About: François Zielemans

Website: http://sourcingthoughts.blogspot.com

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Posts by François Zielemans:

  • Outsourcing 2010: repairing of crisis contracts?

    Because of the economic crisis have many companies deployed aggressive scenario’s to cut cost. This resulted among others in stretching the definition of ‘non-core’ activities in order to outsource them to an external party (including selling off offshore captives to cash rich vendors). Read more

  • Outsourcing from an M&A perspective

    There are various elements outsourcing can learn from the way mergers and acquisitions are handled. So is the attention given by Private Equity (PE) firms to the ‘value’ of the exit something outsource practitioners (both on client and vendor side) can learn from. A Private Equity company receives most of its return on the initial investments when it sells off its participation. For this reason have M&A practitioners gone to great lengths to calculate the expected exit price. Their approach cannot be applied 1-on-1 to outsourcing, but the section in the typical business case dealing with the exit can be greatly enhanced by applying a more sophisticated approach of calculating the value of an exit and its impact on the overall business case. Read more

  • Sustainable outsourcing is more than just green

    I see slowly some more ’sustainability’ clauses entering outsourcing contacts, but within IT contracts are they in most cases limited to targets related to CO2 reduction. Applying sustainability to outsourcing is however much more than drafting a green contract. It involves another way to look at your own company, the external environment and thus also your sourcing strategy. The (financial) benefits can actually increase results by a smart application of the modern aspects of this theme. Two examples where things went wrong and thus cost money: Read more

  • Improving sourcing decision making using ‘Options’

    A recent Dutch survey showed that half of the companies outsourcing do not use a business case as a means to evaluate the performance of their outsourcing. The reason may be that the business case models mostly used do not allow for incorporating flexibility. The tyical Discounted Cash Flow (DCF)-based model is very static and does not cope well with change. The world around us is however changing ever faster. Read more

  • IT outsourcing with business value in mind

    A streamlined IT value chain with capable actors can provide more added value at a lower cost level in a sustainable manner. This requires the IT organization to understand the fundamental aspects and dynamics of the business processes. Understanding how the Business makes money and which risks it faces is for many IT organizations however still a major challenge. Most IT organizations therefore still base their sourcing decisions on traditional IT silo’s. Read more

  • Is IT-outsourcing starting to hurt the business?

    IT-organizations are now more than ever pressured to cut their cost. This is among others due to the perception of many business managers that IT is a cost centre which adds limited value. And activities with a limited perceived value are those which get the highest cost reduction targets. Read more

  • Do Europeans look differently at offshoring?

    I visited a couple of months ago a senior IT executive from a large insurance firm and we discussed among others their sourcing strategy. The executive mentioned they are considering (offshore) outsourcing certain additional activities, while they are at the same time contemplating whether some of the IT activities they outsourced more than ten years ago should be insourced again. Read more

  • Does offshoring make IT organizations dumber?

    The July/August issue of Harvard Business Review contains an article from Gary Pisano and Willy Shih titled “Restoring American Competitiveness“. The authors argue that, against the general consensus, American companies will be unable to develop the next generation high tech products due to underestimating the impact of sending their manufacturing offshore. If this is true, will something similar happen to the IT service industry? Will the next generation of high added value IT services come from Asia and not from Europe or America? Read more

  • Outsourcing and Madoff

    In a recent interview of Z24 (Dutch internet news channel) and the Chief Risk Officer of Fortis Bank Netherlands (3 billion revenue 2008, 184 billion in assets) the risk management practices of the bank were discussed. The CRO stated among others that the board was closely involved with all new product introductions, and determines how new products fit into the risk profile of the bank. Read more

  • Get European companies a better deal?

    Even though the American market retains its top position as the largest market for Indian and other foreign service providers does this not automatically mean that American companies get the best deals. Many foreign service providers were already worried for some time about the depreciating dollar, but the economic collapse really showed how vulnerable one is, if completely dependent from one market. This has resulted in those offshore vendors who have the cash, to double their efforts to get European clients in. Those vendors which do not have the seize to invest in European (non-UK) front offices are now looking frantically to open other sales channels like partnering with smaller European vendors. Read more

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