KPMG released the results of the 2012 edition of the global Legal Pulse survey via a webcast on March 27. This was the third annual edition of the legal Pulse, one of the family of recurring Pulse research studies.  These Pulse surveys provide insights into trends and projections in end-user organizations’ usage of global business services (GBS) with the legal Pulse focusing specifically on outsourcing. The learnings are gleaned from third party counsel at some of the world’s top law firms that support buyer outsourcing efforts. 

One topic on which KPMG polled third party counsel was in the trends and drivers of outsourcing contract complexity. In this year’s study, 41 percent of the counsel surveyed indicated that complexity in contracting for outsourced services has been increasing over the past year (see first figure). This level is up slightly year over year with the greatest increase occurring in the European market (see second figure). One potential reason for this higher level is the challenges associated with contracting a longer term outsourcing effort in a region with a volatile and uncertain economic environment.

One might speculate that as the outsourcing market matures and buyers and their in-house and outside counsel become more experienced in contracting, that the level of complexity would diminish. This is clearly not the case. The results illustrate that the nature and type of outsourcing efforts undertaken by clients are becoming more complex from a variety of perspectives, and that the contracting for outsourced services is not getting simpler because of trends such as greater standardization or more use of cloud services. So while individual deals in some cases may become more straightforward, a client’s growing portfolio of outsourcing efforts is not.

The increase in contract complexity is not surprising given the general increase in complexity of outsourcing deals pursued by buyers in the market today. Increased complexity is driven by a variety of factors including more complex outsourcing terms and conditions, more multi-sourcing, and more use of global service delivery models. Greater complexity does not necessarily have a bad or negative connotation, assuming buyers and their service providers can adequately account for it in outsourcing contracts, service levels, and operating and governance models and processes.

To access findings from other recent KPMG market trend surveys, please view our whitepapers on the KPMG Shared Services and Outsourcing Institute.

Interviewed by Larry Janis, Managing Partner, Integrated Search Solutions Group.

LJ: What is your role and current responsibilities with IBM?

DS: As the General Manager, I’m responsible IBM’s Finance and Administration (F&A) and Supply Chain Management (SCM) Business Process Outsourcing (BPO) services worldwide. We are globally integrated across offering development, deployment, delivery and sales across both businesses.

LJ: Given the current economic environment and the buyers getting smarter do you see companies approaching business process outsourcing any differently? Please elaborate.

DS: Yes. Today, we see companies approaching BPO from a dramatically different perspective. In the past, outsourcing was all about putting out big RFPs, picking up your business, and assessing who the lowest cost provider was.  Today, companies are coming to us saying, “We’re looking for a transformation partner. We want you to partner with us, to consult with us, to help us drive our transformation agenda, and maybe even define our transformation agenda. We want you to provide the big innovation ideas that we need to drive ahead, and take the risk with us as we go down that path.” We see this as a dramatic shift. We see deals becoming much larger because they had been on downward journey, and they’re getting much more complex.

Working with an outsourcer gives clients the advantages that come from greater scale and investments in technology that are beyond their own limited capabilities. But it’s much more than that. For companies that want innovation, they need a partner that can answer questions such as “what’s the change that needs to happen, where’s the next big place we’re going to go, what’s the next big technology change, what’s the next big investment I need to make as a company to drive processes?” They need to have a transformation partner at their side that is actually on the ground doing the work. They’re not about headcount. They’re about partnership, and about transformation and innovation in a very different relationship.

LJ: Are there geographic regions and/or vertical industry segments that seem to be moving forward faster than others?

DS: We’ve seen a significant uptick in business in the financial services industry, specifically insurance, and we continue to see accelerated interest in the CPG sector as well. All other industries seem to be moving forward at a fairly consistent pace. Regionally, the emerging markets continue to be an explosive opportunity, particularly in Latin America and the Pacific Rim countries.

LJ: What is your opinion of the emerging locations, such as the Latin countries as near shore hubs for US-driven BPO engagements?

DS: The global marketplace for providing services is constantly evolving, and new locations continue to emerge. As existing sites mature, they become less competitively advantaged, so we are constantly evaluating emerging locations. What’s important is having a delivery model comprised of a variety of global, regional and “expertise” (industry or specialty-specific) centers, allowing us to provide off-shore, near-shore and on-shore solutions with the flexibility to create a mix that suits individual client requirements. This not a new trend.

LJ:  Let’s discuss the concept of success from two perspectives. First, what defines a successful candidate, what characteristics and skills do you look for?

DS:  As the BPO industry becomes more mature, we’re seeing pools of candidates that reflect this maturity in terms of both industry-specific and general business experience. In short, we’re seeing greater business acumen that’s relevant to our business. We look for successful candidates that possess the following characteristics and skills:

• Strong business acumen
• The right balance of business sense and creativity
• Proven ability to walk the walk (not just talk the talk)
• Ability to balance the view between the “forest and trees”
• Passionate in their subject; dedicated, creative and fun

LJ: Second, what has made you successful?

DS: I am very fortunate to have participated in the creation and early stages of two industries, and I’m passionate about what I do. I’ve had the opportunity to learn what partnerships are about and what being an entrepreneur is about. And I’m fortunate in that I’ve been able to take creative ideas, turn them into practical business solutions and link that overall strategy to the actual execution required in a way that we can then scale it for optimum growth.  In addition, being associated with the right people and being part of a phenomenal team has been critical. The resources I’ve been able to leverage as all of this has come together are completely unique and have provided me with an incredible opportunity.

Click here To download the pdf of this interview

Conundrum: an intricate and difficult problem

Intricate:  having many complexly interrelating parts or elements, or difficult to resolve or analyze 

Information Technology spending reductions have been the hallmark of prudent business operations through the recent recession.  Staffing cutbacks, aggressive expense reviews, competitive outsourcing, delayed maintenance, elongated replacement cycles and IT capital investment holds have all been part of the business playbook.  Not scrutinizing expenses and investments has led to business failure, so all firms have employed these and other methods to reduce costs. 

For many companies like yours, these reductions and delays have resulted in a backlog of demand for initiatives and projects.   Your legacy systems are old and brittle.  Your marketing department is clamoring for applications to reach new customers and drive sales.  Your operations team is falling behind.  Your business partners and customers require new technological ways to conduct business.  Your competition is leap-frogging you with new and improved ways of growing their business.

 So now I have a major project to execute

Now you have one or more major projects in the wings, but can you deliver?  You’ve made budget cutbacks and you’ve not tackled a major project in years.  In addition, you’ve outsourced the people who would normally lead this type of effort.

Who can lead this effort?

Projects and Project Management

Successful projects require a disciplined approach and project management is the critical link in executing major initiatives.  In fact, project management has been elevated to a business science with professional certification.  Yet despite this focus on project management and its elevated role in corporations, the landscape is littered with failed projects:

• The U.K. has run into major project problems on what is considered to be the largest public IT project of all time, a $3.7 billion attempt to provide electronic health records for all citizens.
• New York’s payroll system project was beset with massive cost overruns and other problems.  The original budget of $63 million is now estimated at $760 million.
• Technology distributor Ingram Micro announced that problems with an enterprise project caused profits to drop by over 20%.
• Montclair State University filed suit against a software provider, claiming the vendor had completely botched a project that was supposed to replace the school’s aging legacy systems.  The school estimated that it will cost an additional $20 million to complete the project.
• The State of Idaho that found that problems with a new system developed by a systems integrator for processing Medicaid claims could end up leading to the loss of millions of dollars.
• Health care plan administrator CareSource Management Group has sued its systems integrator, claiming that an ERP system project hadn’t been able to get beyond the testing phase and wasn’t the fully integrated system that was promised.
• The implementation of a new payroll system in Nova Scotia resulted in over six months of faulty paychecks.  Payroll errors, as a result of the project, resulted in a range of problems from too little pay to double the expected pay.

What happened?  It’s likely that these and other projects failed because project management is broken in the following areas:

• The projects had no business owner – there was little, if any, accountability for the project and no business executive whose career depended on constantly and consistently monitoring for delays and scope creep.
• There was weak project leadership.  The project leader didn’t have the skills or aptitude to lead the project, didn’t engage the stakeholders and management, didn’t immerse himself 100% in the project and/or had poor interpersonal skills. 

What should I do to ensure my projects succeed?

First and foremost you should re-charter your projects as business-owned projects. Treat them as critical corporate activities – like acquisitions, and apply all the oversight and controls you would to other corporate initiatives.  A corporate oversight group should be established and chartered to periodically to review status, cost, staffing, timing and issues.

It is critical that the oversight group establish proper accountability and project team discipline.  Business projects mean business leaders must be accountable.  There are no free passes when it comes to the project management of major initiatives, only hard work and commitment from all parties.

Get the right resources.  Key resources may be gone, outsourced, committed to other activities, or unavailable to support your major project.  Your staff may not be prepared to lead your critical initiative.  They may not have the time, the skills, or the experience necessary for the project.  

Once you have a project “owner’, the question then boils down to, who should you appoint as the project manager?

Your project success largely depends on the individual you choose as the project manager.  He must have deep experience with the tools of project planning; project planning software, staff planning tools, cost planning tools and reporting and communication tools.  In addition, it is critical that he has the aptitude to immerse himself in the subject of the project.  There are too many examples of failed initiatives where the project manager did not have the aptitude or desire to so embrace the project.  In addition, the project manager must have the skills and expertise to successfully engage with a wide range of constituents, from the project team, to project stakeholders, to suppliers and corporate leadership.  The role of the project manager for a major initiative differs from other lesser projects. They need to effectively work with these many parties and be skilled in not only project management, but also in corporate culture and politics, supplier management, management of ambiguity and possess polished people-skills.

You have three options:

1. Use your own staff.  This is the most popular approach.  With your own staff, you are guaranteed that they know your company and are knowledgeable of the situation and the goals and objectives of the project.  In addition, they will have a track record.  However, there are risks to this approach.  Managing a major initiative may involve on the job training and perhaps learning by trial and error, particularly if there have been no major projects recently.  If your staff is reassigned from their current work, they may be splitting their focus between their new project and their current responsibilities.  And if their current responsibilities are reassigned, the new project manager may be anxious about their future after the project is completed.
2. Hire a project manager.  Going to the marketplace to hire a project manager is another alternative.  He should know what is necessary for good project management execution and will bring project management credentials and possibly a certificate.  The cost of a project manager can be reasonable, but this approach also has risks.  It could take two to three months to find the ideal candidate.  Once on board, leading a successful major initiative requires more than project management skills. It also takes skill to navigate through ambiguity forging effective relationships with key stakeholders and corporate leaders, and correcting key impediments such as passive-aggressive behaviors and other dysfunctions.
3. Retain a seasoned executive consultant.  A seasoned executive consultant, particularly one who has led a major line organization and who possesses the necessary project management skills may be your best bet.  Such an individual has a track record of project successes and is best suited to work across the organization to achieve success.  In addition, training and mentoring your project team is part of the job.  Unlike other approaches, a consultant of this caliber is experienced at forging successful working relationships and most importantly, will keep the project on track and provide you with early warnings of project problems and remedies to avoid project delays.  In addition, an executive consultant is trained to look at the bigger picture and ask questions like, “are we automating a broken process?”, “is this being treated as an IT project, not a business project?” or “is there less-than- enthusiastic support for this initiative in the corporation?”  Finally, a seasoned consultant will focus 100% of his effort to the project and is available immediately.

What are my next steps?

You must directly control your most critical initiatives and demand accurate and timely information on progress and issues.  You must also wisely select the project manager. 

*********** 

Dennis R. Conley (Dennis.Conley@TPCo.us) is a Managing Partner for Transition Partners Co. (www.TPCo.us), a national management consultancy recognized by senior executives as trusted advisors to rapidly solve strategic, management and operational problems in Information Technology.  Gartner says: “Transition Partners prides itself on the experience level of its consultants. The majority are former CIOs or former managers of IT functions. They synergize business management and technology to bring value to their clients.” The New York Times adds: “For taking on technology trouble-shooting, there’s Transition Partners.”

But failure was not an option for Mobley, and after many a dark night of the soul he hit upon the answer that turned IBM into the fastest growing and most admired corporation in the world…

In 1955 IBM’s legendary CEO, Tom Watson Jr., gave my mentor, Louis R. Mobley, a blank check and carte blanche to create The IBM Executive School. Fresh from successfully implementing IBM’s first supervisor and middle management training programs, Mobley confidently set about churning out executives as well.

The first thing he did, in conjunction with GE and DuPont, was hire the Educational Testing Service (ETS), the same company that still does the SATs, to identify the skills that make great leaders great. Once these intellectual skills were identified, Mobley and his colleagues at GE and DuPont assumed that spitting out executives would simply mean “training to the test.”

ETS dutifully rounded up a bunch of proven leaders and tested them every which way from Sunday looking for their common skills. The results were astounding and more than a little disturbing. As Mobley put it, “No matter what bell shaped curve we drew, successful leaders fell on the extreme edges. The only thing they seemed to have in common was having nothing in common. ETS was so frustrated that they offered us our money back.”

But failure wasn’t an option for Mobley, and after many a dark night of the soul he finally hit upon the answer. Unlike supervisors and middle managers, what successful executives shared were not skills and knowledge but values and attitudes. And over time Mobley identified the values and attitudes that great leaders share.

1) Great Leaders Thrive on Ambiguity. While most of us like black and white decisions, successful leaders are comfortable with what Mobley called, “shades of gray.” Great leaders are able to hold apparent contradictions in tension. They use the tension these paradoxes produce to come up with innovative ideas.

2)   Great Leaders Love Blank Sheets of Paper. Supervisors and middle managers use a framework of policies and procedures to guide them to the proper decision. They want a plan that reduces their job to filling in the blanks or what Mobley called “following the bouncing ball.” By contrast, leaders create the blanks that managers fill in. Like some business Einstein intent on reinventing the universe, every great leader relishes the opportunity to “think things through” from scratch.

3)   Great Leaders are Secure People. Successful executives thrive on differences of opinion. They surround themselves with the best people they can find: people strong enough to hold a contrary opinion and argue vociferously for it. Great leaders crave challenges, and this means hiring the most challenging people they can find with no regard for whether today’s challenger might be tomorrow’s rival.

4)   Great Leaders Want Options. Long before it became fashionable, Mobley was a huge proponent of diversity. However his definition meant a diversity of opinion rather than the kind we usually associate with political correctness. Mobley’s great leader constantly demands diverse options from his team, and uses these options to produce creative decisions.

5)   Great Leaders are Tough Enough to Face Facts. At heart Mobley was a spiritual man who valued the Truth for the Truth’s sake. Successful executives face facts, and this means being open to the truth even when it is not what we want to hear. One of the most successful executives I know offers cash rewards to anyone in his company who can prove him wrong. Great leaders have a nose for B.S and abhor it.

6)   Great Leaders Stick Their Necks Out. It is a natural human trait to fear being evaluated. We crave wiggle room so we can deflect blame and get off the hook when things go wrong. In business what is often passed off as a collaborative effort is actually just an attempt to avoid individual accountability. Great leaders want to be measured and evaluated. They continually look for ways to measure things that may seem immeasurable, and they cheerfully accept the blame when they are wrong or fail to deliver. The old adage that success has a 1000 fathers while failure is an orphan does not apply to great leadership.

7)   Great Leaders Believe in Themselves. While great leaders crave advice, options, and strong colleagues, they all share a profound belief in themselves and their judgment. Mobley described great leaders as “people stubbornly following their star who don’t know how to quit.” Holding this stubbornness in tension with a willingness to be wrong is perhaps the greatest trick that every great leader must perform.

8)   Great Leaders are Deep Thinkers. Managers get things done. Executives must decide on the things worth doing in the first place. Though very difficult to quantify, great leaders are deep thinkers. They constantly dive below surface “facts” searching for new ways to knit those facts together. Great leaders are generalists not specialists driven by an omnivorous curiosity. They know that the answers they are seeking will probably emerge from outside business and from disciplines that may seem utterly unrelated.

9)   Great Leaders are Ruthlessly Honest with Themselves. Self-knowledge is perhaps the most critical trait that all great leaders share. Leaders question assumptions and disrupt complacency by relentlessly asking the question: “What is the business of the business?” This exercise develops and refines the organization’s mission and purpose, and it is little more than the age old question “Who am I?” applied collectively. If you are not clear about the purpose of your own life how can you provide a sense of organizational purpose for others?

10) Great Leaders are Passionate. They may be loudly charismatic or quietly intense, but all great leaders care deeply about what they are doing and why they are doing it. Perhaps most importantly they care about people. Every business is a people business, and passionately caring about people whether they are employees, customers, vendors or stockholders is an essential leadership value.

Once Mobley compiled his list, he was faced with another even more difficult problem: How do you instill values and transform attitudes? He discovered that unlike supervisors and middle managers, executives shared another trait: They were constitutionally untrainable and reacted with hostility to any effort to “brainwash” them with “training.” Worse, Mobley discovered that values and attitudes are not only impervious to typical training techniques, but hectoring people to change often had the unintended consequence of hardening existing attitudes instead.

As the result some deep thinking of his own, Mobley eventually realized that what was needed was “a revolution in consciousness” rather than the kind of step by step curriculum that leads to a single “right answer.” Taking a leap of faith, he decided that the values and attitudes he was looking for could only be brought about as a side benefit or unintended consequence of what almost might be termed “spiritual work.” Rather than converging on a super set of skills, theIBMExecutiveSchoolfostered the divergence that values uniqueness and individual authenticity.

The risk of failure was real, but if Mobley was going to produce people willing to stick out their necks he had to stick out his own first. He abandoned lectures and books in favor of games, simulations and other experiential techniques designed, not to “train,” but to “blow people’s minds.”

As for the personal accountability and measuring results, Mobley’s record speaks for itself. He ran theIBMExecutiveSchoolfrom 1956-1966. It was his students that turned IBM into the fastest growing and most admired corporation in the world in the 1960s and 70s…

Follow me on Twitter @augustturak, Facebook http://facebook.com/aturak, or check out my website http://www.augustturak.com/ for more tips and strategies for becoming a great leader – and to discover how service and selflessness is the secret to success in business and in life.

Now that the economy is starting to improve, it is imperative that companies step up their recruiting efforts.  Although many of these organizations think it is a “buyer’s market” in terms of attracting the best candidates, candidates are leery of being last person in and would rather stay put with their current environment versus the scary unknown.  In addition, many positions are newly created so it is difficult to ascertain the best requirements for a job that has not existed before.  Hiring managers are also overworked and tend to put recruiting off which just adds frustration to the process.

Although some companies including major banks have recruiting training programs for hiring managers, many others do not which can not only lead to “bad” hires but lawsuits, damaged reputations, and loss of productivity.  These companies do not realize that they should have a process that includes the following:

•    A training program for hiring managers that includes role playing, discussions about body language, recruiting protocol (i.e. do not let candidates wait too long in the waiting room), and appropriate follow up procedures.
•    A list of appropriate questions that cover a candidate’s skills and accomplishments. 
•    A list of questions that are illegal, including sex, race, children, and religion.
•    A form that hiring managers complete during the interview process that encompasses a candidate’s responses.
•    A form that the hiring manager completes after the interview that details their reactions, candidate’s nonverbal style, and other pertinent information that can be used to assess the candidate.
•    A timeline so that all parties involved in the search are aware of when the candidate was last contacted, the conversation at that time, and action steps, if necessary. 

This last item is critical because candidates become disinterested about the position if a significant time has elapsed when they do not hear from either the external recruiter or the hiring company.   Candidates appreciate a courtesy call occasionally even if there is no new information at that time, however, if this happens a lot, there is a chance they will withdraw their candidacy. 

A practice that companies are instituting also is having candidates assess a business situation and/or an operation (store, bank branch, etc.) and provide their feedback.  Although this is a good method for candidates to gain a better understanding of  the company and for the hiring manager to see how the candidate thinks, sometimes the company goes too far and it appears that they are seeking free consulting advice.  Candidates usually expect to do some “homework” but some of these analyses are quite detailed and makes the candidate feel used especially if they do not get the job.  Companies need to be careful because candidates could start to bad mouth the company and that could damage their reputation and affect hiring others in the future.

In conclusion, the recruiting process is like a dating game.  As both parties get to know each other and assess their interest level, more thought provoking questions may be asked and so it is imperative that the hiring manager know the appropriate limits.  Companies are also doing more due diligence by asking a candidate to interview with more people in the organization and return multiple times.  This is a fine strategy unless the interviews start to become redundant and no new information is gathered by either party.  A survey I conducted about a year ago asked about how many interviews a person went through before an offer was made.  The average was five to ten interviews but one person actually went on over 20 interviews before the offer was extended.  This was ludicrous but luckily for the organization, the candidate persevered and got the position.  Next time they may not be so lucky…

Beth Carter – Professional Coach, Speaker, Author, and Blogger

 E. Elizabeth “Beth” Carter recently launched Beth Carter Enterprises, a thriving business that encompasses executive and business coaching, seminars, and the DISC behavioral assessment.   She serves as a “thought partner” for executives and middle managers of small and Fortune 500 companies, business owners, and those that want to improve their careers. She has a keen ability to help these individuals reach their goals in such areas as leadership and management development, expanding marketing capabilities, and performance enhancement while motivating them to their full potential. 

In addition, she is President of Carter Consultants Ltd., an executive search and research firm she founded in 1991.  Beth holds a MBA in Marketing Management fromBaruchCollegeand graduated cum laude fromBryantUniversity.  She is a Certified Professional Coach (CPC), Certified Professional Behavioral Analyst (CPBA), and an instructor in the ExecutiveDevelopmentCenteratBryantUniversity.

From our friends at Sourcing Sage

Okay, I admit it.  I’m not a football fan. I do watch the Super Bowl though, for three reasons: the commercials, to be social, and because I’m a bit of a leadership junkie.  There, I said, it.  I’m fascinated by what leaders do in big moments, the results they achieve and what we can learn from them.  Here are my take-aways from Sunday’s game:

According to the announcers, Manningham has a habit of fading back on passes and cuts it too close to the line.  In a critical play, he went where he was comfortable catching the ball, but was out of bounds.   To work your way to the end zone, sometimes you must move outside your comfort zone.

The announcers also reported that Belichek’s practices leading up to the game included extending the halftime break from the 15 minutes allotted in a regular season game to the 30 minutes given at the Super Bowl.  To succeed, practice the way you will be tested.

Bradshaw wanted to stop short of the end zone in order to run down the clock, but couldn’t stop himself from scoring what was to be the game winning touchdown.  When you practice success, you can’t stop success.

There’s probably a book to be written about the differences in the leadership styles of the Manning brothers, but you’d have to ask someone who knew why Indianapolis residents would support the Giants. :-)