* Interview with Chris Carrington, Capgemini president of Americas Outsourcing
Last week I provided an overview of Capgemini, one of the winners of a multimillion-dollar systems integration contract with General Motors. I recently spoke to Chris Carrington, Capgemini president of Americas Outsourcing, who gave me an overview of the company (see last week’s newsletter). This week, I will share Carrington’s thoughts on trends in outsourcing. Here is our Q&A:
Q: How do you view the shift from mega-deals with one vendor to multi-sourcing with many vendors?
A: I am very excited about multi-sourcing. Firms like [outsourcing consultants] TPI and Everest Group have been driving purchasers of outsourced services toward best of breed solutions. They have proven that best of breed does exist and it is possible to purchase individual solutions. The result is multi-sourced deals. TPI has forecast some $100 billion of renewals in outsourcing contracts over the next 24 months, and many of these will take the multi-sourcing path. It is part of the maturing of the outsourcing market.
Q: As one of the firms being awarded significant business in the recent GM re-sourcing process, what do you see as the real difference in GM’s new outsourcing model?
A: Many firms have taken the multi-sourcing path by outsourcing individual functions one piece at a time. GM has done many pieces at once. In the process, they created a governance model to co-ordinate this activity for many functions with several vendors at the same time. The governance model is the real difference. It will likely change how deals are awarded and managed in the future. GM is also causing many vendors to become more global, just as they caused EDS to become more global.
Q: Have you seen an impact on outsourcing from the rising popularity of ITIL (Information Technology Infrastructure Library)?
A: Yes, I would say that today we see six out of 10 RFPs with a section on ITIL. Capgemini is in a different place with ITIL in Europe vs. the Americas. It is more prevalent in Europe, and is coming up more often in the Americas. We have had more focus in the past 18 months on SAS 70 audits as a result of Sarbanes-Oxley compliance. [For more about SAS 70, click here.]
Q: What are your top three things a company should consider in getting ready to outsource?
A: 1. Come to an internal decision to be philosophically ready to outsource and/or offshore. You really need to understand your core business – what is important. If this is not clear, get a consultant to do a business analysis on who you are and if you are ready to outsource.
2. Understand the scope of what you are outsourcing. Make sure to define your decision criteria up front so you know how you will decide what you are outsourcing and how you will select a vendor. If you have no internal experience in running such a procurement, get outside help. The process will run smoother and have a definitive end point if the procurement is directed by experienced people.
3. Understand the things that make you different as an organization and align yourself with a vendor that fits with your culture. With offshore capabilities and collaborative relationships with suppliers, any vendor should be able to compete on price. So you should not make your decision on price. Pick the vendor on cultural alignment and then work out how to make the price work for everyone involved.
These insights are fresh from the field and align with other information that crosses my desk daily. I would invite any comments or differing views, as I always enjoy the feedback. Please send comments to mailto:dtwing@enterprisemanagement.com.
