|
Contact Us! |
-- Woody, Toy Story II, Disney/Pixar
So there we are in a too small conference room with all the other folks on the team, even the remote guy. Some consultant is flipping power point slides and blathering away about cost-based accounting, or activity-based costs, or basic activity costing…I'm thinking about lunch…blah, blah, blah…offshore…out-task…outsource…and then the back of my brain screams WAKE UP! There are going to be changes, they don't want to play with us anymore, panic, panic. We're falling into the black pit of broken toys.
Okay, stop the film, calm down, and unclench your fist. Seriously, you are going to need to be calm, and put down that stapler. We're going to work on this together. You've got friends, keep reading, and it is going to be okay.
Maybe the whole job is being outsourced or, increasingly, just a part of the job. Who came up with this? Remember those job descriptions the team just finished updating for management, and all those time allocation surveys? Those were used to calculate the base costs of each of the team's functions. Those small percentages of time focused on core and non-core activities. Those activities might have included scanning documents, fixing IT problems, running reports for clients, or getting that last minute project done for sales.
Did you unclench your fist like I asked you to…we can wait…good. Ask yourself, "Did I really want to spend time faxing invoices or running ad hoc reports?" Those activities aren't taking your career "…to infinity and beyond." Accept it, someone else could do those things faster, cheaper, overnight, and they might even be grateful to take on these gofer tasks full time. So accept that there are going to be changes. It's just possible with the right point of view, and a little strategic thinking, this could work out to your advantage.
You need a job makeover, and you need it now. If you wait, it will end up being one of those ambush makeovers by an 'artist.' By looking at your current job activities we can separate the core parts of your job from those that can be outsourced.
Let's assume that 100% of your time is working time (leave out sick, personal, or holiday time for now). Also assume a pretty stable work environment, with no current rollouts or major changes in the technology or processes you use in your job. Looking at the average figures, generally 40% of a full time equivalent (FTE) can be outsourced. That 40% is made up of a number of small jobs such as process documentation, reviewing and finding information, archiving information, running reports, and sifting customer feedback. Note that we are talking about the group of tasks that make up your job, not about you or your inputs directly.
This is work that could be done by someone else cheaper, because it is highly process-based, and the outputs can be moved as bits rather than atoms. These types of tasks have become easy to find in the services marketplace. They are the services equivalent of commodities. When a task becomes a commodity, the only real differentiator for the buyer is price. The buyer assumes that the quality will be of a standardized level and that resources are readily available.
The bad news is that anything that is a commodity is probably cheaper from an outsourcing vendor. The good news is that you can expand your core activities to fill the 40% taken up by commodity work. Showing how much more revenue you can add by doing two more days a week of productive core activities, makes a very strong case for keeping you even if your employer dishes out your job. If there are more than three people in the group with similar roles, that could mean adding the equivalent of one more full time person (1 FTE) to the team focused on core revenue generating activities, for the cost of an offshore person doing commodity tasks.
What makes an activity a commodity?
This list does not mean that management will choose wisely. A good example is after-sales support, often outsourced with poor results. The deal sounds good at the onset: same number of call center agents, plugged into the same scripts and databases, for a fraction of the cost. What is lost is the ephemeral good will of the customers, empathy for customer problems, enthusiasm for fixing errors, key up-sell opportunities, and insight into customer trends.
Often, by the time line management hears about outsourcing, it is too late to stop it. The shareholders have been promised cost savings, and it falls to the front line to deliver the dollars. So railing against the process will not do a lot of good.
Instead, focus on the value added through expanding your role with more profitable tasks, assuming that the less glamorous stuff goes outside the company.
The following are a few ideas to get you started:
Think of this as a list of additional duties rather than a whole job change. Generally these tasks are either new customer requirements that must be met or opportunities to generate revenue, so add them to your current core job tasks.
It may be possible to bid for your own job against the outsourcer. It sounds horrible but can be very persuasive, if you and your coworkers can get organized. What the team will need is a proposal showing a plan to reduce total spending while improving revenue. Arguments for the team can include: value of good will, intellectual capital, revenue from new projects, lower training costs, flexible scheduling, high service levels, and faster turn around during peak delivery periods. Arguments against outsourcing can include: high startup costs, costs of transition, customer resistance, data security issues, lower service levels during transition, need to dispose of real estate, and the cost of laying off workers.
Getting the numbers to support your arguments will take some work, so get your manager and a financial analyst involved. Make sure to use the same set of figures that management will be using to make a decision. For example, mid-level managers generally don't look at the cost of a person to the company, just the salary figures (which can be half as much as the fully loaded costs). Find someone outside your group, but not on the decision committee, to review your proposal and give your team feedback.
Give management some options, such as:
- Keeping the team as it is, while making productivity gains.
- Outsourcing a part of the team's activities while taking on more work.
- Going to a contingency work model, with a core team supplemented with contractors and part time employees.
Remember to point out that the company has already made an investment in infrastructure, buildings, IT, training, and software which are generally not transferable to the outsourcing vendor. They would have to pay these costs again in the form of overhead, or startup costs. Last but not least, the outsourcing vendor has to make a profit; your team just has to cover ongoing costs. Even if they took over the entire team, with all the fixed assets, at the same salaries, they would have to charge 15-30% more to cover overhead and profit.
Just to be safe, carefully consider whether or not your career would be brighter with an outsourcing vendor rather than your current employer. Can you be promoted to management and stay in your current career field? Does the company value your skill set as a competitive edge? Take a look at job boards for some of the business process outsourcers that handle your skill set and see if they have openings for the types of jobs you want to have in the future.
Now on the practical side, here are a few activities to prepare for a round of outsourcing. At home:
At work:
For more information, winning strategies and dirty tricks, contact the author directly, Karen Sopko at Karen@ckventures.com.