Soylent Outsourcing

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Remember the 70s sci-fi flick "Soylent Green"? That's the one where Charlton Heston discovers the secret behind the movie's title and shouts the film's famous line: "It's people!"

Well, some of what I'm seeing out there suggests that the industry needs to rediscover the "secret" behind outsourcing if we want to keep improving clients' businesses: It's people!

In days past, two of the main motives for hiring a company like mine to help plot a sourcing strategy were 1) to avoid "The Big Mistake" -- the hidden "gotcha" that can blow up a sourcing deal -- and 2) to deal with the various human factors outsourcing raises.

Those were the early days of outsourcing, when clients were looking to get employees -- AKA "in-scope personnel" -- off their payrolls and onto the balance sheets of service providers. Clients had many sincere concerns related to the complex job of transitioning "human assets" to a service provider. Besides attrition, these included knowledge transfer, business continuity and, of course, human-resources considerations.

But with the rapid adoption of offshore delivery models, we're seeing less "human capital" -- by which I mean smarts and institutional knowledge -- transfer from client to service provider. This could be one of those "Big Mistakes" waiting to happen. By rushing to achieve cost savings and focusing on the benefits of labor arbitrage, our industry might be short-circuiting its long-term ability to achieve sustained productivity improvements for clients.

Don't get me wrong: This isn't a slam on the offshoring abilities of some very capable providers that are much in evidence today. Rather, it's a call to action that we need to remember the human dimension of "services" and be sure we're addressing them with the same strategic emphasis -- and eye on the future -- we bring to other aspects of sourcing.

Delivery models have evolved, but services are not a black box. And I don't think they ever will be. There are so many intangibles between the design of a sourcing model and what it produces that we will always need to bring strategic considerations to the table. If we don't, I predict we'll soon be reading about more offshore deals failing because the transition process from client to provider did not include the wisdom and experience of personnel. 

Let's not depersonalize our business the way they depersonalized the food chain in "Soylent Green."