Outsourcing has become a US$4 trillion ($4.9 trillion) business. In many companies, nearly a quarter or more of the executive budget is dedicated to outsourcing. With this much at stake and with more companies using outsourcing as a business strategy, the need for formalised, professional perspectives and processes is clear. With such need comes opportunity for a new breed of talent – the outsourcing professional.
As always, the gap between knowing what’s needed and getting it done is wide; and, in this case, there are no benchmarks. Who or what do you refer to, to define the skills and competencies of an outsourcing professional? Where do you find them? How do you develop them, measure their performance and determine what to pay them?
A definition of the profession is a good place to start. The International Association of Outsourcing Professionals (IAOP) suggests something like the following: outsourcing professionals are individuals who bear the responsibility of designing, implementing, and managing the outsourcing relationships and processes for a company. These individuals work with senior management to set policy, identify business opportunities and assure quality results for the company.
The IAOP estimates that there are already tens of thousands of people who generally fit this description worldwide; yet they go by other titles, carry unrelated responsibilities and have no defined career path as a distinct and recognised group. Defining the profession is the first step to helping organisations find and develop outsourcing professionals and a necessity if people are going to be attracted to the critical roles that outsourcing professionals play.
The critical skills suggested by the IAOP for outsourcing professionals centre on analysis, judgement, communication and negotiation. Unfortunately, high-level competence in all four is a rare combination. Add the main capability components – leadership, adaptability, persuasiveness, creativity (all across multiple cultures) and critical experience such as program management, team leadership, global initiatives and change management – and the challenges in sourcing and assessment through to development and measurement become clear.
Not surprisingly, the outsourcing professional rarely comes equipped with everything necessary for ultimate success. Like other professions, a career path is necessary in which skills and experience are gained as one advances and takes on greater responsibilities. The IAOP (with the field’s leading advisory firms, DNL Global and neoIT) have constructed career paths within the three main types of organisations that utilise outsourcing services: buyer companies, provider companies and advisors. Each of these types of organisations has varying titles within the outsourcing profession, but generally, they fall under ‘analyst’, ‘manager’, ‘director’, and ‘vice-president’.
For example, at the bottom of the pyramid, a buyer organisation (a company that does significant outsourcing) might look for entry-level analysts, typically from undergraduate business or economics programs. Analysts will take many career paths in large organisations but those being groomed as outsourcing professionals should be focused on work and assignments that give them exposure to global business. They should be placed on teams comprised of workers from different cultures collaborating remotely.
After a short time, promising analysts will gain team leadership experience and may receive training in finance to bridge them into a third assignment as financial analyst or manager. In this role, talent with ‘high potential’ might eventually be assigned leadership of an important project encompassing budget responsibility, negotiation, change management and vendor/partner relationship management.
Those flagged for the next level might be paired with a mentor in senior management to prepare them for a junior executive role. They might also be sponsored for graduate-level work in business, ideally with an international component. The chosen few will be promoted into senior management positions in which large sourcing projects are identified, negotiated and managed. Ultimately, the position of vice-president outsourcing, or increasingly, chief outsourcing officer represents the apex of the profession.
For more information about career paths for outsourcing professionals and advice for organisations grappling with outsourcing talent-related challenges, DNL Global offers resources at: www.dnlglobal.com, and the IAOP has created a portal at www.outsourcingprofessional.org.
By Allan Schweyer, president of the Human Capital Institute