It’s challenging times in outsourcing, with President Obama using the term to slam his Republican opponent Mitt Romney, talk of a manufacturing renaissance as companies move outsourced work back to the U.S., and worries of a global slowdown dimming the outlook for outsourcing providers.
When times get tough, it’s time to (of course) re-brand yourself. The folks at Horses for Sources have been on a quest since 2008 to eliminate the term “outsourcing” as a sham. Its rationale is that “outsourcing” really means old-style “life and shift” deals where customers transfer thousands of employees and acres of IT infrastructure to an outsourcer only to save money. HfS argues with much merit, that since many customers have already cut their staffs to the bone and rising wages are reducing cost savings in areas such as India, more customers are looking to outside providers to instead “augment” their skills as part of new global business delivery processes.
Honey, I’ve Been Augmented
“Augmentation” sure sounds nicer, and it’s hard to see a presidential candidate blasting another for helping companies “augment” their work forces. But when push comes to shove, most outsourcers (augmentors) still have to come in below the in-house cost of doing the work. When I think “augmentation” I think of hiring more people to meet excess demand, or specialists to do complex work can’t do myself. If a company is hiring only locally, it expects to pay as much or more for the extra help than for its current work force. Outsourcing promises the opposite. And whatever the rationale, it doesn’t feel like “augmentation” when a local worker loses their job to a lower-cost area.
Similar word-smithing is going on in India, according to the Times of India. Even as the Philippines has surpassed it as the global business process outsourcing leader it’s becoming harder to attract recruits for Indian BPO providers because it’s seen as low-paid huddled masses manning call centers. The real BPO story, says Ashutosh Vaidya, global delivery officer (applications & BPO) in Dell Services, is that customers want higher-level skills in areas such as cloud, social media, mobility, security, and “There is also an urgent need to rebrand our offerings to attract and nurture talent across a broad range of profiles and provide opportunities to specialize within these offerings.”
That squares with what I’m hearing from customers, and provides nice ammunition that outsourcing is actually closer to “augmentation.” But the real question isn’t branding, but how to change the industry.
Results First, Then Branding
In the auto industry, Hyundai turned around its brand image not by changing its name, but through the hard, long, quiet work required to increase the quality and reliability of its vehicles. Attempts to rebrand outsourcing, or some forms of outsourcing, are doomed if we don’t first change what we’re delivering.
For employees within customer companies, this must include:
- A fair shot, and not just lip-service, at contributing their existing skills at fair market rates as part of a global “worldsourcing” mix.
- Knowledge of the metrics used to measure them against outside players on everything from cost to value provided, to give them a chance to compete or collaborate with a service provider, and
- Honest updates about what processes and functions their employer is considering moving to outside providers, and why.
For employees within service providers, this should include:
- Enough training and career paths to allow qualified individuals improve their technical
- and/or business skills to move up the value chain with customers, and
- Feedback to schools and colleges about what skills outsourcing companies require.
And for outsourcing customers, this should include:
- Employee who are recruited and paid well enough enough to provide quality services and not jump ship at the drop of a hat.
- Employees with the language and vertical market skills to provide high-quality service to customers or internal users.
- Managers who are committed to, and compensated for, providing high-quality service over the long-term, not just short-term cost savings.
Until practices like this are the routine, and not the exception, outsourcing will face image problems no rebranding can fix.