« Did Slumdog wipe the Satyam slate clean? | Main | Source like an Egyptian »

Feb 25, 2009


Feed You can follow this conversation by subscribing to the comment feed for this post.

I agree...I worked around SAP deployments for 5 years and could not make the implementation consultants understand the importance of process improvement. Their job was to deploy SAP and leverage SAP Best Practices, not to think strategically about solving the client's business issues.

As a result, I now see many opportunities for niche consultants to help mid-market companies with both process improvement and outsourcing. The consulting world has changed. Clients want experienced consultants who can think and act both strategically and tactically. These consultants are rare indeed!

Rosemary Coates
Blue Silk Consulting

Thank you for the note. Let me start with the last question on the viability of FAO for mid-market. Yes, it is very viable but I prefer to talk about outsourcing activities as opposed to FAO. The term FAO has many different meanings to many different people. For example, I infer from the first question that FAO automatically means “offshore” by the use of the term “arbitrage”. With some outsourcing activities offshore alone may be a small or insignificant element in the value equation or total cost of ownership (TCO).

CFOs are telling me they are exploring a range of options to achieve the simultaneous goals of (a) increasing efficiencies in their operations and (b) improving financial performance, i.e., working capital management. The options within the range are not always mutually exclusive. Optimization, reengineering, outsourcing and outsourcing with offshoring and analytical services are all being considered.

Sometimes the entry point for the exploration is different than the traditional RFP or Sourcing Advisor journey. For example, the Treasurer of one Midwest manufacturer recommended outsourcing payables to a bank’s outsourcing arm which had special technology and expertise as part of a broader cash management reengineering project. The manufacturer quickly discovered the improvement in working capital far exceeded the benefit from tactically outsourcing payables offshore.

Hopefully this is helpful.


Excellent piece. The challenge for the outsourcing service providers is to help mid-market firms transform their processes as part of an outsourcing transition. How can they do that and save them money with the follow-on arbitrage? Or do you think FAO is simply not a cost-viable option for many mid-market firms today?

Dave Rodgers

The comments to this entry are closed.

Your email address:

Powered by FeedBlitz

Follow me on Twitter

    follow me on Twitter


    My Photo