Recognize That You Will Underestimate the Task, and Plan Accordingly


Recognize That You Will Underestimate the Task, and Plan Accordingly

Over the course of the past several years, I have talked personally with more than 200 executives experienced in outsourcing. I cannot recall a single one who claimed to have accurately estimated the time and effort the initiative would require. Not one. And some of these relationships fell squarely in the commodity category.

Let’s face it. An ongoing business, with all its processes and people, is a complex organism. And each one is different. Your outsourcing provider may be more skilled at your particular flavor of industrial ‘‘organ transplant’’ than any other company, but I guarantee that you will both uncover issues you did not expect. The good news is that most unexpected issues just take hard work to resolve. You will want to plan accordingly. What do I mean by that? Create slack.

Microsoft, a company that experts consider one of the most capable in the world at managing large projects, puts one week of unscheduled time in every project plan. Over time, the company has learned that this week will be required. They don’t know exactly how the time will be used at the outset, but they know they will need it.

In transformational outsourcing, you can expect to use more people during your transition than you have counted on. All the bonuses and penalties in the world won’t make the work go faster. Put a 15 percent staffing contingency in your staffing plan. These are individuals at the worker level. Don’t kid yourself that a few smart managers will be an effective substitute.

You can expect to make changes in what you want to do and what you need to do. In addition, your provider will hit unexpected snags. Put a 15 percent financial contingency in your plan to cover these unexpected costs. This should be over and above what your provider said they would charge you. Why not just hold the provider to its contracted price? Because the competitive process that gets you the best price may also incentivize your provider to cut corners. This kind of short-term thinking is your worst enemy if the big payoff is long-term enterprise transformation.

Transforming an enterprise may be one of the most daunting leadership challenges in the game. If you will be stepping onto that particular playing field, however, you will be gratified to know that you can use outsourcing to carry the day. And furthermore, if you personally engage and play with passion as I have outlined above, you are very likely to accomplish the transformation you envision. Since, unlike most management initiatives, you shall get your wish, frame it carefully. The next two chapters talk about the different ways you can use outsourcing to execute transformations and how to aim your approach to meet your strategic targets.




Outsourcing for Radical Change(c) A Bold Approach to Enterprise Transformation
Outsourcing for Radical Change: A Bold Approach to Enterprise Transformation
ISBN: 0814472184
EAN: 2147483647
Year: 2006
Pages: 135

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