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Outsourcing: Past, Present and its Future

Undeniably, outsourcing professional jobs from Western countries to other parts of the globe is by far, the biggest phenomenon that the business world has seen these last twenty years. The rapid development of the technology behind communication has helped make outsourcing expand exponentially. But what paved the way for this so-called business maneuver to take hold among many of its present practitioners? How is this business practice faring today? What will this phenomenon bring the global market in 20, 30 or even in 50 years time?

In its simplest terms, outsourcing is the delegation of jobs from an internal production to an external entity; a process that is somewhat similar to handing out jobs to different subcontractors. Although many companies are outsourcing professional tasks the different service providers within their countries boundaries, the term outsourcing in itself has now come to mean the elimination of the native staff, in favor of utilizing the services of the less expensive overseas work force. Outsourcing can also be defined as the management and execution of an entire business function by a 3rd party service provider.

Brief History

Although many studies have shown that this kind of business strategy was practiced by global companies since 1962, it was only in 1989 that outsourcing became formally identified as such (Mullin, 1996). Hiring subcontractors to do jobs with ancillary capacity may have paved the very ground work for outsourcing practices; and soon, as a safeguard for this new business strategy, companies begun establishing outsourcing support services as well.

By the middle of the 1990s, companies started looking at outsourcing as a way of becoming more cost-efficient. Business functions that were necessary in running a company, but not related to the core business were being delegated with the emerging group of service companies: from accounting, to data processing and even security companies. Other types of service providers catered to delivering assistance in human resources, internal main distribution, plant maintenance, etc.

At the turn of the century, outsourcing also paved the way for offshore outsourcing practices or simply, offshoring. Offshoring may be defined as a relocation of business processes like manufacturing and production to a lower cost location. These locations are usually situated overseas. Unlike outsourcing companies which delegates jobs to different service providers (or utilizes different companies for one or more specific tasks,) offshoring utilizes the same internal structure or internal business organization as the mother company.

Outsourcing Today

Today, outsourcing is one of the most prominently used business strategy in the world. This business phenomenon has created new jobs for many countries - and some of these job vacancies are unprecedented until outsourcing became a substantial force in the market. Only upon the onset of the new millennium are managers and engineers finally outsourced. There is now room for work force that can generate weekly activity reports, weekly update reports, all to answer the specifications of an evolving market. Auxiliary tasks like customer support, technical support and front desk services are also being outsourced.

Many companies now are subscribing to outsourcing for a variety of reasons. However, the primary cause seems to lean more on a companys desire to cut costs or at the very least, to streamline the companys expenses. Others prefer handing out auxiliary tasks or jobs with ancillary capacity so that the mother company can focus its energy on running its core business. Other small companies rely on outsourcing in their bids to access skills and technology which may be otherwise unattainable to them due to financial or time restraints.

However, outsourcing in itself is often plagued with its own set of problems. Although this business strategy is often used as a cost-saving device, there are still considerable transaction costs to contend with. There are also emerging problems when it comes to confidentiality and privacy of company matters, as well as infringement of intellectual property rights. These are but a few of the problems when it comes to hiring human resources overseas. On the other hand, there are also incessant rumblings about how outsourcing deliberately affects the unemployment rate in the western countries when jobs are shipped overseas.

A Future Market for Outsourcing

These days, market analysts are predicting that ASP or Application Service Providers will come to its own in the future. Already, there are growing numbers of ASP with companies practicing outsourcing methods. ASP can offer deployment and management of application through the Internet or some other private network on a monthly or per-user basis. Basically, it provides software as a service driven by the Internet, helping IT infrastructure markets and software program markets converge. Examples of this technology include: application monitoring, data centers, customer support from consulting firms, connectivity offers to and from hosting companies, hardware monitoring, software applications created by independent software vendors, system implementation created by system integrators, telecommunication providers, etc. ASP offers these advantages over outsourcing: ease of use, faster marketing time, IT expertise, and of course, lower fees and expenses.

About the Author

James Stinson is Owner and Founder of Global Sky Inc. He employs a team of 50 in a high quality call center facility based in the Philippines. For more info on outsourcing your project visit:

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marketing the core 3rd ed

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marketing the core 3rd ed

Mentor Broad and Disciple Deep: How to Manage Your Leadership Investments

 

Mentor Broad and Disciple Deep: How to Manage Your Leadership Investments

You only have so many hours in a day to grow your business and lead your people. How wisely are you using this time? If you are like most business leaders, you struggle with doing all that you need to – and doing them well. This article will help you ensure that you are using your leadership time in a manner that will best benefit your business and your people. It is set up in practical format that explains the differences between mentoring and discipling and the purpose of each. First we will look at definitions of mentorship and discipling. Second, we will explore their purpose and application.

Definitions of Mentoring and Discipling

In order to utilize your leadership time effectively, it is important to understand the different approaches in leading and development. Generally, there are two formats that one may use to lead and develop followers: mentoring and discipling.

Mentoring

Basically put, mentoring is ‘the act of helping another learn’[1]. The goal of the activity is to help the mentee grow in a way that is organic to him or her. The mentor is eliciting the personal outgrowth of the mentee’s nature talents and abilities. Through the act of mentoring, the mentor acts as a sounding board for the mentee. The single most important aspect of mentoring is facilitating unrestricted growth of the follower. In contrast is the act of discipling, which has a completely different approach and outcome.

Discipling

The act of discipling is the act of conforming the disciple to the ways of instruction of the leader. The word disciple is derived from the Old English noun discipul and the late Latin discipulus[2]. Discipulus simply means pupil or apprentice[3] and shares its Latin stem with the word discipline or disciplina[4], which is to instruct or convey a body of knowledge. The purpose of discipling then, is to transfer the knowledge and contents of the leader into the follower or disciple.

As we compare and contrast the acts of mentoring and discipling we can see that there are minor similarities. With both there is a relationship established, with the leader assisting the follower in growth. The divergence lies in the purpose and outcome. In the case of mentoring, the mentor assists the follower in developing his or her natural talents and abilities and acts as a resource. Discipling on the other hand, is used to preserve and transfer accumulated knowledge to a sequential generation of follower. With the differences of both approaches, it is clear that a purposeful and strategic application must be pursued for the best results.

Purposeful Application

In considering the divergent purposes of each leadership approach we must consider what purpose we hope to achieve through our leadership. This next section will explore the purposeful application of each and how leading in the various formats can impact your organization.

Discipling for Preservation

In the book Built to Last, Jim Collins and Jerry Porras explore the habits and concepts that make organizations successful. One of the main concepts in their book is ‘preserve the core’ and ‘stimulate progress’[5]. The counterbalanced elements represent the importance of maintaining what made your organization successful and changing enough to stay successful in the future. In leadership terms, the concept of discipling is equivalent to ‘preserving the core’.

As an organizational leader you have formed a foundation that has made your organization successful. The hard work that you have put into finding a ‘formula for success’ should be preserved and carried on. This is where discipling comes into play. In developing this effort as a leader, one must be a model for others to follow. In the book The Leadership Challenge, this concept is called ‘Listen to the Masters’[6]. In the book, the authors cite that every one of the leaders they interviewed was influenced in a major way by one of more key ‘masters’[7]. They conformed who they were to model and reflect the leader whom they admired and had an affinity.

One of the greatest examples of a leader who created a discipling organization is Billy Graham. As a leader, he created an organization and a team that has ‘perpetuity’[8]. This longevity and replicable nature of his followers is not an accident. It is a distinct and fruitful byproduct of discipling. One of his first followers, Cliff Barrows said, that the Lord told him, “Do the music for Billy and whatever has to be done…”[9]. Cliff was moved to subordinate his own needs in this case and follow in a manner of discipleship.

As you consider discipling within your organization, think about who readily resembles the ‘core’ of your organization. Who are the future leaders that will carry on the traditions, culture, and practices that have brought your organization to this point? Now consider the other group – your thought leaders and progressives.

Mentoring for Progress

No matter how good an operation is or its market dominance, the pressure to generate progress is omnipresent. An organization’s ability to maintain its core while growing the outer fringes of future markets is critical to its future. Consider the dominance and decline of Microsoft as an example. The firm once held an unprecedented and seemingly insurmountable monopoly on end user computing. However, their over reliance on the ‘core’ blinded them to the market threats brought to bear by the internet. As a result, the Microsoft stock dove from an all time high of $57.63 in 1999 to its present state at $25.86[10]. Furthermore, the firm is struggling to buy its way into the market it missed through tendered acquisitions of Yahoo!. With the Microsoft’s leadership failing to generate progress, it lost considerable opportunity to beat Google to the internet market space (see Table 1).

Table 1[11]

As you consider your organization’s future, who do you see as the ‘thought leaders’ or ‘visionaries’? These are the individuals who should be targeted for mentorship. They possess qualities and thoughts that will help invite change within your organization. Consider the example of Bill Hybels, who is arguably one of the greatest organizational development practitioners. The church he founded, Willow Creak Association, includes an astounding 12,000 member churches[12]. As senior pastor for the association, he dedicates ten full days a year mentoring[13]. During this mentorship he keeps the format lose for exploration and acts as resource to his follower[14]. While his time investment may seem rather low, the use is strategic to developing the individual attributes of certain followers.

What Now?

As you consider your organization and your followers, set a vision for the future. Where do you want your organization to be in one year, five years, or ten? Identify your followers that will best preserve the ‘core’ of those ideas and the foundation of your organization. These are your organizational ‘anchors’ and your candidates for discipleship. Next, look for the ‘thought leaders’; those followers that generate new ideas and challenge the status quo. They are your ‘visionaries’ and the people that will move your organization where it needs to be for growth.

Since discipling is rather time intensive, consider employing ‘Pareto’s Principal’. Pareto advocated that nearly everything in the world can be split into a 20/80 format. For example, 20% of sales people in a sales force create 80% of the results. Since our main goal is to preserve a successful core, select 20% of your followers for discipleship and spend 80% of your development time discipling. Likewise, spend the other 20% of your development time mentoring the mentoring group. This will allow them to develop independently, yet with assistance when needed. As a word of caution, you must be sure to properly set the expectations of everyone involved. Not doing so may lead to hurt feelings and indictments of ‘favoritism’ from the mentoring group. Likewise, an improper fit into the discipling group may be viewed as ‘oppressive’ to others. Know your people and where they fit. Remember, the key is to mentor broad and disciple deep!

 

[1] Bell, C. (2002). Managers as Mentors: Building Partnerships for Learning, 2nd Ed. San Francisco: Berrett-Koehler Publishers, Inc.

 

[2] www.merriam-webster.com

 

[3] University of Notre Dame Latin Dictionary and Grammar Aid. http://archives.nd.edu/latgramm.htm

 

[4] University of Notre Dame Latin Dictionary and Grammar Aid. http://archives.nd.edu/latgramm.htm

 

[5] Collins, J. and Porras, J. (2002). Built to Last: Successful Habits of Visionary Companies. New York:HarperCollins

 

[6] Kouzes, J. and Posner, B. (2002). The Leadership Challenge, 3rd Ed. San Francisco, CA: Jossey-Bass.

 

[7] Kouzes, J. and Posner, B. (2002). The Leadership Challenge, 3rd Ed. San Francisco, CA: Jossey-Bass.

 

[8] Myra, H. and Shelley, M. (2005). The Leadership Secrets of Billy Graham. Grand Rapids, MI: Zondervan.

 

[9] Myra, H. and Shelley, M. (2005). The Leadership Secrets of Billy Graham. Grand Rapids, MI: Zondervan.

 

[10] http://finance.google.com, retrieved July 20, 2008.

 

[11] Adapted from data retrieved from http://finance.google.com. Retrieved July 20, 2008.

 

[12]Willow Creek Association, http://www.willowcreek.com/AboutUs/, retrieved July 21, 2008.

 

[13] Hybels, B. (2002). Courageous Leadership. Grand Rapids, MI: Zondervan.

 

[14] Hybels, B. (2002). Courageous Leadership. Grand Rapids, MI: Zondervan.

 

About the Author

D. Shawn Hussey is a doctoral student at Regent University’s School of Global Leadership & Entrepreneurship. He is the president and principal consultant for Valley Management Consulting, LLC in Salem, OR. His research interests include strategic leadership, generational leadership, and organizational sustainability and development. He may be contacted at www.valleymanagementconsulting.com.
E-mail: shawn.hussey@valleymanagementconsulting.com