Ah, the honeymoon stage of a business relationship, that early stage when everyone is enthusiastic, when you envision benefits that will continue to multiply, when you celebrate each small increment of success. You’re focused on the objectives of the agreement. You talk frequently. You nip and tuck and shape exactly the relationship you know you need.
Culture shock. That’s not something most would expect conservative icon Rolls Royce to embrace, but that’s exactly what the company sought in its outsourcing relationship with EDS.
You’re in the final stages of your outsourcing agreement. You and your outsourcer have worked out pricing, processing, staffing. Then up pops the devil in the form of third-party software licenses.
Outsourcers that have the infrastructure and more importantly the expertise within a given process will be able to capitalize on that opportunity.
If you look back five years ago, most people would think of the value of outsourcing simply in economic terms as a way of reducing costs and restructuring the balance sheet. I think the focus now is far more on is there a better way to leverage technology in a very competitive environment where we have pressure to move quickly.
There are five lines of business that will define EDS today and going forward into the next five years: we will continue to play a major role in the systems technology management arena that’s outsourcing, systems integration, development and maintenance, we’re also building a robust business process management business that’s supply source, teleservices, data mining and warehousing, imaging, environmental and safety, and logistics, consulting, cosourcing is a distinct line of business, and electronic markets card processing, electronic funds transfer, EDI, and internet/ intranet in some ways actually being a direct participant as opposed to a supplier.
Outsourcing in the traditional sense a way for companies to save money is changing. The clients I talk with now view outsourcing, or some form of it, as a viable option to not only saving money, but to actually help them improve their competitiveness.
It’s no secret, but there’s a major shift to outsourcing functions or business processes. What is interesting is how different buyers and sellers of these functions or business processes are going to market.
This relationship was chosen based on the strong affinity between supplier and customer in particular, the high degree of dependence of MedPartners on ACS.
It’s a growth industry that has not yet hit its stride. For instance, in the IT and customer care field, the breadth of what firms are now considering and are in fact outsourcing has grown so dramatically over the last year that it has become an accepted business style.
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