Feature Article
Best practices in Outsourced Vendor Management
Does your company use external service providers, i.e. Vendors, to provide products and services on your behalf? Are you contracting with others to provide skill augmentation, product development, product supply, technology development, marketing or sales support? If you answered yes to any of these questions, do you feel your company has a Vendor management program that ensures appropriate return on investment and risk mitigation from using contracted service providers?
Vendor Management practices in companies are either centralized or decentralized. The best approach is dependent upon the investment level of contracted services, the strategic importance of those services, and risk level of any disruption in those services. Best practices include the deployment of a centralized Vendor Management Office (VMO) in situations where strategic importance is high, company risk is moderate to high and investment dollars are moderate to high.
Advantages of deploying a centralized VMO include increased control of the Vendor relationship, improved visibility and understanding into the overall company purchases and spend, and improved consistency of inter-company messaging at the aggregate level. Disadvantages may include a perception of loss of control, delayed responsiveness, and inflexibility at the local level. The opportunity when establishing a VMO is to design a practice that includes an appropriate balance of control and flexibility. The key is to ensure only those areas critical for risk management are orchestrated at the centralized management point. Overburdening the centralized structure will create a process leading to inflexibility and reduced agility.
If you’re interested in pursuing this topic, in greater detail, I invite you to review the recent study by Deloitte Consulting by following the link listed at the end of this document. The ASIL Supply Chain team is experienced in designing effective Vendor and Program Management Offices. ASIL consultants are Service and Supply Chain professionals with over 100 years’ experience in Domestic and International Service and Supply Chains. We know what it takes to create success now and into the future. We have a proven track record of pragmatic and creative solutions and welcome the opportunity to help navigate your journey to successful outcomes. Call us today and let us help you achieve new areas of insight, ingenuity and intimacy in this ever changing economic climate.
References:Deloitte - VPMO
Contributed by Warren White
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Spotlight
The "Silent Killer" of Change
When we think of the "Silent Killer" a variety of images may come to mind. For some they are images of a medical nature, and others perhaps changes in our environment. Today, my focus is on a different silent killer. It is a growing business challenge that continues to gain momentum each day in the business world.
This silent killer is the manager that routinely kills new ideas. They are the stoppers of innovation and the limiters of potential. Their impact is typically the same (killing an idea), although the approach employed can vary widely. It could be through their lack of involvement and support that an idea is never realized. Perhaps it is because the environment is not conducive, or even simply because they are uncomfortable with change.
True or false? All environments are equipped to encourage and handle new ideas. Answer: False. Perspective can dictate whether a new idea has merit. The broader your perspective the more likely you will consider new ideas. In cases where management is restrictive or inflexible, new ideas can be like swimming upstream and very difficult to get accepted.
So as a Manager what can you do about it? If you want to stimulate new ideas and approaches for achieving greater results, build an environment that invites participation and supports taking a risk. As a manager seek out different thinking to gain a broader perspective, look to understand diverse approaches and solutions. There are usually many ways to solve today's business challenges.
By challenging people to solve, you will also expose them to failure. How you respond to failure will determine how the people will step up to solve. Use the lessons learned to become stronger and wiser vs. being punitive and restrictive. The outcome will be a stronger organization that is able to address challenges in a thoughtful way with an increased probability for success.
Contributed by: Pete Pazmany
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Industry Trends
Training Strategies
Formal or Informal?
Training your employees is critical to developing them into contributing members of the workplace. Through training, employees learn new skills, procedures, and gain experience in different arenas of the workplace. Training methods fall into two categories, formal and informal. Consider your own experience; did you learn more about your job from formal training or informal interactions with other employees?
Formal training can be seen as going on retreats, meetings on new company policies, or engaging in skills training classes. According to David Georgeson, it has been estimated that a $100B is spent on formalized training and yet only 10% of this knowledge is used when an employee is on the job. In terms of a return on investment, that is absolutely dismal and a waste of time and resources.
Franklin Becker has proposed that informal training is primarily where employees learn most of the skills for their positions as well as the culture of the company. He specifies five areas that create informal training opportunities; eco-diversity, spatial transparency, functional inconvenience, human scales, and neutral zones.
Eco-diversity asserts the more varied the setting for work, the more learning that occurs. For instance, those on the road for their work engage in informal training and have a much higher learning curve because they must adapt to their new settings with great speed to be able to meet their job requirements.
Spatial transparency focuses on the notion that the more employees are able to see each other, the greater the amount of informal learning that occurs. By increasing the visibility people have with one another, they naturally have a higher inclination to learn from one another.
Functional inconvenience aims at creating unassigned space for employees to interact with one another. Essentially, it is about employees encountering one another in common space, where they can dialogue and as a byproduct engage in informal training.
Human scale looks at how distances between where people work affect their informal learning. The smaller an area that multiple teams or departments can work in creates a proximity that encourages informal interactions, as opposed to huge warehouse like spaces where everyone is separated into their own offices and have little incentive to leave.
Neutral zones examine the ivory tower syndrome. By separating the executives of the organization from the employees a powerful informal interaction is missed. Creating spaces where authority is neutralized makes it possible for information and insight to circulate without restriction or concern of status.
Informal training has various positive aspects and for the most part govern how employees learn their jobs and understand their environments. When considering developing your company’s human capital understanding that you need informal strategies can help increase your effectiveness and efficiency in creating valuable employee education. If you are interested in designing new training initiatives, consider the team at ASIL who are committed to your continued success.
Reference: Becker, Franklin. 2007. Organizational ecology and knowledge networks
Contributed by Joe Pazmany
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Our Software Products
Click on the links below to view ASIL, Inc.'s MAX Partnering® self-paced software demonstrations:
Strategies and Execution - This demo depicts the tools that organizations can utilize to embrace change effectively and implement it successfully.
Self Assessment Sample Questionnaire - This demo will enable you to respond to a small sample of self assessment questions focused on change management and create a Heat Map of your responses to see areas that may need attention. The Driving Complex Change® methodology addresses the six areas of Direction, Ability, Incentive, Resources, Structure, and Action that can impact your effectiveness of change management.
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