Predictions for 2011 in Shared Services & Outsourcing

With the uncertainties of 2010 and the Great Recession almost behind us, corporations and service providers will need to start looking at and driving deep process improvements in their back office functions. By the very nature and as the name implies, back office process improvement took a back seat in the overall scheme of things. With limited budgets and resources, corporations deployed their scarce resources and talent to “front office” type of activities such as increasing top line growth or driving quick wins in cost reduction through labor cost arbitrage or dealing with cash management to remain afloat. In other words, corporations "hunkered down" to survive.

However, it’s now time to start focusing on the back office non-core functions that was perhaps neglected in the past either due to circumstances or by design. By only focusing on labor cost arbitrage, corporations will only be able to take their cost reduction initiatives up to a certain point. Also, corporations generally deployed their expensive internal or external resources to those functions that either gave them the maximum return on investment or helped grow their core functions. And again back office took a back seat.

So here are my predictions / recommendations:

• Corporations who have not yet thought of shared services, should start actively pursuing, planning and quickly implementing a strong shared services function in one or more back office areas. And those who have already implemented a shared services model, should start driving continuous improvement (CI) or process improvements (PI) using common sense PI principles and tools from their CI/PI tool kit.

• Corporations who have outsourced their shared services functions to low cost external service providers need to start leveraging the labor cost arbitrage. They need to start utilizing strong domain expertise of the service providers to make quantum improvements in their business processes by driving out waste and inefficiency. While the domain expertise does not come cheap, it certainly is a lot cheaper than the domain expertise that corporations can acquire in their developed markets. This will give corporations a double benefit; low cost transactional arbitrage with a lower cost transformational advantage as well.

• For external service providers, here’s your opportunity of increasing your top line. Focus on CI/PI and help corporations make quantum improvements in their back office processes rather than simply throwing low cost resources to push transactions out of the door. You will not only help companies become better and more efficient; you will in turn help increase your top line as well.

2010 was the Year of The Tiger. 2011 is the Year of the Rabbit. Let’s take the roar of the tiger and the speed of the rabbit to drive quantum process improvements!!

Happy New Year!!

Managing the Outsourcing Relationship

Managing the outsourcing relationship is a journey. It's a journey where miracles do not happen overnight. For a successful outsourcing relationship, it requires hard work, dedication and a little bit of the Irish luck. For a two-part presentation, Managing the Outsourcing Relationship, based on a real life case study, please view the presentation on Slide Share.

Puns for Educated Minds

I get a lot of frivolous spam email; however, this one, even though it has nothing to do with outsourcing or shared services, is quite entertaining. Read on ....

1. The fattest knight at King Arthur's round table was Sir Cumference. He acquired his size from eating too much pi.

2. I thought I saw an eye doctor on an Alaskan island, but it turned out to be an optical Aleutian

3. She was only a whiskey maker, but he loved her still.

4. A rubber band pistol was confiscated from algebra class, because it was a weapon of math disruption.

5. No matter how much you push the envelope, it'll still be stationery.

6. A dog gave birth to puppies near the road and was cited for littering.

7. A grenade thrown into a kitchen in France would result in Linoleum Blownapart.

8. Two silk worms had a race. ;They ended up in a tie.

9. A hole has been found in the nudist camp wall. The police are looking into it.

10. Time flies like an arrow. Fruit flies like a banana.

11. Atheism is a non-prophet organization.

12. Two hats were hanging on a hat rack in the hallway.

-One hat said to the other, 'You stay here; I'll go on a head.'

13. I wondered why the baseball kept getting bigger. Then it hit me.

14. A sign on the lawn at a drug rehab center said, 'Keep off the Grass.'

15. The midget fortune-teller who escaped from prison was a small medium at large.

16. The soldier who survived mustard gas and pepper spray is now a seasoned veteran.

17. A backward poet writes inverse.

18. In a democracy it's your vote that counts. In feudalism it's your count that votes.

19. When cannibals ate a missionary, they got a taste of religion.

20. If you jumped off the bridge in Paris, you'd be in Seine .

21. A vulture boards an airplane, carrying two dead raccoons. The stewardess looks at him and says, 'I'm sorry, sir, only one carrion allowed per passenger.'

22. Two fish swim into a concrete wall. One turns to the other and says 'Dam!'

23. Two Eskimos sitting in a kayak were chilly, so they lit a fire in the craft. Unsurprisingly it sank, proving once again that you can't have your kayak and heat it too.

24. Two hydrogen atoms meet. One says, 'I've lost my electron.' The other says 'Are you sure?' The first replies, 'Yes, I'm positive.'

25. Did you hear about the Buddhist who refused Novocain during a root canal? His goal: transcend dental med ication.

26. There was the person who sent ten puns to friends, with the hope that at least one of the puns would make them laugh. No pun in ten did.

Congratulations, UCONN Women's Basketball Team

Connecticut coach Geno Auriemma, left, poses with his team after the No. 1 Huskies defeated No. 22 Florida State 93-62 Tuesday to win their NCAA record 89th consecutive game.

This isn't about streaks or men or women. It is about excellence. Relentless, consistent excellence over a period of years. Doesn’t matter if you watch women’s hoops or ignore it all costs. It is about giving the "customer" superior performance in your "product". That's the take away here ... relentless focused execution.

“One thing that’s non-negotiable is that the one thing we have in common is we settle for nothing less than the absolute best we give you every single night. They did it and we’re doing it. Everything else to me is meaningless,” Auriemma said.

Well done, UCONN Women's Basketball Team.