Companies increasingly use outside specialists to do their work. Driven by the ever-lower costs of global communication and online collaboration tools, Henry Ford’s vertically integrated organization is yielding to Procter & Gamble’s network of external innovators. Almost anything can be outsourced to specialists and reconnected.
While companies have outsourced low-value work such as payroll processing and call centers for decades, today they farm out critical activities. Apple gets mobile apps from independent software developers. Forbes.com uses external bloggers (not just internal staff) to write articles. And Indian mobile phone provider Bharti Airtel uses IBM to manage its computer systems and Ericsson to operate its cell tower infrastructure.
Consider how the largest consumer packaged goods firms are outsourcing an activity that has become vital to the top and bottom line: making sense of huge volumes of customer data. You might think these companies should crunch and analyze this data themselves. Don’t they live and die on quickly identifying key changes in shopper behavior and attitudes? That’s essential to tweaking products and marketing campaigns — or overhauling them when necessary. Yet Carrie Shea, president of AMG Strategic Advisors, the growth strategy consulting unit of Acosta Sales & Marketing, told me, “Most are leveraging outside partners rather than doing this all themselves to (1) make sense of the overwhelming volume of data that they have to analyze, (2) get a strategic view across channels and categories, and (3) be efficient in complex advanced modeling.”
TW Garner, which makes Texas Pete Hot Sauce and Green Mountain Gringo Salsas, has hired AMG Strategic Advisors for consumer, shopper, and category insights and analytics services. Steve DeCorte, TW Garner’s general manager of sales, told me that “as a small company, using AMG Strategic Advisors puts us on a level playing field with the largest consumer packaged goods companies when we call on retail customers.”
While companies are making greater use of outside specialists to improve performance, they face two trade-offs. The first is greater costs; outside specialists can be expensive. The second is increased risk of coordination and integration, such as managing service level agreements and handoffs.
How can you organize a fragmented team of internal and external people to improve the customer experience, rather than optimize each party’s objectives?
Create a shared purpose and an end-to-end process map
Whether in sports or business, a team is a group of people with a shared goal. A fragmented process team needs a single, clear objective to focus and coordinate their activities. For example, as I described in a previous post, all of the doctors, nurses, therapists and other health care providers involved in delivering a hip or knee replacement need to believe they are primarily focused on delivering an excellent patient experience, and that any one of them can jeopardize the reputation of all of them.
But a shared purpose isn’t enough. To succeed in a process that crosses the boundaries of several organizations, workers must see it from end to end. Only by understanding the entire flow and logic can they see opportunities for improvement. And only by collaborating with other process workers can they implement the changes. The best way to get the team in synch is to assemble the key stakeholders of a process in a multi-day workshop to map the current and future process, identify areas of improvement, and define an implementation plan. After the workshop, everyone will have a common vision of what they are trying to jointly achieve. They will also understand how the various work steps affect the process or behavior of others across departments, customers, suppliers, or other stakeholders, and how they can jointly improve the process for the customer.
Liberally share information on process performance
Many retailers’ supply chains stretch overseas and involve many steps and players. Orders go from the retailer to overseas vendors that manufacture products. After they’re made, the products are trucked from the factories to a container freight station where they are consolidated, then shipped by sea to a domestic port distribution center, transferred to rail or trucks for domestic distribution, and finally to stores. As Charlie Kantz, Vice President Supply Chain with Lighthouse Consulting, told me, many companies lack visibility into, and control over, their products as they move through the pipeline. Yet a number of easy-to-use software apps can provide managers with visibility and control of inventory from the order to a store shelf. The technology (browser-based apps and “cloud” infrastructure) for these apps didn’t exist five years ago, according to Steve Christensen, CEO of Babbleware. The apps sit on top of the underlying legacy systems, providing a communications layer for vendors, logistics providers, and the retailer’s employees at each step. The retailer now sees inventory accumulating in real time without the administrative overhead of phone calls, e-mails and faxes. By having more data on the process, they have much more control of the process.
Create an online community for your process team
Social networking systems offer a new way to support process teams across organizational boundaries. In a previous post, I described how MITRE, which manages five research and development centers for the U.S. government, has deployed a collaboration system (“Handshake”) to build teamwork between its 7,600 employees and an external network of academics, former employees, vendors, industry, sponsors and front-line beneficiaries of its research (such as IRS workers, soldiers, and health care professionals). For example, a new mobile application MITRE developed was distributed to front-line soldiers, who then gave rapid feedback on the product through Handshake.
Question: How have you used a team of outside specialists to deliver a better customer experience?
This article was first posted on Harvard Business Review.