Michael Corbett, chairman of IAOP, offered rich, pointed remarks about the current state of global sourcing this morning at the IAOP meeting, touching on the global economic crisis and its impact on outsourcing, Peter Drucker’s prescient views on outsourcing and the recent political debate about working with offshore organizations. Some of his key insights:
Current Economic Crisis:
The best quote of the day so far: “Is the economic crisis an opportunity to strength the core or allow outsourcing to be swept up under the tyranny of immediacy of getting through the current month or current quarter?”
- Client businesses are faced with a fundamental choice on how they look at current and future outsourcing relationships. “Am I going to view the relationship as a vendor-customer relationship, leading to pressure on lower cost? Or is this a real opportunity to redesign and rethink the relationship in order to produce more value for everyone?
- In Corbett’s view: Executives with a broad sourcing vision are the ones looking to seize the opportunity to strengthen relationships in this time of economic turmoil.
- Very few clients have embraced outsourcing as a profession. They tend to bring in outside executives to oversee operations. Very few clients have incentives tied to outsourcing performance by the actual people handling the functions.
On the political debates about outsourcing: There’s no doubt you’re going to have the rhetoric. But at the end of the day, from a real regulation standpoint that will tie the hands of business? I don’t see that happening.
- Recalling Drucker: Corbett referenced an article written by Peter Drucker back in 1988 which famously asked companies to “sell the mailroom.” Although not called outsourcing at the time, the premise for taking business functions and turning them over to partners who specialize in the actual function leads to good social policy as advancement is oriented toward skills and competency-based performance.