Working as a specialist, for a specialist; an often overlooked advantage to outsourcing is that it makes a core competence out of what may otherwise be viewed as `peripheral’ skills. That can be a real boon to specialist employees and manager

Working as a specialist, for a specialist; an often overlooked advantage to outsourcing is that it makes a core competence out of what may otherwise be viewed as `peripheral’ skills. That can be a real boon to specialist employees and managers – Brief Article

As well as being the Inventory Operations Manager at Greenwoods Communications, Peter Allen is a member of the key Strategic Alliance Team. This is a team of Greenwoods managers which sits down with its opposite numbers at a client company at the opening stages of an outsourcing arrangement to thrash out the process.

And the abilities and experience of that team are vital to the whole outsourcing arrangement, says Allen. “There can be all manner of complications that companies might not be aware of at the outset. The idea is that the team helps pull in the key people on both sides and the specialists below them, right at the beginning.”

The Strategic Alliance Team then meets regularly to thrash out all the issues that Greenwoods knows will crop up: things like property ownership; human resources issues and so on.

“When companies get into outsourcing, they don’t always know who they need to involve in the process. You soon discover that there are a lot of competencies within the company that you need to involve early on.”

The fact that Peter Allen has worked on both sides helps. As a senior member of the purchasing department at Cable & Wireless he managed that company’s inventory and was involved in C&W’s own outsourcing arrangements. He subsequently joined Greenwoods to apply all that expertise.

He says the big difference–and the reason that outsourcing operations such as network build and consumables supply works so well–is that these operations are seen as peripheral and `un-sexy’ in the network operator environment.

“People tend not to get involved and don’t really understand what’s being done–that’s understandable in a big organisation where you have all these other things going on. The specialists within a big player like Cable & Wireless will tend to be more interested in the big ticket items like the network switching equipment or whatever and they apply their expertise to procuring that,” says Allen. The reality is, however, that a huge amount of cash is tied up in large numbers of `un-sexy’ consumables such as cable lengths.

“We had about 100 million [pounds sterling] worth of inventory,” says Allen. If you can apply procurement expertise to the management of that inventory you can obviously return significant savings.

As with all outsourcing arrangements, then, the ability of the outsource specialist to bring scale to the activity by undertaking it for several customers, is key. That means that expertise can be applied where it couldn’t be justified before. And it also means that what might have been considered an `un-sexy’ specialism in a large network operator, has become a highly valued core competence in an outsource specialist like Greenwoods.

“The great thing is that we deal with consumable products on a day-to-day basis,” says Allen.

“We can see what’s going on in the market and we can see what costs can be taken out. Once we understand these things, we can take them into other companies and use our experience to benefit them.”

“The problem with outsourcing from our point of view is that if it’s working well people just take it for granted, so there’s always the possibility that they don’t understand just how much we’re saving them, or how efficient we’ve made the process. There can be huge associated efficiency benefits over time,” he claims.

So it’s very important that outsourcing be understood as a process, rather than a commercial event. “For many companies all outsource can be a way to achieve short: term objectives to do with one-off capital or operational expenditure savings. Once these short term objectives have been met they move onto other activities. Often if people just spent a bit more time, they would find we could save them more and more on an ongoing basis,” he claims.

COPYRIGHT 2002 DMG World Media Ltd.

COPYRIGHT 2002 Gale Group