

Ability toEnter New

markets

Everyware /Ubiquitouscomputing/Internet of

Things

product/ Service co-creation/

personalization

operationalAgility

Absorptivecapacity

Assetlightness

Knowledge/Expertisecapability

Infrastructure

pArTNErShIpS EvolvE To dElIvEr vAlUE Today, companies considering outsourcing are more focused on how to drive business results through strategic partnerships with their “erstwhile” outsourcing service providers that will support them in meeting these goals. This approach goes much further than offshore salary arbitrage to becoming a more strategic relationship with expanded/designed long-term benefits to the client.

In the marketplace we see increased evidence of company’s search for enhancing their “core” focus, driving business results and growing their strategic flexibility. We see this as the Strategic Flexibility paradigm for 2020 shown in the graphic below:


i n t e rv i e w b y s a n dy f r i n to n

FRESh FaCE: Bill COnCannOn

ViEW FROM THE C-SuitE

Imag

e: ca

nstoc

kpho

to.co

m


CBRE also was recognized in May 2012 by Information Services Group (ISC) and IAOP with the inaugural Global Outsourcing Social Responsibility Impact Award (GOSRIA). PULSE talked with Concannon about his start in the business, people-focused management style, delivering high value outcomes to customers, proudest moments, winning formula, growth strategy and entrepreneurial spirit, as well as the company’s green business practices, “dark green” clients and one green veggie he just doesn’t like to eat.

P: What is your philosophy to running the business?

B: I am very people-focused. This involves nurturing and developing leadership and continuously looking to upgrade our talent from both inside the real estate industry and bringing in new points of view from outside of the real estate industry. We want “A” players in all our key roles. I also have rigorous financial management and controls. I see client connectivity as a big part of my role. It’s a difficult but critical part of my job to stay in close contact with our clients to understand the pressures that are on them within their industries and companies so that we can anticipate their needs and deliver high-value outcomes.I also am involved in evaluating new markets for CBRE to penetrate such as healthcare, identifying investments we need to make in technology and other areas, and interna-tional expansion. I just returned from a week trip to India where we have a great platform to serve our clients.

P: CBRE has been consistently ranked on IAoP’s Global outsourcing 100 as a top provider of real estate outsourcing services – how do you achieve this top position?

B: It’s been a nearly 25 year journey of always looking around the next corner and having an adaptive culture working with Fortune 500 clients. The way we think about our business, as opposed to delivering project manage-ment or transaction management, is that we’re really in the business of delivering high-value outcomes for our clients – for example, finding the best office location for employees’ commutes. The value we generate for custom-ers is really at the heart of why we are number one and have grown as much as we have. Our contracts with our clients are typically three to five years and we renew 95 to 100 percent of our strategic clients every year. The major reason is due to our high client satisfaction levels that are driven by the value that we’re creating.

i n t e rv i e w: b i l l c o n ca n n o n

T wo pivotal moments contributed to William (Bill) Concannon’s 25-year successful career as a pioneer and industry leader in corporate real estate outsourcing services: Getting laid off from his business job and reading a now-famous newspaper article. Back in the mid-1980s, Concannon lost his job as a project manager at United Technologies Corp. when their integrated building and services division scaled back. Liking what they saw in him when he managed a large development project for them in Dallas, Trammell Crow Co. offered Concannon the opportunity to come to Texas to work for the real estate development firm. Concannon made the move from Hartford, Ct. and his journey that would lead to providing real estate services to corporations began. With the seed of an idea for pursuing an outsourcing services mission, Peter Drucker’s 1989 Wall Street Journal article, “Sell the Mailroom,” convinced him of the value corporations could gain by outsourcing real estate services and the idea took hold. From early clients like Baxter Healthcare who believed in the concept and supportive role models along the way, Concannon went on with CB Richard Ellis (CBRE), which acquired Trammell Crow in 2006, to build a multi-billion dollar business that serves Fortune 500 companies in 65 countries around the globe. CBRE has been recognized as a leading provider of commercial real estate services in IAoP’s Global out-sourcing 100 for the past four years and Concannon has been an innovator in delivering outsourcing solutions that help add value and enable clients – ranging from technology firms to health care companies – to focus on their core competencies. As Chief Executive Officer of Global Corporate Services for CBRE Group, Inc., Concannon has responsibility for all GCS operations globally. Global Corporate Services runs the real estate departments for Fortune 500 companies (customers include Bank of America and IBM), retailers (such as Walgreens), hospital and healthcare systems, and government agencies. He oversees the delivery of all services to GCS clients, including facilities management, transaction management, project management, and client strategies and consulting. He also serves as a member of the Global Operating Com-mittee and the Americas Operations Management Board. Concannon, COP, was inducted into IAOP’s Out- sourcing Hall of Fame for his outsourcing achievements and contributions to society at large in February 2001.


hese “dark green” clients are key references for new business pursuits for first generation outsourcing clients and without them, we wouldn’t be winning in the marketplace like we are today. We also have strong leadership in our “Alliance Director” (AD) roles. They are the single points of contact for each client supported by a delivery network of global and local subject matter experts and talent. We have roughly 350 ADs around the world.

P: What is the value of outsourcing to these companies?

B: Our services deliver operational excellence, custom-ized outcomes, and global scale and reach to Fortune 500 customers. An important part of what we do is help companies manage their occupancy costs. A $10 billion company today ranks #250 on the Fortune 500 and spends 5 percent of their revenues or $500 million a year in occu-pancy costs. That’s the number we are generally managing for these clients. If we can get that number down to $450 million a year that’s a big number to save and a big part of our value. The value of outsourcing is really different in different client situations. Some companies want to divest and some are growing. It really depends on a company’s evolution in its use of outsourcing and how it buys services. For compa-nies who are very procurement-focused and procurement-driven, the value is often directly linked to the reduction in operating expenses that a service provider can drive. For others, they find value in our partnership to drive innova-tion or to improve the overall flexibility of their real estate portfolios. We also help clients develop and implement “workplace of the future” initiatives, which impact not just the corporate real estate department but the entire company.

P: Describe the range of services GCS provides?

B: Our services revolve around the client lifecycle for their space, from helping the client in the very early con-ceptual stages of selecting the best location (labor analyt-ics, location risk analysis, economic incentives environ-ment) to negotiating the deal (transaction management and brokerage) to permitting and building out the space (project management) to operating and maintaining the space (facility management). We also are there for clients as they change, from helping one employee move their desk to another floor, to a major organizational transformation within the client’s Corporate Real Estate (CRE) department.

P: How does CBRE stay on the pulse of what is happen-ing in the industry?

B: CBRE has more than 400 offices around the world in 65 countries so we have local brokers on the ground in these markets who are very plugged in. We also have our CBRE Econometric Advisors (CBRE EA) business, which conducts research on supply and demand for real estate around the world.

P: What are the growth areas for CBRE?

B: Growth areas for us include healthcare, international growth in Europe and Asia, consulting, workplace strate-gies and energy management, which involves helping our clients develop smart energy management programs.

P: What is your business strategy for growth?

B: There is still a lot of head room for growth in the corporate real estate outsourcing world. By estimates,

T

“There’s nothing passive about my style.”


it’s less than 25 percent penetrated. Several industries and geographic regions have not embraced outsourcing yet and we are trying to educate and influence those markets to turn. The biggest part of our business is in the Americas (U.S. and Canada) but we are growing very nicely in Latin America, Europe and Asia.

We also have lots of growth opportunities with our existing client expansions. Forty percent of our annual revenue growth comes from existing client contract expansions. We also try to be strategic in the renewal process to expand our relationships at the point of renewal. We do this for almost half of our renewals where we aren’t providing all services in all regions for a client already.

P: Could you provide some examples of problems you help solve for customers?

B: For example in vendor management and strategic sourcing, for Walgreens we rationalized 45,000 vendors down to less than 10,000 vendors and helped them save significant money through strategic sourcing.

Another example is helping big clients in merger activi-ties rationalize two portfolios into one portfolio that works for the new company. Real estate is a long-term asset class and most of the time the lease locations are for five and 10 year periods, and our clients typically report earnings every 90 days. We help them through the change manage-ment process with lease terminations, subleasing of space and getting them out of portfolios that don’t work for them. P: What does the honor of being inducted into the IAOP Outsourcing Hall of Fame mean to you and what are you most proud of professionally?

B: Being inducted into the Outsourcing Hall of Fame is certainly a great honor. I’m proud of seeing this idea of real estate outsourcing that started 23 years ago with one contract – Baxter Healthcare – in one city – Chicago – become a multi-billion dollar market and that CBRE is the market leader in this market. We are literally providing services to customers in 65 countries today from one contract. I feel today CBRE is the best professional service firm in our industry. We always stayed consistent with the mission. We never veered off the idea that for us to be successful long term we had to have a strong customer inside a large corporation. We were always for the advancement of the profession of corporate real estate. We see the corporate real estate executive as someone who manages an asset

class just like a treasurer manages cash. We still maintain a relationship after 23 years with

our first client – Baxter Healthcare. Renewal is lifeblood of our business and to do that you need to have a culture of performance.

P: How did you get started with Baxter?

B: Peter Drucker really gave me our start when he wrote the article “Sell the Mailroom” six months before we signed Baxter. I read it in The Wall Street Journal and I carried it in my briefcase for about a year. We were off and running with our first contract, and signed Exxon and a few others, and the idea started to take hold at a time when the trend was clearly in our favor.

P: What advice can you provide to others to succeed in outsourcing?

B: Focus on your client and have a well-defined value proposition and client references. Also establish a culture of innovation or at least one of continuous improvement.

P: You have been described as being an entrepreneurial coming from Trammell Crow – how does this spirit help you serve customers?


cbrE’S GlobAl corporATE SErvIcES (GcS)

cUSTomErS: 300-plus long-term relationships with corporate, healthcare and government organizations

FAcIlITIES mANAGEmENT: Manages over 3.2 billion square feet of commercial property and corporate facilities and $22 billion in operating expenses worldwide

proJEcT mANAGEmENT: Has over 2,800 dedicated and variable project managers serving clients around the world

lEASE AdmINISTrATIoN: Maintains over 75,000 leases for clients

broKErAGE: Has more than 7,000 brokerage professionals globally covering more than 400 markets

at a glanCE


B: With the Trammell Crow spirit, we grew up never being satisfied with thinking that you have arrived or achieved. You always needed to wake up striving to be better the next day. In serving clients, you need to recognize that no two clients are the same. You need to really actively listen to them to truly understand their needs. There’s an art and a science to it. The culture of innovation also is very impor-tant to us and a fundamental part of being entrepreneurial.

P: How do you stay close to employees?

B: We have town hall meetings with employees and strategic evaluation team (SET) meetings at client sites where our AD’s are. This is where the rubber meets the road. They bring the tools of our platform to our clients. I think our people feel my presence in their lives. I am an active participant. There’s nothing passive about my style.

P: How do you connect with customers?

B: I connect with customers one-on-one, through phone calls and with in-person meetings. It’s important for them to see you and hear from you and most importantly, to make sure that they know that when they ask for some-thing that I will respond in a meaningful way. It’s not that I can always give them what they ask for, but you have to level with them and respond or else they’ll stop talking to you. It’s a contact sport for sure.

P: How would you describe your company’s culture?

B: We expect people to be hard working, ambitious and team-oriented. It’s a competitive culture. We ask a lot of ourselves and expect to be #1. We also drive for continuous improvement. All this is done within the framework of RISE values of Respect, Integrity, Service and Excellence, which CBRE has incorporated from Trammell Crow. It’s also team oriented and fun. We like to have fun and we do have a lot of fun. The people who are here want to be in the property industry and want to be with the industry leader and we take a lot of pride in that.

P: How would you describe your leadership style?

B: I would describe my style as demanding but caring, very people-focused, forward thinking and leading from

the front. People know they can bring their ideas to me. I love that part of my job, especially from our young people. A critical part of any leader’s jobs is opening the door to new people coming in the business because that is what will drive the next level of leadership – who you recruit and how we make them really feel like they are part of the team and the family is important.

P: How do new ideas come to life at your company?

B: We have a lot of innovation that happens on our corporate accounts. We nurture those innovations and put the resources behind them so that they can scale up to be applicable and useful for all of our clients. We just featured an “Innovation Lounge” for all of our clients at the CoreNet Global conference in Orlando at the beginning of October, which featured many of our latest innovations that were developed through this approach. We have Global Knowledge Exchange (GKE) calls every month that are hosted by different subject matter experts. We have hundreds of people dialing in to talk about their new tool, new idea, innovation or best practice. We are very aggressive generating new ideas and driving them across the platform as part of our knowledge exchange with our professionals.

P: Tell me about your company’s CSR initiatives and commitment as demonstrated by winning the Global Outsourcing Social Responsibility Impact Award?

B: We have a whole practice area around energy and sus-tainability. We have taken 200-plus buildings for our cli-ents to get them LEED (Leadership in Energy and Environ-mental Design) certified. We consider ourselves a leader in terms of CSR in both the work that we do for our clients and that we do as a company. One example of a new innovation is our Real Green Research Challenge where we’re going to award up to $1 million for entrepreneurs to develop the best innovations in the area of sustainability.

P: What are some of the key business lessons you have learned?

B: Our business is not running corporate real estate departments; we are helping Fortune 500 companies

“Staying connected to customers is a full contact sport.”


drive change management. Driving change management is a three-step process that involves: (1) Listening to the customer, (2) Hiring the best people and taking care of them, and (3) Doing your homework, and then planning and executing on the homework you’ve done.

P: Who are your role models?

B: In business I would say, Mr. Trammell Crow and Bob Sulentic. Mr. Crow was a development legend who formed Trammell Crow Co. and allowed us to pursue a services mission to get this outsourcing business started. What was unique about him was his style was built on such a personal trust between people.


“The value we generate for customers is really at the heart of why we are number one.”

Bill Concannon, recognized for his outsourcing leadership, was inducted into IAoP’s outsourcing Hall of Fame in 2011.

“Staying connected to customers is a full contact sport.”

Bob is our incoming CEO who I worked with for 25 years. He is the best leader and most exceptional person I have ever worked with. He is a phenomenal role model for our leaders and people. He is a person of great character, humble and smart. Both had the ability to get the most from their people and have had a profound impact on how I developed and learned. Growing up, my father taught me the value of working hard and my mom taught me compassion for others.

P: What is the secret to your happiness and success?

B: I have been married for 30 years now and one day I realized everything good that has happened in my life these past 30 years, my wife Claudia has been at the center of. She has enabled my success at work, our wonderful three children, my faith and my health. I am who I am because of her.

P: What are your favorite reading materials?

B: The Wall Street Journal and The economist. Of course, I also am an early disciple of Drucker.

P: What are your favorite things to eat?

B: I eat too much. I like salad but I just don’t eat peas. Happily, I like to work out. Recently, I was in India and enjoyed their food too!


IAOP is pleased to welcome new and renewing corporate and professional members from:

Accenture; Affinity Express; Ahilia; Allstate Insurance Company; Aramark B&I IFM; Baker & McKenzie; Blue Shield of California; Boston Scientific; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson; Jones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; Liberty Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Services; P&G; PHH Corp.; PwC; Radian; Schneider Electric; Sepyme Global Services; Softtek; Solvay Brussels School of Economics; SourceHOV; USAA; Validata; Wellpoint, Inc.; Wipro Technologies and WNS Global Services.

For information on IAOP membership, click here or email [email protected]

WElCOmEnEW mEmBERS

B&I IFM; Baker & McKenzie; Blue Shield of California; Boston Scientific; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;

Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;Jones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyMutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business

Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;Jones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyMutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business

Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global

Jones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyMutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Mutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business Jones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyJones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyJones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyJones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyJones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyJones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; Liberty

Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;Jones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; Liberty

Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;Jones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; Liberty

Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;Jones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyJones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; Liberty

Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;Jones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyMutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business

Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;Jones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyMutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business

Cambric Corp; Capgemini; CBRE; Centro Media; CIGNA; CSC; Dell; Deloitte; Eli Lily; Fujitsu; General Motors; Genesis10; Genpact; Global Targeting; Green Dot; Hexaware; Infosys; ISS; ITSqc; Johnson & Johnson;Jones Lang LaSalle; Kimberly-Clark; Knoah Solutions; Lexis Nexis; LibertyMutual Insurance; Microsoft; Mondelez; NEXEN SPA; Orange Business


mEmBER BEnEFitS & SERViCES ImprovE oUTSoUrcING oUTcomES by JoINING wITh IAop IAOP membership provides access to a wide range of services designed to help you and your organization improve outsourcing outcomes.Membership in IAOP provides access to an extensive array of services, and equally important, distinguishes organizations and professionals as leaders in the field of outsourcing. IAOP membership demonstrates a commitment to innovative thinking, continuous performance improve-ment, and to the sustaining develop-ment of outsourcing as both an industry and as a profession.

Many of these services are included as part of IAOP’s Professional or Corporate Membership, with dicounts available for use beyond the level pro-vided. Some services are also available individually at non-member rates.

•pulse magazine – Available bi-monthly online, our e-zine features in-depth coverage of the industry, issues, trends, geographies and vertical sectors and functions; thought leadership and case studies, probing Q&As, C-level interviews and profiles; as well as exclusive and insider coverage of IAOP events, programs, awards, research, training and certifications and surveys.

•IAop’s Knowledge center – This online repository houses more than 1,000 articles, including chapter meeting presentations, conference proceedings, industry whitepapers, research articles and more.

•Global chapter Network – Throughits active and expansive chapter

network, IAOP members can share their expertise and find knowledge on best practices for specific industry segments, topics and geographic areas within outsourcing.

•conferences & Events – IAOP hosts the world’s best-known and most highly-respected executive conferences on the topic of outsourcing, including The Outsourcing World Summit.®

•outsourcing professional certification Frameworks (opcF) – IAOP’s trainings and certifications are the industry’s de facto. Members receive substantial discounts.

•value health check Survey – This Web-based diagnostic tool provides outsourcing customers and service providers with rapid insights to realizing outsourcing value.

•Global Supply risk monitor – A unique Web-based product that enables clients to monitor, predict and manage the various risks in their services supply chain (captive centers and outsourced services such as ITO, BPO, KPO etc.) across countries, cities and suppliers, in real-time.

•bestoutsourcingJobs.com – Companies seeking the best talent for outsourcing jobs, as well as professionals looking for employment opportunities, will benefit from this IAOP member service.

mEmbErShIp lEvElS•customer corporate membershipOrganizations that are currently outsourcing or are considering one or more outsourcing initiatives should become Customer Corporate Members of IAOP. This membership

provides organization-wide access to the association’s research, training, certification, and networking programs - all designed to help companies achieve better business results through outsourcing.

•provider/Advisor corporate membership – Outsourcing service providers and advisory firms should join IAOP as Provider/Advisor Corporate Members. This member-ship provides the same organization-wide access to IAOP’s research, training, certification, and networking programs as Customer Corporate Membership, but also includes member-only sponsorship opportunities that serve the marketing and business development needs of these companies.

•professional membership –Professional Membership is available to individuals either as part of their company’s corporate membership or on an individual basis. This member-ship serves the needs of practitioners working in the field of outsourcing whether as customers, providers, or advisors. In addition, it provides these professionals with direct, personal access to association services.

•Student membership – available to all full and part-time students actively enrolled in a college or university. Student Membership provides direct access to IAOP services and includes full use of the association’s online knowledge center, Firmbuilder.com.®

For more detailed information on membership and member services, visit www.IAop.org/memberServices

Special Events Introduced forThe 2013 Outsourcing World Summit®

Feb. 18-20, 2013JW Marriott Phoenix Desert Ridge, Phoenix, Arizonacalendar

Upcoming Events:

DEC. 4Governance chapter webinar

FEb. 18-20, 2013: The 2013 Outsourcing World Summit,® JW Marriott Phoenix Desert Ridge, Phoenix, Arizona

The calendar is frequently updated. To stay current on chapter events, check IAOP’s website for details at www.IAOP.org/calendar and for events, visit http://www.iaop.org/Content/23/154/1248/Default.aspx.

IAOP Professional Members may attend an unlimited number of chapter meetings. IAOP also offers complimentary Associate Member-ship which allows non-members the opportunity to attend up to two chapter meetings as IAOP’s guest. Go to www.IAOP.org/chapters for more information and to register.

ROunD uppulSE

•New for Sunday Feb. 17! IAOP PULSE Publisher’s Cup: Mix it up on the greens with colleagues, clients and fellow outsourcing professionals for a round at the championship 18-hole Wildfire Golf Club’s Palmer Signature Course with IAOP, PULSE magazine and anchor sponsor KPMG.

•“Getting to Know You” Net-working Event: Not a golfer? Join us by the pool on Sunday Feb. 17 for an informal meet and greet.

•Champagne Welcome: Come down to the registration desk Sunday night, pick up your materials and raise a glass to another year!

•New this Year! Global Services Mall Sneak Peak: In addition to fun and informative network-ing receptions in the evenings of Monday Feb. 18 and Tuesday Feb. 19, you’ll have an additional chance to check out the exhibit hall on Sunday Feb. 17, following the champagne welcome.

•Two Global Services Mall Re-ceptions: Join the conversation

- meet potential partners

•Customer-Only or Provider/Advisor-Only Networking: Identify delegates like you and share how you turned challenges into successes.

•A Taste of Nova Scotia: Your hosts, Nova Scotia Business Inc., invite you to share in some fine wine and savories from their neck of the woods.

•Awards Luncheon: See who’s next to be inducted into The Outsourcing Hall of Fame, who will receive IAOP’s GEO Awards and celebrate IAOP’s Member of the Year.

•By Popular Demand! New Advanced Track: Advanced sessions in every round led by IAOP’s Certified Outsourcing Professionals (COPs)!

Interested in sponsoring or exhibiting, download the prospectus or email [email protected] more information and to register at introductory rates, visit www.IAOP.org/Summit.

Register now for The 2013 Outsourcing World Summit and be sure not to miss out on these special events:


Special Events Introduced forThe 2013 Outsourcing World Summit®

Feb. 18-20, 2013JW Marriott Phoenix Desert Ridge, Phoenix, Arizona


{ }

iaop wants you!

wE ArE looKING For AUThorS/bloG wrITErS…If you are an IAOP Member with something to say, email your relevent, current, witty, insightful, edgy and maybe even controversial article/blog post to [email protected].

IAOP’s bi-monthly magazine reaches IAOP’s 120,000 members and affili-ates worldwide and is prominently featured in IAOP’s Knowledge Cen-ter, Firmbuilder.com. In addition,

the PULSE Blog’s weekly updates complement the magazine and allow us to share up-to-the-minute informa-tion about the industry as well as provide a forum for relevant dialogue.

Available bi-monthly online, our e-zine features in-depth coverage of the industry, issues, trends, geographies and vertical sectors and functions; thought leadership and case studies, probing Q&As, C-level interviews and profiles; as well as exclusive and insider coverage of IAOP events,

programs, awards, research, training and certifications and surveys. And because the pace of change is faster than any magazine can publish it, we bring you regular updates, breaking news and live coverage as it happens with our Pulse blog from IAOP and guests – an online community where you can interact and engage with professionals like you on all sides of an outsourcing relationship.

user, which sends a notification to their email with your message•Leave a comment directly on someone’s profile endorsing them or implicitly inviting others into the conversation•View the integrated calendar of upcoming IAOP chapter meetings and events and keep your own personal calendar of the meetings and events you’re attending

The hub is open to IAOP Professional Members only. It is easily accessible by signing in to www.IAOP.org and clicking “Member Hub” in My IAOP.

hAvE yoU JoINEd ThE IAop mEmbEr hUb?

IAOP has created a simple, powerful social networking tool that will further help you connect with members around the world: the IAOP Member Hub. The IAOP Member Hub allows members to:

•Find people by name or by profile details – and includes profile photos to help you put names to faces•Keep track of people you know and tag people you want to know•Start a discussion thread •Send a private message to another Z

NEw! IAop QUIcK pUlSE poll

IAop’S QUIcK pUlSE poll rESUlTS:

Is your organization awaiting the results of the U.S. presidential election before making outsourcing decisions?

11% No, NoT AT All

mAybE A lITTlE 54% yES, dEFINITEly

35%

?*

{ } and the winner is…

coNGrATUlATIoNS, dENIS pErroN, cop

– you told us what you thought and you won!! Thank you for giving us feedback on our

inaugural issue of Pulse magazine!

you have won a seat to The 2013 outsourcing world Summit in phoenix, Arizona.

© iSt

ock / 2

010 do

ug Ben

nett


lETTEr From ThE dIrEcTor

Every day, IAOP hears from outsourcing professionals who tell us they need to “get up to speed” in all aspects of the outsourcing deal and that they need targeted training to help get them there. Whether they need to address how to integrate outsourcing into their business strategy, contracting, pricing or creating and managing an outsourcing team, IAOP’s Outsourcing Standards Board has developed training content using common language and processes designed to help professionals at every level optimize their relationships.

I was fortunate to attend IAOP’s 2012 North American public COP Master Class and Governance Workshop held recently in Denver, Colorado at the Inverness Resort, where we had a great group of participants led by IAOP Authorized Trainers and COP’s Rick Ostrander and Lisa Sadlik. We also welcomed two guest speakers – Eugene Kublanov, COP, KPMG, who spoke on Selecting Outsourcing Service Providers (think Global Outsourcing 100!) and Matt Lovell, Kirkland & Ellis, who kept the class participants’ full attention as he outlined the Negotiating and Contracting module. Many thanks to both of them for adding real-life experiences to the mix.

As I write this letter, IAOP is conducting a public class in the Netherlands and has classes planned through the end of the year in Kuala Lumpur and Hong Kong. Our next North America class is scheduled to start March 25 in Chapel Hill, North Carolina. For those not able to attend a live public class, private onsite training is available, and all of our training courses also are available online. While at the Denver class, it occurred to me how many outsourcing professionals are seeking and completing the IAOP COP certification. In fact, every one of the class participants raised their hands when asked if they were planning on getting certified! At lunch, a class member, who is also a PMP, complemented IAOP on keeping the bar high for both our certification and recertification criteria, and especially in assuring that professionals continue to prove they deserve the designation on an ongoing basis.

It certainly made me proud to be a director at IAOP. I hope that many of you decide to join these well trained and certified colleagues!

Best regards, Pamela O’Dell

pAmElA o’dEll is the director of corporate & professional development at IAop and can be reached at +1.845.452.0600 ext. 121 or at [email protected].

Eugene Kublanov, cop, KpmG matt lovell, Kirkland & Ellis

guESt SpEaKERSpROFESSiOnalpulSE


Welcome to our newest Training & Certification Committee Members:

IAop’s final North American cop master class and outsourcing Governance workshop of 2012

Congratulations New COPs

Jeffrey DeWitt, COP, Americas Engineering & Production Practice Lead, KellyOCG

Frank Dzierzon, COP, Clearview Consulting GmbH

Sheila Fountain, COP, Senior Business Manager IT, AT&T Services, Inc.

Rollanda Jin, COP, Manager, hiSoft

Dr. Mary C. Lacity, COP, Professor, University of Missouri- St. Louis

Lixin Liang, COP, Director hiSoft Technology International Ltd.

Pieter Meeuwis, COP, Sr. Partner, NewCoop

Catherine Munge, COP, Project Manager, Capgemini

James Murphy, COP, Advisory, PwC

Amit Sarkar, COP, Manager, Advisory Services, PwC

Charles Spevak, COP, IT & Corporate Services Procurement, Supplier Relationship and Governance, PepsiCo

Marco Stefanini, COP, Global CEO, Stefanini

Shiu Ching S. Tsang, COP, Assistant Vice President, PCCW Solutions Ltd

Leslie P. Willcocks, COP, Professor, London School of Economics

Kai Wu, COP, Division VP, hiSoft Technology International Ltd.

nORth amERiCan tRainingIAOP successfully completed the final North American COP Master Class and Outsourcing Governance Workshop of 2012 in September at the Inverness Hotel & Conference Center in Denver, Colorado.

IAOP Authorized Trainers Rick Ostrander, COP, and Lisa Sadlik, COP, led discussions on Outsourcing Governance, Managing the Transition, Developing the Outsourcing Financial Case and much more!

IAOP also welcomed expert speakers and industry professionals Matt Lovell of Kirkland & Ellis, LLC and Eugene Kublanov, COP of KPMG who shared their expert insight on module topics surrounding Contract Negotiations Module and Selecting Outsourcing Service Providers.

pRaiSE!pulSE

Diane Dulin, COP

Teresa Harris, COP

Rollanda Jin, COP

Debi Kerr-Leathem, COP

Johny Makhija, COP

Joe Tocco, COP

Bobby Varanasi, COP

Said one participant:

“Attending IAOP’s COP program in Denver was an excellent personal and professional growth opportunity. In addition to meeting global sourcing

practitioners’ that included buyers, advisors and service providers, the small diverse group provided

opportunities for discussions that were insightful and invaluable. The trainers and guest speakers

were exceptional. The information provided was relevant and very informative. I look forward to

completing the COP certification process.” { }

NorTh AmErIcAInverness hotel & conference center denver, co dates: Sept. 16-19, 2013register: contact [email protected] for current specials and member discounts

cop mASTEr clASS This in-depth training will allow participants to gain a true understanding of how to develop, execute and maintain successful outsourcing projectsfor their organization, as well as earn half the points needed for certification (75) and 20 cEhs for re-certification!

NorTh AmErIcArizzo conference center in chapel hill, Nc.dates: march 25-28, 2013register: contact [email protected] for current specials and member discounts

glOBalCLASSES/CALENdAR

cop wEbINAr Find out what it takes to become a cop with this complimentary webinar that covers the process, requirements and typical timelines for certification. Upcoming sessions: Nov. 7, Nov. 28, dec. 1912 to 1 p.m. EST. To register, visit www.iaop.org.

!

cANAdAKingbridge conference centre Toronto, oNJune 24-27, 2013register: contact [email protected] for current specials and member discounts

hoNG KoNGharbour plaza metropolisdates: dec. 4-6, 2012KpmG officeregister: contact winnie chow at [email protected]


cop QUIZNEW PLATFORM

Don’t wait - begin your path to earning an IAOP certification today. To get started, take this 10 question COP Quiz to help see where you stand. Results will be given immediately. All quiz takers will receive a special discount code at the end to be used towards their COP Application!

ASK A cop Send your questions about being a COP to Courtney.coon @iaop.org and we’ll have a COP respond.

nEtWORKing anD COnnECtingNEwS & SpEcIAl oFFErSRecertification Reminder IAOP has sent out reminders to all COPs who need to recertify by Dec. 15, 2012. If you received this notice you can begin to log your recertification points in the “MY IAOP” section in the “CERTIFICATION” section under the “MY ACTIVITIES” column. All COPs must input 20 CEHs for each year of the recertification period. Courses and programs listed in the Outsourcing Professional Course Catalog (OPCC), whether they are provided by Bridge Participants or IAOP, are pre-approved to count toward earning the COP Continuing Education Credits. Bridge Participants are corporations, associations, colleges and universities that provide quality outsourcing content that has demonstrated value to potential and current COPs, as well as to the outsourcing community as a whole.

customer, provider or advisor companies interested in customized onsite or bulk training and certifications packages, can email [email protected] for more information.

Outsourcing Professional Certification FrameworkTM (OPCF)The OPCF is designed to address the needs of individuals who work across the global outsourcing industry from entry level positions focused on the delivery of outsourced services through to senior executives leading global outsourcing programs at customer, provider, and advisor organizations. At each stage in an individual’s career there is an opportunity for both professional development and professional recognition. The OPCF is made up of three families of certifications:

Certified Outsourcing ExecutiveTM (COE) Certified Outsourcing Professional® (COP) Certified Outsourcing SpecialistTM (COS)

BENEFITS OF CERTIFICATION Certification establishes a level of professional recognition essential in a field as complex and risk-based as outsourcing. When working together across the customer-provider relationship, certification brings a common framework for success that benefits both organizations involved. Certified individuals command greater respect within the industry and their companies, higher compensation levels, and expanded and enhanced career opportunities.

Training programs are available at the individual and corporate level. For more information, visitwww.IAOP.org/OPCF.

I’M A COP*Expect better, more consistent results with me.

*



PULSE ProfESSionaL DirEcTory


“ Developing business is all about understanding people” Wilhelm Douglas, ISS Senior Business Development Manager

for Sony Mobile Communications in Lund, Sweden

The Workplace Solutions of Sony Mobile Communications not only appreciate Wilhelm for his ability to provide sound business advice, but also for his commitment to building a motivated team – based on a deep understanding of both people and business. And this is what ISS is all about. We are half a million committed people, serving your people with tailored solutions and a human touch. All so you can grow your business.

F A C I L I T Y M A N A G E M E N T | C L E A N I N G | S E C U R I T Y | P R O P E R T Y | C A T E R I N G | S U P P O R T S E R V I C E S | issworld.com/fm



PULSEgiVE yOuR aDVERtiSing impaCt a FaStER

SPECIAL PULSE PRINT ANd dIGITAL EdITION BONUS: dISTRIBUTION AT THE 2013 OUTSOURCING WORLd SUMMIT, FEB. 18-20, IN PHOENIx, AZMaterial deadline: dec. 1 } Contact: [email protected] } Special pricing for IAOP corporate members


SAVE THE DATE!IAOP Publisher’s Cup Golf Tournament

For information on sponsorship opportunities, please contact [email protected].

IAOP, PULSE magazine and anchor sponsor KMPG invite you to get a fast start to networking at The 2013 Outsourcing World Summit in Phoenix, AZ on February 17, 2013 by joining other delegates on the links at Marriott’s renowned Wildfire Country Club’s Palmer Course, one of the top golf courses in America. Reserve your own foursome or join an open team as you compete in the 1st Annual IAOP Publisher’s Cup Golf Tournament. All outsourcing customers play FREE while service providers and advisors play at a discounted rate. Space is limited so register now at www.IAOP.org/Golf.

2013 oUTSoUrcing WorLD SUMMiT PrinT iSSUE

RESERVE YOUR SPACE TOdAY!

Get Seen by Hundreds of Outsourcing Leaders Attending the Summit{ }


(877) [email protected]

Changing YOUR Outsourcing Experience



Delegates enjoyed strawberry

and passion fruit Caipirinhas -

Brazil’s national cocktail -

while visiting exhibitors in the

exhibit hall and dined on

traditional Brazilian fare

- churrasco.

Delegates enjoyed strawberry

and passion fruit Caipirinhas -

Brazil’s national cocktail -

while visiting exhibitors in the

exhibit hall and dined on

traditional Brazilian fare

- churrasco.

NETworKING IN lATIN AmErIcA PROFESSIONALS FROM AROUND THE WORLD JOINED ON OCT.1-2 FOR IAOP’S 2012 LATIN AMERICA OUTSOURCING SUMMIT AT THE UNIQUE HOTEL IN SAO PAULO, BRAzIL.

T

S

S T

pulSEFlaSh

S

T


PULSE2013 Outsourcing World Summit Preview SPECIAL PULSE PRINT SHOW EdITIONPLUS: Highlights Recap of the COP Program Hot Spot: Europe All in the Jan / Feb Issue

COming nExt in

Pulse blog } iaoppulseblog.blogspot.com

published by the magazine driven by & for … · the magazine driven by & for the...

Documents