Going Beyond Borders for Growth
What do you think of when you hear the word “outsourcing?” Often, the image likely consists of software developers in India who require a fraction of what it would cost if the work were done in-house; customer service centers focused on ensuring that a consumer, albeit located a world away, is satisfied with whatever was ordered, purchased, returned, etc.; or, very likely—jobs that have moved elsewhere. In other words, the opinions are not always favorable.
Although not exactly untrue, the above examples are not my impression. As a serial entrepreneur, time and experience have taught me that in some cases, you need to let someone else do the work. Sometimes, you need to extend beyond the core competencies of your team—and in turn, extend your enterprise.
By definition, an extended enterprise explores the evolving global knowledge economy, enabling an organization to ultimately adapt to it. By assembling a set of strategic partners in a way that leverages distinctive capabilities, an organization is positioned to take advantage of a globally distributed pool of resources. In turn, a business benefits from a greater ability to focus resources and attention on core initiatives and an overall improved business strategy.
I recently came across an area, which although in existence for decades, really struck a chord in my mind on how far outsourcing can broaden the reach and growth potential of an organization. Association management companies are for-profit businesses that handle all aspects of operations for associations, nonprofits, institutes and the like.
This outsourcing option presents alternatives for organizations—often founded on the basis of philanthropy, education, social business, career advancement or health-care support—providing efficient management and seamless administration, which lets the groups focus elsewhere, such as on their charter, priorities and members.
In today’s highly dynamic, global markets, every organization must consider extending itself beyond its walls to maintain a competitive edge. No company is immune to the influences of globalization, with the opportunities and complexities it presents. Organizations must develop the ability to continually adjust, since markets, competition, supply chains and customers are constantly being rearranged by the global economy. In addition, penetrating new markets and gaining value from a set of strategic global partners--leveraging their distinctive competencies--are necessary if an organization is to successfully take advantage of a globally distributed pool of technology and knowledge resources and to remain competitive.
This newly developed way of thinking can be summed up by the term “knowledge economy.” We believe that Global Outsourcing = Knowledge Economy. This economy is about discovering and harnessing the knowledge that can spring forth from any mind, anywhere. To successfully identify, leverage and manage this newly available knowledge, an organization must transform itself into an “extended enterprise” by establishing “value nets.”
In value nets, strategic partners nurture their distinctive competencies to world-class levels and tightly coordinate partner activities. In this way, they can continually improve their value propositions or engage radically transformed or newly created product markets. But these relationships require new process and technology configurations, as well as new types of governance.
These relationships require new approaches, including deploying processes to manage the extended enterprise, making adjustments to organizational structures to streamline decision making in a highly matrixed environment, and using supporting automation within and beyond the walls of an organization.
Companies that “get it right” position themselves for remarkable success. Getting it right begins with the strategic and holistic perspectives achieved through an increased focus on the elements needed for globalization. These elements, in turn, will allow companies to make more-informed decisions on outsourcing and to manage the results more effectively.
Are you ready to venture out in search of success?
Faisal Hoque is chairman and CEO of BTM Corporation. BTM innovates business models and enhances financial performance by converging business and technology with its unique products and intellectual property. © 2008 Faisal Hoque