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Creating Successful Sourcing Stories

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♪ Music Playing in Background ♪ JOE HOGAN: Good morning, we're here with Tom Young, managing director with ISG, and also a great friend of HCLs. TOM YOUNG: Happy to be here, very much. JOE HOGAN: Thank you for joining us Tom really appreciate it. I just want to start out with, you know, you've seen quite a few service providers over the years, you've seen quite a few clients in your position with ISG, and what I'd like to maybe start out with is, very simply, how do you define success in an outsourcing relationship in all the ones that you've seen and how it's occurred? TOM YOUNG: Yeah well (coughs) I think it's hard to say it in a simple sentence but I would say when the client refers to you as a supplier or a vendor, you're probably not in success mode for these kinds of services. But if they view you as a partner, and the relationship is collaborative, and relies less on framework and formality of the agreement, and more on 'how do we make things work together', so the more informal it is probably the more successful it is. And so the informality has its issues, so you've got to make sure there's some structure to it but, you know if our working relationship together, as a partner, is informal it's more likely to be successful. JOE HOGAN: So from your perspective, you know obviously you've seen companies like HCL, right, over the years, some do very well, some not do so well. What do you think are some of the best practices are from a sourcing provider, from a service provider side, okay, in terms of being able to work not only with you, as a third party adviser and a consultant, but also with a client? TOM YOUNG: Yeah, I think, you know, I said when we were talking on one of the panels earlier about trust and transparency being critical. I would encourage service providers to be open as possible and be as flexible as possible. And open up being transparent because that will beget transparency from the buy side. I think that transparency is going to yield that informal communication; it's going to allow collaborative solutions and, you know, mutual valued discovery of around how you can do better business together. JOE HOGAN: Make more TOM YOUNG: (coughs) JOE HOGAN: easier make more direct, more personal you know most service providers, HCL is probably no different in some respects, you know, want to have that relationship directly with a client. So even in that they're really looking at trying to establish that relationship very directly, almost to the detriment of walling out the adviser or the consultant. And, you know, what would you say to service providers that want to try to do that? TOM YOUNG: Um, well, I know there are situations where advisers and intermediaries become obstacles to that relationship and that could even be procurement, right, be an obstacle to that. I think if you get to the point where you're trying to develop the relationship in the eleventh hour, when a transaction is going to happen or a purchase decision, you too late. The relationship starts outside of the brokerage of commerce; so if I want to do business with you from the firm, I'm developing a relationship with you and then ultimately business will come from that. But if I wait for you to have a buy decision in the marketplace and I'm one of the vendors and I say 'hey let's go have a relationship' it's too late. Right, because that cycle has already started. And so I say your best advisers, you know I know, when I'm out on the field I try to facilitate those relationships because I don't want to get in the way of it; because that ultimately successful and it's good for, for both parties. JOE HOGAN: So from, you know, from your perspective and, you know, you were on a panel earlier today TOM YOUNG: yep JOES HOGAN: how do you see the industry changing? How do you see this changing as we're going forward because one of the things we see when clients, as they moved to second and third generation sourcing, they're sitting here saying 'okay I don't need an adviser for the whole thing; I need an adviser based on rifle shots'. We're seeing that trend began to develop and the other is clients are becoming a lot more smarter about how they buy these services, because they become a lot more educated and they're a lot more confident in themselves TOM YOUNG: right JOE HOGAN: so how do you see that changing and basically the effects of that TOM YOUNG: Well JOE HOGAN: for both of us? TOM YOUNG: Yeah the landscape is changing tremendously so if you go way back, say ten fifteen years ago, we had these one neck to choke models where one vendor we get all this huge scope and take over called 'your mess for less' and then we started to see over the last decade the fragmentation into logical towers. And now we're seeing further fragmentation to almost to out-tasking at a level where point solutions with technology is inserted into the supply chain. And, but when you do that it's like buying a car through the spare parts; at the end of the day you still have to have a car that works. And so there's going to be lots of opportunities for vendors do service integration to help bring together logical components and put that together. So if I'm looking for a partner, a third party partner, I'm looking for someone to help me solve my problems, not to say they're going to provide all those problems, but that they're going to facilitate getting it done. So you may leverage an EMC solution or a net app solution for storage you're not saying 'well we have to do it ourselves' right, because you're just there to facilitate it, and I'm looking for you to help me solve my problems. So again, where this is going to evolve to I think is successful relationships are going to be collaborative and informal to help me solve my business problems in a very rapidly changing environment. JOE HOGAN: So that means even from an IST perspective the methodology that, you know, you all started out with in terms of your heritage TOM YOUNG: yeah JOE HOGAN: That needs to change as well? TOM YOUNG: It does. The RFP by its very nature is a prescriptive approach. It says 'I know what I want' and if focuses largely on optimizing P in a P time Q model right? JOE HOGAN: Yeah. TOM YOUNG: It's an advanced procurement if you will, but, where the market is moving to is you want to start optimize the product of P times Q, or even more so, the business outcome. JOE HOGAN: Okay. TOM YOUNG: So in order to do that I need to take a step back and not be so prescriptive to the market. I'm going to come to you Joe and say 'hey here's my problem, I've got this environment, here's my business situation, here are my objectives; what can you do for me?' Now if we have a relationship and you know my business you're going to say 'you know what you really should do is grab this over here, mash it with this, redo this, and I have a new platform' it's like that sounds interesting let's talk more. And, but, the nature of that solution is based on a relationship, based on your understanding of my business, and my flexibility in willing to have an informal dialog around how to solve that. Then once we come to that sort of we'll call handshake I want to then put some codification around but just not a thousand-page document; that's too much. JOE HOGAN: Yeah that's a little bit hard to carry. TOM YOUNG: It is, it is, and frankly people don't use it. JOE HOGAN: Right. TOM YOUNG: Right. They use it when things go bad but they don't use it to maintain the goodness in a relationship. JOE HOGAN: Well the problem is any relationship is dynamic. TOM YOUNG: That's right, that's right. JOE HOGAN: So, you know, I really appreciate the conversation this morning. Can you just leave us with maybe a couple of thoughts? What do you think some of the best advice you can give to a client today looking to use a third party adviser? How to do that, as well, to a service provider? TOM YOUNG: I would tell people on the buy side right now to start to pick their third party partners on soft criteria, not hard criteria. The hard criteria being who won the RFP, or who won the bake-off for a purchase decision. Soft criteria would be: Do I like them? Do I trust them? Do they know my business? Do I think they can solve my problems? and Do they have a good reputation? So if I use those five soft criteria, I'll use those to pick somebody and then we'll figure out how to do business together. And that's what I would do. I would go from hard to soft in this marketplace. JOE HOGAN: What about what advice would you give a service provider in working with an adviser? TOM YOUNG: I would make it easy to do business. I used the analogy in our panel about the difference between the RFP structure being like a marriage, a very formal and documented, hard to get in and hard to get out. I would make easy to get in the business and, and make it easy for the buyer to say 'hey if you don't like it you can leave'. So you want to make it easy on, easy off so that you can have that trust, mutual collaboration, and an informal aspects of a relationship so that I feel comfortable doing business with you. JOE HOGAN: Well Tom thanks a lot, I really appreciate your time today. TOM YOUNG: Thanks Joe, good luck! ♪ Music Playing in Background ♪

Video Details

Duration: 8 minutes and 36 seconds
Year: 2013
Country: United States
Language: English
License: Dotsub - Standard License
Genre: None
Producer: HCL Technologies
Director: HCL Technologies
Views: 48
Posted by: christineward on Nov 12, 2015

Creating Successful Sourcing Stories. June 6, 2013. Retrieved from ----- No changes have been made to the video except the addition of accurate close captioning. ----- Watch the video to learn about the changing trends in the outsourcing industry as buyers are moving to second or third generation sourcing to solve their business problems. The video has Joe Hogan, HCL America Inc. interviewing Thomas Young, ISG to get his expert opinions on the best practices for providers and buyers, and more.

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