Service Outsourcing

Nobody gets fired for outsourcing to India, but they should

Jon-Butler_100.jpgBy Jon Butler, an expert in technology operations, outsourcing, offshoring and nearshoring

For many years India was the jewel of the American outsourcer's eye. English speaking resources coupled with a flashy rate card proved hard for companies to resist. In fact, outsourcing to India had developed into such a standard solution that it recalled another era, during which everyone bought standard IBM solutions. This happened so frequently that it was not uncommon to hear the expression "no one ever got fired for buying IBM".

But as Forbes writer, Duena Blomstrom, explains in her well-crafted article on fear-induced purchasing, Nobody Gets Fired For Buying IBM. But They Should, this risk-aversion strategy is fraught with a false sense of security.

Blomstrom explains that frequent IBM buyers did not feel entitled to purchase anything different from the status quo - even if there were better options. In fact, not falling in line with prior purchasing history would always make them look like risk-takers and irresponsible stewards of company resources. So, they repeat the same safe behaviours even when they know there are better options.

Today, many people see 'buying India' as a safe bet for those same flawed reasons.

Understanding and managing IT vendor relationships: do they matter?

Gunarathna_Koneru_200.pngBy Tiran Gunarathna, Senior IT Category Lead, Infosys Business Process Management; and
SriKrishna Koneru, AVP - Strategic Business Practice Head, Sourcing and Procurement, Infosys Business Process Management

We often hear about vendor management in sourcing and procurement organisations, but how frequently do we talk about vendor relationship management? Are they the same or are they different?

Coronavirus has exposed just how delicate our procurement eco-system really is

IanThompson_100.jpgDo we need to fundamentally re-imagine what our procurement eco-system looks like? Ian Thompson, Regional Head at Ivalua, thinks so and here is why...

Procurement perspectives: justifying consultancy fees

StephenBauld_100.jpgBy Stephen Bauld

One might wonder why, as a consultant for over a decade, I would write about overpriced consultants. Being in this industry, I often hear stories about the high costs incurred when securing consulting services; these stories are widespread and frequent.

Indeed, it is surprising how many consultants are so sensitive to this issue. So much so that they actually make a point of declaring in their advertising material that "we are not going to charge you outrageous fees". Much of the adverse newspaper commentary in relation to the cost of consultants to government is exaggerated.

The catch-22 of outsourcing relationships

KateVitasek_100.jpgCustomers and suppliers alike maintain that they value innovation. But, far too many outsourcing contracts are full of perverse incentives that inherently disincentivise suppliers from investing in innovation. The result? A catch-22 where outsourcing relationships become a race to the bottom, a situation where organisations think they are spurring on innovation but, in reality, they are fostering the status quo.

Kate Vitasek, Professor in Supply Chain Management at the University of Tennessee, unpacks how transaction-based sourcing models are preventing innovation and shares how to move away from them in supply relationships.

Don't treat your employees like suppliers

KateVitasek_100.jpgThe war for talent is 20 years strong and has changed the way companies recruit and retain talented employees. While great strides have been made in how companies treat employees, many are still in the dark ages when it comes to how they treat their suppliers.

Just how backwards? Well, what would happen if employees were treated like suppliers are every day? This is the question posed by Tennessee University Professor in Supply Chain Management, Kate Vitasek.

6 steps to optimise your procurement workforce

DougLeeby_100.jpgTo become more agile, organisations are re-evaluating their workforce strategies. Although strategists often talk about 'total workforce management', what their business functions - procurement included - need most is something much simpler: total workforce optimisation (TWO).

For most business functions, human capital is the most important asset and its largest single operating expense. It is also a constant concern for executives who fear they do not have, and cannot acquire, the right mix of top-tier talent to compete and succeed, says Doug Leeby, CEO of Beeline, which provides software solutions for sourcing and managing the extended workforce.

Join us at Smart Procurement World's Gauteng Indaba on 18 & 19 September where our panel will discuss how you attract and retain great people to work in a public sector procurement department.

Logistics: an opportunity for competitive advantage

TafaraSvosve.jpg"What business strategy is all about is, in a word, competitive advantage. The sole purpose of strategic planning is to enable a company to gain, as efficiently as possible, a sustainable edge over its competitors. Corporate strategy thus implies an attempt to alter a company's strength relative to that of its competitors in the most efficient way" (Kenichi Ohmae, 1982).

Recessionary markets and increasingly fierce global competition are two of the main challenges facing organisations today in their quest to gain and sustain competitive advantage. However, providing a level of service that stands above the rest can rarely be achieved if a supplier fails to focus on its logistics strategy, argues Tafara Svosve (MSc Supply Chain Management; CMILT). A new management approach that recognises and locates logistics in its rightful place on a strategic platform (rather than merely a support activity) is required if organisations are to achieve and sustain competitive advantage, writes Svosve in this month's SmartProcurement.

Contracts: Paying for what works

SusanDeWitt.jpgAre performance clauses and outcomes-based contracts the answer?

Dr Susan de Witt from the Graduate School of Business at the University of Cape Town unpacks contract performance measurement in this month's SmartProcurement.

Effective governance and controls can give suppliers a competitive edge

MorokePhajane.pngThird-party risk management is currently an important topic for most corporate entities. In order to minimise their risk exposure, corporate entities are carefully scrutinising their third-party suppliers. Moroke Phajane, an admitted attorney and expert in third-party risk management, unpacks how third-party risk management can create a competitive edge, in this month's SmartProcurement.

Whose services are your really procuring?

ToniJackson.jpgThe workforce is fundamentally changing and it's increasingly important that you can access the skills you need when, where and how you need them. But with the increase in corporate usage of external workers comes additional challenges and risks. Toni Jackson, Director of APAC at Fieldglass, an SAP company, in Sydney, unpacks the implications.

Influence of procurement departments on marketers

 

JohannaMcDowell.jpgAgencies working – or hoping to work – on major corporate accounts in the advertising, marketing and communications industry can no longer ignore or misunderstand procurement departments and their importance in winning both government and corporate clients.

Johanna McDowell, Independent Agency Search & Selection Company (IAS) managing director, warns that the B-BBEE Amended Codes of Good Practice released by the Minister of Trade and Industry in mid 2016 are designed to ensure that procurement is taken seriously by companies that intend to survive, in this month’s SmartProcurement.

What makes SA such a popular outsourced destination?

 

lerato.jpgUnder increasing pressures to cut costs and achieve efficiencies in the current global macroeconomic situation, organisations look for destinations that are not only cost-effective, but can also provide quality services especially in terms of high-end processes. In this regard, South Africa has, to a large extent, been able to establish its offshoring mettle; a number of European, US and Australian companies have started offshoring complex processes to South Africa.

According to current estimates from Business Process Enabling South Africa (BPESA) - the BPO industry association in South Africa, the South African BPM sector employs 225 000 people and contributes more than R50-billion to the national annual GDP. The country accounts for 1% of the global business process and information technology outsourcing market.

How has South Africa established itself as the next emerging offshoring hub?

Lerato Sithole, Director of Supply Chain Management: Business-Process-as-a-Service for Deloitte, discusses the factors that are making South Africa a popular offshoring destination, in this month’s SmartProcurement.

Market consolidation "key trend in procurement outsourcing"

 

MarketConsolidation.pngMarket consolidation and the inclusion of extra services will be among the most significant trends driving the global procurement outsourcing market, according to research.


Market research company Technavio analysed emerging trends to find the biggest factors that will influence the sector up to 2019.

4 risk management strategies to ensure supply chain continuity

 

JimMakuwa.jpgA prudent supply chain professional knows that each transaction is worth its value or the negative impact of it going wrong and has to be treated as such.


High-value transactions need scrutiny commensurate with the risk that the organisation may be exposed to if something goes wrong. In other instances the transaction value may be intrinsic, but the effect may be devastating and it is for these reasons that one has a backup plan.


“It boils down to being inquisitive. Considering that risk is prevalent in supply chains, ‘What if’ can help prevent a fatal judgement error,” says Jim Makuwa, a tutor for Commerce Edge Academy, in this month's SmartProcurement.

On-demand strategic sourcing and category management services

 

Chain.jpgAs sourcing becomes increasingly responsible for supplier relationship and contract management, personnel are often stretched too thin across multiple categories and suppliers to effectively manage expenditure. Furthermore, headcount within procurement groups typically grows at a rate insufficient to meet those increasing demands.


Utilising the internal procurement organisation in collaboration with third-party support can lead to more innovative solutions, new technologies, optimised supply chain strategies and improved category management.

In 5 Days 2000 Procurement Professionals will meet to network, learn and do business!

 

LoyioGola.jpgWith only a few days to go, 3000 attendees have confirmed – Smart Procurement World, Africa’s largest supply chain indaba, kicks off on Tuesday, 9 September.


More than 110 speakers will share their procurement and supply chain insights with delegates in 6 different conference streams.


Hear from supply chain heads from Absa, Coca-Cola, Anglo American Platinum, Sasol and Transnet. Technology enablers from SAP and Oracle will inform the technology panel discussion.

Declining SMME index indicates narrowing entrepreneurial supply base

 

Closed.jpgThe Absa SMME index declined during Q1 2014, with a total quarterly decrease of 2.2% and a yearly decrease of 3.8%. The index declined to a two-year low in Q4 2013 (from 95.6 to 93.4).


Although South Africa has not yet entered a recession, the overall index clearly reflects slower growth over the last few years.


 

 

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