What would you prefer for cost cutting, Offshoring or Process Improvement? (A PI Q&A)
What would you prefer for cost cutting, Offshoring or Process Improvement? (A PI Q&A)
Given that 85% of all Supply Chain Initiatives fail to achieve the expected results, and more than 90% of all Outsourcing Contracts do not meet client requirements, your question is one of “diverse approaches to a converging outcome of ineffectiveness.”
While there are many programs such as Six Sigma, SCOR and a growing array of other “best practice” initiatives that are being presented as providing the roadmap to sustainable success through increased efficiency (of which removing costs from the supply chain is a key element), others have opted to delegate the responsibility by entering the realm of outsourcing.
In terms of outsourcing, here are a few interesting pieces of information that I am sure you will find compelling (for the corresponding case reference link contact the author):
Well-documented history of outsourcing failures
A Gartner study released at its 2003 Gartner Symposium/Itxpo 2003 stated half of then year’s outsourcing projects would fail to deliver on bottom-line promises. (Information Week, 3/26/2003)
“Few outsourcing mega deals have been successful in the past 10 years – at least 50% fail in the first year and 80% don’t produce any savings.” (Bobby Gill, senior associate, technology, media and telecom group, at law firm Osborne-Clarke) (The Banker, 3/1/2003)
. . . for every raging success, there is a bone-crushing failure. (Insurance Networking News: Executive Strategies for Technology Management, 3/1/2003)
A 1996 American Management Association study of 619 firms found that less than 25% of those that outsourced finance and accounting functions fully achieved their goals of cost reduction, time reduction, or quality improvement. (Government Accounting Office Report, 10/20/1997)
A Gartner Group survey of 180 clients in 1995 found that only 37% of outsourced IT arrangements were viewed as successful in achieving objectives (Acquisition Review Quarterly, 3/22/1999) Publish Date: August 2004
(Contact the author to obtain the link to a May 2007 article titled 10 Notable Outsourcing Failures)
As to the programs that many organizations rely upon to “lean” their operations, I have included a few links in the Web Resources section below. (NOTE: contact the author for URL links to additional resources)
Collectively you will discover that either outsourcing a problem or looking for a magic bullet from an external source will not overcome the absence of effective stakeholder engagement (see Parts 4 and 5 of the Dangerous Supply Chain Myths Series).
What would you prefer for cost cutting Offshoring or Process Improvement A PI QA - To learn more about this author, visit Jon Hansen's Website.
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My Response
Given that 85% of all Supply Chain Initiatives fail to achieve the expected results, and more than 90% of all Outsourcing Contracts do not meet client requirements, your question is one of “diverse approaches to a converging outcome of ineffectiveness.”
While there are many programs such as Six Sigma, SCOR and a growing array of other “best practice” initiatives that are being presented as providing the roadmap to sustainable success through increased efficiency (of which removing costs from the supply chain is a key element), others have opted to delegate the responsibility by entering the realm of outsourcing.
In terms of outsourcing, here are a few interesting pieces of information that I am sure you will find compelling (for the corresponding case reference link contact the author):
Well-documented history of outsourcing failures
A Gartner study released at its 2003 Gartner Symposium/Itxpo 2003 stated half of then year’s outsourcing projects would fail to deliver on bottom-line promises. (Information Week, 3/26/2003)
“Few outsourcing mega deals have been successful in the past 10 years – at least 50% fail in the first year and 80% don’t produce any savings.” (Bobby Gill, senior associate, technology, media and telecom group, at law firm Osborne-Clarke) (The Banker, 3/1/2003)
. . . for every raging success, there is a bone-crushing failure. (Insurance Networking News: Executive Strategies for Technology Management, 3/1/2003)
A 1996 American Management Association study of 619 firms found that less than 25% of those that outsourced finance and accounting functions fully achieved their goals of cost reduction, time reduction, or quality improvement. (Government Accounting Office Report, 10/20/1997)
A Gartner Group survey of 180 clients in 1995 found that only 37% of outsourced IT arrangements were viewed as successful in achieving objectives (Acquisition Review Quarterly, 3/22/1999) Publish Date: August 2004
(Contact the author to obtain the link to a May 2007 article titled 10 Notable Outsourcing Failures)
As to the programs that many organizations rely upon to “lean” their operations, I have included a few links in the Web Resources section below. (NOTE: contact the author for URL links to additional resources)
Collectively you will discover that either outsourcing a problem or looking for a magic bullet from an external source will not overcome the absence of effective stakeholder engagement (see Parts 4 and 5 of the Dangerous Supply Chain Myths Series).
What would you prefer for cost cutting Offshoring or Process Improvement A PI QA - To learn more about this author, visit Jon Hansen's Website.
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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Joe DagerJoe Dager is President of Business901, a progressive coaching company providing no-nonsense direction in areas such as Lean Six Sigma Marketing and organized referral marketing. What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe’s ability to combine his expertise with “out of the box” thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with.” - James R. If you want to learn more about Business901, start a conversation with us. We can be found @ Web/Blog: Business901.com Web/Blog: FundingYourNonprofit.com LinkedIn Profile Follow me on Twitter - Visit Joe Dager's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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Dianne CramptonDianne Crampton is an executive leadership coach, team culture consultant, author and president of TIGERS Success Series, Inc. Dianne has been helping CEO's and Executives connect their employees to their core values and goals for over 20 years using the trademarked TIGERS team culture process, which stands for trust, interdependence, genuineness, empathy, risk and success. To download a free white paper on behaviors that build strong teams and behaviors that will predictably tear them down go here. Dianne's contribution to the 2010 Pfeiffer Consulting Journal (an imprint of John Wiley and Sons Publishers) entitled TIGERS Hearted Teams is available in November 2009. Her new book TIGERS Among Us: 5 Winning Business Team Cultures And Why, Three Creeks Publishing will release in March 2010. To receive publishing discounts, subscribe to the free TigerTracks Newsletter here. - Visit Dianne Crampton's Website |
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