Outsourcing, The New Paradigm in Productivity?

Michael Porter at World Economic Forum.

Business Strategy Guru, and Harvard professor, Michael Porter defines productivity "As the value created in a days work" and emphatically says "The value created in a days work sets the wages you can earn". How true! You couldn't articulate individual, organisational or national productivity any better. Any more clearer.

Outsourcing can help increase value created in a days work and it is my belief, organisations who strategically outsource its low value, mundane, or non core tasks can significantly increase its productivity, if done well.
By outsourcing non core activity it allows greater focus on higher value creating tasks within the organisation, the acute specialization of a firms value chain. Staff can be moved / retrained to focus on higher value creating, higher fee earning business, working closer to the customer. Companies that outsource will grow not shrink, and as they grow will create more, higher value employment opportunities contrary to to popular beliefs of increasing unemployment.

The acute specialisation of value chain achieved by outsourcing will also help firms be stronger and to withstand tough market conditions due to inbuilt efficiencies. A lot more resilient than those who are slower to move. Apple, Virgin and the major Australian banks are some of the best examples, even the global financial crisis, the worst economic times we have ever seen, they grew and all made multi billion dollar profits when hundreds if not thousands of less efficient firms were going to the wall.

Yet the words, outsourcing or outsourcers, spell fear in most ranks within firms and nationally. Most feel initiatives to outsource will increase national unemployment. When computers were being widely introduced in corporate and government organisations in the 80's and the 90's we had the very same fears. We feared that computers would take our jobs away. We would lose control of our departments and our organisations and security would be significantly weakened and compromised.

When we now look at the paradigm of efficiency brought about with advent of computers, it is cleat that unemployment which averaged around 5.2% in 2012 is nearly half of the 9's, 10's & 11's we were experiencing most of the 1990's. Computers helped transform organisational productivity and change the paradigm of work itself, in the private and the public sector. Today we can't operate without computers even in our homes let alone at work.

If you talk to a firm of accountants today about outsourcing their mundane work, the work their staff have their head buried in, their usual fears are loss of control, security and jobs. This is no different to our fears with computers back in the day. It is the same if you speak to most firms about outsourcing their software development or the mere maintenance application software. I well remember how a CFO asserted to me in the mid 80's "these computers will take away our accounting jobs and we will have no training grounds for young accountants". I wasn't brave enough to tell him as a young consultant his fears were unfounded and he was wrong but history has proven so. Especially considering the importance, and the growth of the accounting profession today. It is the same for many other professions and industries.

Outsourcing if done well, with clear objectives, implemented with skill, can bring in significant improvements in productivity and value creation for all types and sizes of organisations. Small, medium, big, and the public sector. If done badly for the wrong reasons, unclear goals or implemented poorly it will be like those bad computerisation projects we have all heard of and know. The blame we often leave with the outsourcers or the software providers and not where it belongs

If we as employers embrace outsourcing we can help our staff move up the value chain, adding greater value and creating increased opportunities for income and efficiency. I was one of those people that helped usher in computerisation to firms in the mid 80's to the 2000's.  Today I believe outsourcing   can help strategically transform organisations and its competitiveness. Like anything, to do it successfully, you need to do it right and for the right reasons.


Dinesh De Silva is CEO of Nexgroup Asia Pacific, he and his team are available to speak to media /  organisations or groups as a keynote / guest speaker on the above. Contact him +612 8003 3342, via twitter @dineshdesilva or www.nexgroup.com.au 

NexGroup Asia Pacific, is a World Class Outsourcing business, providing Software development & Accounting, Finance and Legal BPO Services. 

Australia's 2020 Goals for a Digital Economy

National Digital Economy Strategy was launched today at CeBit 2011 by  Communications Minister, Senator Stephen Conroy. Additional investments to facilitate the strategy to be announced.

The Government defines the digital economy as a globally connected network of economic and social activities enabled by information and communications technology. The Digial Economy Strategy encompasses goals for eCommerce, eHeath and distance education. 

To measure progress in realising its vision by 2020, the government has set the following goals. Worthy goals that can clearly propel our nation as a leading digital economy.  It will now take courage and the discipline to implement these strategies to fruition by 2020. 

Lacking in Vision

I have discussed below what I feel is however significantly lacking from the core of its strategy. The strategy to build an army of Australian firms that lead this digital world. The goals outlined will essentially make us good consumers of a digital world, my vision however is to see our nations firms playing a significant role in the creations of the digital world in helping create companies like Google, Facebook, Amazon, Twitter, eBay. It is important for government to drive that strategy as a core to building a digital economy. More on this after the summary below.

Broadband

Australia ranks in the top five OECD countries in the portion of households that connect to broadband at home.

Business

Australia ranks in the top five OECD countries in relation to the portion of businesses, and not for profit organisations, using online opportunities to drive productivity improvements, expand their customer base and enable jobs growth.

Sustainability

The majority of Australian households, businesses and other organisations will have access to smart technology to better manage their energy use.

E-health

As identified in the National E-Health Strategy endorsed by the federal, state and territory governments, 90 per cent of high priority consumers such as older Australians, mothers and babies and those with a chronic disease, or their carers, can access individual electronic health records.

By July 2015, 495 000 telehealth consultations will have been delivered providing remote access to specialists for patients in rural, remote and outer metropolitan areas, and by 2020, 25 per cent of all specialists will be participating in delivering telehealth consultations to remote patients.

Education

Australian schools, TAFEs, universities and higher education institutions will have the connectivity to develop and collaborate on innovative and flexible educational services and resources to extend online learning resources to the home and workplace; and the facilities to offer students and learners, who cannot access courses via traditional means, the opportunity for online virtual learning.

Teleworking

Australia will have at least doubled its level of teleworking so that at least 12 per cent of Australian employees report having a teleworking arrangement with their employer.

eGovernment

Four out of five Australians will choose to engage with the government through the internet or other type of online service.

Digital divide

The gap between households and businesses in capital cities and those in regional areas will have narrowed significantly.

All noble intentions, lets hope the government has the courage and the discipline to imprlement these strategies to realise these objectives by 2020.

Still lacking as part of this core vision and the strategy is a vision to help build Australian technology firms and talent to create enterprises that will lead the world in the digital economy taking advantage of the nations significant brand equity and creative talent.   The US has done this successfully through building its IT Industrial Cluster, the Silicon Valley, that help build companies like Apple, Google, Yahoo, Facebook, Adobe, YouTube, HP, etc etc... creating a trillion dollar export market.

Even Nations like India and  Ireland have built huge national capabilities with strong vision. Unfortunately the ministers vision is clearly lacking on this part! Australian companies given the national focus, supported by a Industrial/IT Cluster in its true sense (Michael Porter, Competitive Advantage of Nations) can take this nations talent to achieve in new vistas, not seen before but completely within the Australian capability.


(Summary of goals courtesy - Australian CIO Magazine 31 May 2011)

Dinesh De Silva is CEO of Nexgroup Asia Pacific, he and his team are available to speak to media , organisations or groups as a keynote / guest speaker on above. Contact him +612 8003 3342, via twitter @dineshdesilva or www.nexgroup.com.au 

NexGroup Asia Pacific, is a World Class Outsourcing business, providing Software development & Accounting, Finance and Legal BPO Services.

Technical Skills : Java, Microsoft Dot Net, PHP, Python, Ruby, C#, Android, Iphone,  CA Service Desk, CA ITSM,  CA NSM,, Spectrum, , eHealth. 

Outsourcing Include : Offshore &  OnShore software development, Software maintenenace, Outsourced developers, Offshore Accounting ,  Bookkeeping,  Online accounting,, Account Payable outsourcing, Offshore accounting, Legal Process Outsourcing  (LPO), Legal Services, Paralegal Services, Litigation support, Document Review, Offshore Legal Processing, Legal Research, Legal resources

Goal Achievement ! Yes Passion can help!

Most of us run through daily life focused on achieving. During waking hours we are chained to a computer, run from one meeting to another, while attending to the constant demands on our time via phone, text, email & twitter... Its a flurry of never ending activity. All this due to an incessant need to succeed or just meet obligations. However things don't always go to plan, its easy to get distracted or disheartened when we run into issues while constant challenges that make the achievement of our goals ever so hard. Challenges in our lives come from various sources, environmental, corporate, internal politics even family. When such challenges come our way you wonder what more do I have to do??

Reinventing yourself Mid Career - Get back that spark !!

As a keen analyst of personal and organisational success, I had an inspiring discussion with a successful yet a spirit filled person earlier today. What I mean by spirit filled is, someone quite content, very content in fact, at peace with her self and the environment around her, yet looking for ways of achieving further success. Now this is great. You dont often meet such people in a given week, so I always enjoy such conversations and this was over lunch on a beautiful summer’s day in a lovely café in Sydney's CBD.

During our conversation, I was asked for my advice on how you recreate or re-invent yourself especially in your middle years once you have achieved your goals that you have set for your self in your youth and reached a level of fulfilment. No doubt a degree of complacency often transcends with time with the achievement of goals and the long journey travelled in between.

Listening to the man on the street

                       

Around 2pm this afternoon, I was stopped by a turbened Indian gentlemen on the bridge that connects Greenwood Plaza and Elizebeth Plaza in North Sydney. I am not sure why I stopped. His first words were "Sir you have a lucky face" and I thought who is this person ? is he a con man ? and started to walk suspiscously, he however asked me to wait a minute in a very compelling kind of a way which I did, he then asked me a few questions which I answered. The man then wrote a note on a piece of paper which I was asked to hold in my palm... he then went on to ask me what my wife's name was and my age which I reluctantly answered. At this point he told me a few things that are happening right now in my life rather accurately which I was very curious about and then asked me to look at the piece of paper... I was astounded to see my wife's name and my age written on it .... Amazingly accurately with the right spelling, phew !! ... and I was unnerved.

Does any one know how this stuff is done ? I am very keen to know.
The man had a very peaceful and serene look on his face... I was yet uncomfortable with this unknown man from the street telling me about my self... you feel completely vulnerable yet you want to know more... I kept wondering if I should go back and ask him more, but.. I was sure that life is what you make of, you create your success with your own deep desires, you make your own luck by etching it in your subconscous mind and taking planned and consistent action towards your goals.. day in day out whilst working on our weaknesses that often inhibit us from our true potential. However through planned action to first understand them and then to improve upon our weaknesses will certainly help to overcome them over time. I for one often thought I spoke too much and listned too little When I analysed myself a few years ago. (My wife reckons I have many more which I prefer you not to know :-) )
Joining Toastmasters and the advice of my inspiring wife (you know what I mean :-) has helped me with improving this weakness to be a much better listener while being a better speaker... more improvement to happen here ...

As I close, I am firm in my belief it is us through our deep desire and action that we create our future. Not by words of wise men on street corners or nay sayers at work, amongst family or friends however compelling and convincing they may sound. One of my favourite quotes best articulates this message, "Lets set our course by the stars in the sky and not by the lights of passing ships" .

Have a GREAT DAY ...