Why Sourcing Change?

Most stakeholders have to acquire new skills—or change their ways of working– to function in a business model resulting from the decision to outsource or implement shared services. Unfortunately, most sourcing processes focus primarily on developing business cases, and select providers/sites/scope that does not acknowledge the necessity to change the way stakeholders behave and work. Yet business case attainment is predicated on the abilities of these stakeholders to adopt, embrace and expand the new model, hence the need for sourcing change management.

What changes in sourcing? We tend to think of sourcing change as merely communicating a location or “buy versus make” decision, but the changes are far more extensive than moving services to Kolkata, Kuala Lumpur, Krakow or Kalamazoo. A sourcing decision has a myriad moving parts; it may affect relationships with internal or external clients, move work from 40 year olds to 22 year olds, change the performance expectations of the retained staff while affecting the employment of large teams, impose new technology, implement new policies and procedures, alter workflow, change the cost structure, introduce a new culture, change the organization’s structure or adjust the bar on quality. In effect, there are many moving parts, and unlike more traditional change management initiatives fostering a change in culture, or organization or even technology.

Sourcing change is revolutionary. Unlike traditional change management methodologies which have the latitude to evolve over the span of the program, sourcing change is tied to a business case bracketed by time and expected to deliver a specific stream of benefits. There is limited time—often less than a year—to develop and implement a strategy, and persuade stakeholders to accept the need for or adopt new ways of working.

Sourcing change starts on the day someone says “we need to consider moving to a new services model. Often organizations first think about change management when the provider or the new shared services location is selected, and the business lines/retained team/affected staff/business partners must be informed. By this time, change management is an afterthought and relegated to the goal of making difficult messages compliant and palatable. By introducing change management in the first stages of the sourcing lifecycle, organizations are able to:

  • Develop key change principles and messages to govern program design and development
  • Develop the right solution or range of solutions that best respond to the organization’s ability to adopt the change
  • Design a deployment strategy that positions the program for success, staging implementation to exploit the efforts of potential champions, promote early success through pilots, or avoid radical transformation that the organization is not yet ready for
  • Identify key obstacles to change such as business line or geography rejection or competing initiatives
  • Identify the full range stakeholder classes and what will drive them to accept, adopt and embrace change
  • Start the all-important marketing and listening process, setting table stakes and developing trust

Sourcing change is perpetual. Change management does not start at the announcement and stop at so-called steady state, but rather is an ongoing process. As long as the delivery of any business process or function is reliant on human intervention, and the cast of characters, scope, and processes on both sides of the delivery model evolve, managing change is imperative. A program of interventions and responses must last throughout the sourcing lifecycle to deliver successful change.

Sourcing change is 30% logic and 70% emotion. Because of sourcing’s high table stakes—realization of a business case, the need for active, visible support of stakeholders, and executive skin in the game–developing a strategy that appeals to logic while lessening emotion is critical. Each stakeholder group has a different take on change, so connecting on a range of levels is key to managing justifiable perceptions of reality. This is uncomfortable for most corporate managers—we are more comfortable dealing with left brained logic as opposed to right brained, emotive issues.

Sourcing change in each organization is unique. No two cultures are exactly the same, and the business conditions which prevailed during the most recent initiative are no longer valid. “Corporate-speak,” personalities, leadership imperatives, and business pressures vary. To be effective, timing, scope, staging, response models, human resources approaches and communications must be designed to be effective in the reality which is the sourcing organization, not taken out of a change textbook.

Sourcing change patterns are predictable. High growth organizations’ abilities to embrace sourcing initiatives are distinctly different from those of mature organizations. Center led organizations, no matter what the industry, have discernable response patterns as compared to business line-led companies. And companies whose assets are knowledge workers, such as law firms and consultancies, have predictable responses to sourcing change. Harnessing these patterns enables organizations to develop most effective plans and interventions

Sourcing change success is dependent upon planning. Surprisingly, few organizations develop a comprehensive change plan when implementing shared services and outsourcing. It is either styled as an appendage to transition planning, implemented as a human resources appendage, or forgotten altogether. But planning is key to understanding where to start, how fast to move, when to react, and how to alter deployment in order to deliver results with change that sticks.

Sourcing change depends on the good will and performance of soon-to-be redundant staff. In no other change management context are there staff who are expected to stay around for as much as a year, cheerfully and efficiently transferring their knowledge to others who will take over their jobs. Traditional change initiatives hold out a carrot of better roles as a result of change; in sourcing change, the majority of staff do not have that option. Maintaining performance of staff during transition, and ensuring that managers have the tools to cope is of paramount importance in sourcing change.

Sourcing change is about mitigating the usual responses…and those that are unforeseen. Sourcing of business functions is now mature enough that is possible to anticipate patterns. Most organizations forget that it is possible to predict a full range of reactions, and their implications for sourcing success in order to develop response models which are effective throughout the sourcing life cycle.

Sourcing change is best led by those who know the secret handshake. Bringing in a merry band of consultants does not work given the pace and implications of change. Effective organizations equip their front line troops–sponsors, stakeholders and transformation managers—to manage change as part of the program, not treat change management as a separate, stand alone work stream.

Sourcing change is more than bringing in HR or communications. Those who sponsor, promote and implement the change are at the front line. They must be armed with the right tools and techniques in order to deal swiftly with everyday issues in context. The job cannot be relegated to human resources and communications leaders; rather, they are an integral part of the team, contributing a wealth of expertise relative to organizational and staffing issues.

Sourcing change means providers must constantly change. Providers cannot lead buyer change, but they must be knowledgeable about their clients’ change challenges…and make the right changes in their organizations to be seen as the right solution for the market. Smart providers continually evolve their market, sales and solutions approaches to provide their buyers with the leadership they seek,,, and deserve.

Welcome to Sourcing Change.com. Look through our resources to foster better outsourcing and shared services change. Share your challenges and solutions. Connect with us through our blog. And let us know how we can help.

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