From: Global Services
By: William Atkinson

Develop a holistic view for managing outsourcing risk, where all the functions that have a responsibility for controlling risk work together.

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From: Global Services
By: Howard Baldwin, Contributing Web Editor

A new Gartner survey reveals a transition in the outsourcing market.

How is outsourcing changing among enterprises? In several surprising ways. A recent Gartner survey of 945 enterprises shows that current expectations are changing but that new best practices are slower in coming. In this Q&A, analysts Kurt Potter and Allie Young talk about new trends and a few surprises.

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From: Global Services
By: George Donovan, Principal Consultant, PA Consulting

Understanding the limits of service-level credits is the starting point for effective negotiations.

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From: IOMA
By: Andy Dzamba

Often overlooked in the move to AP shared services are the "soft" elements involved, such as managing the people involved. Here are four tips to help you successfully deal with these elements.

1. Beef up your leadership skills. It takes a strong leader to manage the transition to shared services. Reason: You'll get plenty of resistance on all fronts. Make sure you incorporate change management techniques into your plan.

2. Train, train, train. To overcome your staff's fear of the change--and to help them deal with the new setup after it's up and running--give them extensive training. If you think you have given them enough--give them some more. Under-training is one of the most common problems.

3. Spread accountability. The success of AP shared services will depend on the efforts of three groups of players: the business units, the task force charged with implementation, and the new shared services department itself. To foster cooperation among these three groups, all of them should be held accountable for the success of the initiative. To do this, you need to make sure everybody has a clear understanding of their roles and responsibilities.

4. Make quality the prime focus. Customers--both internal and external--will worry most about service quality and lack of control. Therefore, this should be your top priority. Many organizations use service level agreements (SLAs) to accomplish this.

From: Global Services
By: Shyamanuja Das

Employee unions and various politicians have long blamed offshoring for overall job losses in the U.S. economy. Business lobby groups who perceive "labor arbitrage" as a means for cutting cost and a sure-shot way to impress Wall Street, have defended it vehemently. They have used studies by thought leaders to argue that in the long-term offshoring creates value for the U.S. economy. McKinsey Global Institute, in a study three years ago, estimated that for every dollar spent on offshoring by the U.S. companies, $1.47 worth of value is created for the global economy, out of which close to $1.14 comes back to the U.S. economy. Free-trade proponents, among them economists like Gregory Mankiw and Jagdish Bhagwati, have also maintained that offshoring is not very different from any other international trade, and at the end, everyone gains. President Bush, during his India visit, defended offshoring by saying, it creates markets for American products.

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Jim Fox, partner at DataServ, the leading on-demand service provider of document management, workflow and F&A outsourcing solutions, along with Geoff Jarvis, Managing Director with IFG Sourcing Advisors, delivered a presentation at International Quality & Productivity Center's (IQPC) Shared Services West Conference in Scottsdale, AZ to a group of leaders of Shared Services organizations.

Fox's presentation, titled "Positioning your SSO for the Future" outlined ways to identify the trends and technologies that are required to ensure a company's SSO does not become extinct. Members of the audience became better positioned to determine what technologies are needed for the future, what services add value and what activities could be outsourced or off-shored.

"It was great to share ideas with these Shared Service leaders," commented Fox. "I enjoy conferences like IQPC's Shared Service West because I can provide valued insights to these business leaders and understand the new challenges they face in driving their businesses. The conference is a great way to exchange ideas and experiences with businesses working to improve process, control and profitability. It also helps us make sure our services continue to be focused on helping these companies meet their business challenges."

DataServ, the leading on-demand service provider of document management, workflow and outsourcing solutions, announces that Shane Ferral has accepted a position as a Document Solutions Specialist. Ferral will be responsible for second level Information Systems (IS) support for multiple clients, varied new client implementation activities and miscellaneous projects to support or enhance DataServ's solution delivery capabilities. Shane is a graduate of Southern Illinois University at Edwardsville.

From: Outsourcing Center
By: Kathleen Goolsby, Senior Writer

Lessons from Outsourcing Journal:

• Buyers that experience a failed outsourcing relationship usually want to put in place a structure that treats the symptoms of the bad relationship with the previous supplier. This is a mistake because, unless they determine what caused the original relationship to go south and fix that underlying problem, they will just hatch a new problem by over-treating the symptom in the new relationship.
• A best practice is that the buyer should inform the new provider (or providers, if it's a competitive bid) that it just exited a failed relationship, should relate some of the things they believe caused the failure, and should ask the provider for its help and guidance in avoiding that same kind of behavior.
• After a failed relationship, the services provider and the client's executives must communicate to the end-user community why the new outsourcing engagement will be valuable, exactly how it will benefit them, and what processes they need to follow to make it valuable.
• Transitioning from an incumbent provider can be very difficult and often is a hostile situation. Buyers need to recognize that an incumbent provider often needs an incentive to fully cooperate in the transition.
• After a failed relationship, the parties in a new relationship should over-communicate to ensure that they properly set expectations. Failed relationships are often more about missed expectations than service failures.
• Especially in cases where the buyer felt nickel-and-dimed for services in the failed relationship, the provider in the new relationship needs to put in place a deal that accommodates growth or shrinking the services as the buyer's business changes.
  The parties need to establish a structure for open, non-judgmental communication. Create protocols to have regular discussions about the engagement, its staffing, progress, and other issues. By dealing with issues before they become problems, the likelihood of success rises dramatically.
• Make sure the outsourcing agreement enables the outsourcing partner to make decisions that benefit the client. Usually, this will require both the provider and client to share risks; this creates an incentive to make the right decisions.
• Make sure it is a give-and-take relationship, that it is sound at the executive level down to people in operations, and that the contractual and financial structures are also sound.
• Spend time jointly defining the detailed service levels that will drive the client's business and be an effective measurement of success. Especially when the client comes from a prior bad relationship, the parties need to ensure the service levels protect the right things. In addition, they should create SLAs that are less punitive and more productive in nature.
• The provider needs to be sure it aligns its activities to the clients' overall business drivers.
• The parties need to build multiple levels of accountability and feedback into the relationship using not only performance metrics but also executive and operational checkpoints on the health of the relationship.
• The parties need to collaborate and communicate so the buyer fully understands the value that outsourcing can bring to its business, how the provider proposes to deliver that value, and how the relationship will be managed to benefit the business.
• At the outset, the parties need to look at the long-term value proposition and focus on building a mutually beneficial relationship that will be strong enough to collaboratively work through issues that arise.
• A common thread among failed relationships is that the parties don't start off with a trusting working relationship where they understand each other, understand each other's expectations and motivations, and can engage in good dialogue.

From: IOMA

Amid the razzle-dazzle of all of the latest high-tech AP automation tools, it's easy to overlook the things you can do to improve AP operations that have absolutely nothing to do with technology. These ideas have to do with your people--your most important asset. We collected many of these ideas--they came from AP managers during conference sessions, interviews, reader surveys, informal chats, off-the-cuff remarks, and so on. The point is, each and every one has been field-tested.

We've selected 20 AP staff motivation ideas and present them here. Of course, not all of these ideas will be right for your department. But we guarantee that you can put at least one of these ideas to work right now--with great success.

1. Delegate more responsibilities to your staff members (make sure you also delegate corresponding authority).
2. Have staff take on more accountability for problems and to recommend possible solutions if something isn't working.
3. Hold regular AP staff meetings to discuss status of work, assignments given, and concerns.
4. Move GL tasks such as reconciliations from AP specialists to staff accountants to allow the specialists to focus on AP-specific issues.
5. Shift non-AP work to other departments more experienced in the function.

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From: IOMA's AccountsPayable360

How often does this happen to you? An invoice shows up in the AP department with absolutely no identification as to who ordered the goods. Occasionally, these invoices will float from desk to desk throughout the company before finding their way into AP. Sometimes, by looking at what is included on the invoice, a savvy AP associate will be able to figure out who the likely purchaser is and will then forward the invoice to that person for approval. However, that is frequently not the case, especially in the case of generic items such as printer cartridges or paper for the copy machine. Often, the dollar amount involved is small and does not appear to be worth the time and effort to research who ordered the goods.

Some companies feel the best approach is to send these unidentified invoices back to the sender, asking them to indicate who ordered the goods. If it is not feasible to simply return the invoice, pick up the phone and call the vendor. When provided with the information, request that in the future the vendor include the requestors' names on invoices. If this is a recurring problem, keep a list of vendors who routinely omit the purchasers' name along with the employees' names who regularly order from these companies. Again, ask the employees to request that their name or department be included on all invoices.

This is one of those headaches that in all likelihood will never go away completely. However, AP should do what it can to minimize the problem. By working with these suppliers, many of whom are small and will be amenable to listening to suggestions (rather than demands) and employees, AP will be able to make a dent in the problem.

WATCH OUT: For small invoices, don't simply pay them, reasoning that the dollar amount is too tiny to bother with. This can quickly get your company on the "sucker list." There are unscrupulous operators who prey on overworked AP departments, sending invoices for goods not ordered, knowing full well that small-dollar invoices are often paid without authorization. Once you pay that unidentified invoice, your company will be hit over and over again-and probably for increasingly larger amounts of money as time goes on.