Jamie Liddell's blog

The Law of Diminishing Returns

Of the many laws that affect the international outsourcing space, one of the most important must be that of diminishing returns. At its heart outsourcing is about efficiency – a provider can only offer a decent value proposition, and turn a profit, if it can achieve a desired output more efficiently than can a would-be buyer of its services – and yet there’s only so much money in the hypothetical pot to invest in driving efficiencies: as a very basic example, if one can spend $x to achieve 10% savings, by the fifth investment of $x the savings made are only around 60% of what was achieved with the first tranche. The returns diminish. After a while, it becomes less and less worthwhile to invest $x in that project, when the same amount put into another deal can yield significantly more.

Finding the right balance between investment and returns (and knowing where is the line beyond which further investment will yield returns too paltry to justify) is vital in any business, but especially one as efficiency-based as outsourcing, where relationships have historically often featured buyers demanding constant and consistent efficiency gains and savings – and, moreover, where the necessary investments in technology and people can be gigantic. Hence the desire on the part of providers to share the value gained by any given investment across as many clients as possible – and the complications resulting from buy-side demands for bespoke work and customisation without a simultaneous understanding of why this of necessity means higher costs, which need to be passed on somewhere, somehow…

Jamie Liddell, Editor, Outsource

Is this a Digital Revolution...or Evolution?

The word “revolution” gets thrown about a fair bit at present (not least by me…) when discussing the new wave of automation technologies which are transforming the way organizations do business. But are we talking about “revolution” or “evolution” – sudden and dramatic, or gradual change? Well, it’s a bit of both: the technology itself is evolving. We can trace, for example, the evolution of IBM Watson back to the Deep Blue chess computer which beat Gary Kasparov back in the mid ‘90s...which can in turn be seen to have evolved from its predecessor Deep Thought...which itself was a successor to ChipTest (developed in the 1980s at Carnegie Mellon University)...and so on, back to Turing and beyond. While there have been revolutionary moments along this path – the transistor, the integrated circuit etc. – it’s clear that this is an evolutionary sequence, at a pace which may seem very far from “gradual” to those who’ve been alive to observe it but which, nevertheless, consists of successive advances built upon what’s gone before.

Jamie Liddell, Editor, Outsource

Automation and the Human Touch

At dinner recently, a guest held us all entranced as he described his current work: a post-doc at a prestigious London university, he has been working for nearly two decades in artificial intelligence (AI), specializing in trying to teach computers how to teach other computers. While much of his work is simply too esoteric to explain here (that's my code for "it went right over my head"), what was very obvious to me was the extent to which things have advanced since we first met - as he was just setting out upon his journey in this field - and how rapidly theoretical advances are becoming practical innovations which then, in turn, move out into the mainstream. Problems he and his peers were wrangling with only a few years ago now seem like ancient history, he said, and while "the future is always infinitely far away, tomorrow seems closer than ever." 

If any of us at the table had had any doubts before that we're on the verge of tremendous social change as a result of automation and smart technology - and I don't believe anyone did have such doubts (as one would have to have had one's head thoroughly buried in the sand not to be aware of the whirlwind approaching us), they would have been thoroughly dispelled by the end of our companion's passionate and impressive address. But, of course, how to react to the automation revolution is immeasurably more difficult than simply to assert that it's coming...

Jamie Liddell, Editor, Outsource

Digital Age Sourcing

Last week I had the honor of giving the closing session at SIG’s latest event on my side of the Atlantic: the SIGnature event in London, hosted by Mayer Brown. At that event, Peter Dickinson, global co-lead of Mayer Brown’s Business & Technology Transactions practice (and a great friend of SIG) gave a fantastic presentation in the morning on “Reimagining Sourcing for the Digital Age” where he looking at emerging technologies and services, the benefits and challenges that they provide, and why a new approach to sourcing is required when it comes to operating in this brave new world.

Sourcing and outsourcing lawyers benefit from a very useful – if hard-earned - combination of perspectives, in that they are as deeply immersed as anyone in the minutiae of specific deals while at the same time needing to maintain as broad an understanding as possible of the macro-level trends and developments driving the evolution of the space: it’s impossible to serve a client adequately, let alone superlatively, without knowing what’s happening far beyond the confines of one deal and/or partnership. Peter demonstrated to our London attendees just how potent that mix of perspectives can prove with a fascinating “state of the nation” address examining how the key emergent technologies are driving change in the outsourcing landscape, in how providers are serving their clients (and who’s doing both buying and selling), and in how corporate strategies and behavior are being transformed by an extraordinary complexity of overlapping factors – all illustrated on a micro level by well-chosen examples pulled from the extensive experience of Peter and his team at Mayer Brown.

Jamie Liddell, Editor, Outsource

The Global Impact of Watershed Moments

With so much attention currently focused on the political arena (most obviously, of course, in the USA with the inauguration of President Trump) it’s easy to become carried away in one’s assessments of the extent to which “politics” drives actual change. Of course, there’s no doubting the scale of the significance of the Trump election, or the Brexit vote, or similar “watershed moments” – but the nature of that significance is somewhat less clear, especially when it comes to the impacts on specific aspects of our lives. It’s somewhat comforting (or perhaps not, depending on one’s affiliation) to think that the person nominally in charge of a country is indeed that – it plays to our natural human desire for order, comprehensibility, justice – but in a world as interconnected and complex as this one, is it not a serious error to overstate the ability of a President Trump, a Prime Minister May and others in similar positions around the world truly to steer a course, rather than simply to keep their ships of state upright in the storm?

Look at the sourcing and outsourcing space specifically. In a number of particular areas President Trump could well have a huge impact: a crackdown on immigration and the offshoring of work, changes to NAFTA, the reversal of the ACA and other policies would affect very substantially certain tranches of the space and those working within them. Likewise, in the UK the way Theresa May is approaching the exit from the EU and the Single Market has deep significance for businesses working in and with the United Kingdom for data protection, for accounting and a host of other areas.

Jamie Liddell, Editor, Outsource

Best Practices from SIG University Part III: Key Takeaways

In our final installment in the discussion on the importance of education and the value of options like SIG University, Jamie Liddell shares key takeaways from students who hailed from Honda North America, PNM Resources and Florida Blue.

Students Become Teachers
An "enthusiasm for feedback" was highlighted by Esteban Valenzuela, a project manager with Honda North America Indirect Procurement, as a critical aspect of SIG University. According to Esteban, the suggestions made by the students as they went through the course as to how it might be improved were assessed, and solutions implemented in real time by the SIG U staff (in Esteban's words, "Throughout the course I have made many recommendations and the SIG staff have already made many changes.")

Having come to the end of the course and with the ability to look back holistically on the experience, we asked our students what other suggestions they could make to keep SIG University firmly on the continuous improvement pathway. Without revealing too much, the depth and variety of the feedback (from the structural - with Tammy Way, a Sourcing Consultant for Generation at PNM Resources, who suggested we launch two new certifications; to the tactical - with Esteban’s advice to develop workbooks, videos and enhanced interactivity) was heartwarming evidence of the degree to which the students had embraced the course and wished to contribute their own efforts to SIG University's success: exactly the kind of philosophy which SIG U and the broader SIG family seek to develop within the sourcing profession as a whole.

Jamie Liddell, Editor, Outsource and Co-Head of EMEA, SIG

Best Practices from SIG University Part II: The Real Deal

In our second installment in the discussion on the value of education and more specifically a SIG U education, we discuss preconceived ideas and expectations. After the first class of students completed the training, SIG and Outsource’s Jamie Liddell interviewed students from Honda North America, PNM Resources and Florida Blue for candid opinions.

Preconceptions and Prejudices
Any prospective student contemplating a particular course will have preconceived ideas – however inaccurate – of that course and the institution providing it. In the case of this first cohort of students, of course, there was no existing commentary available to them from previous graduates of this specific course which could colour their expectations; nevertheless, the students could build a certain perspective on the reputation enjoyed by SIG itself – and for Tammy Way, a Sourcing Consultant for Generation at PNM Resources, this in particular gave rise to high expectations indeed: “Given SIG’s buy-side focus and collaborative knowledge sharing approach to just about everything, I fully expected the program to involve trainers from very diverse buying experiences who encouraged others to engage in discussions, share experiences and knowledge, and freely exchange tools and templates aimed at making the work a little lighter for all of us.” Thankfully, she added, “The course did not disappoint.”

Jamie Liddell, Editor, Outsource and Co-Head of EMEA, SIG

Best Practices from SIG University Part I: Why SIG U?

“Education,” wrote John Dewey, “is not preparation for life; education is life itself.” That’s a philosophy that SIG has from its inception held very close to its heart: the idea that throughout our lives and our careers we should continue to learn and develop, not simply for the benefits that learning brings us – and our community – professionally but also because education is a good in itself. Hence the strong focus at SIG’s Summits, Symposiums and Roundtables, in our webinars and our Student Talent Outreach program – truly, in everything we do – on growing our members’ knowledge and understanding of the practice of sourcing and the environment within which we work.

Jamie Liddell, Editor, Outsource and Co-Head of EMEA, SIG

Sourcing Thought Leaders...Enter the SIG U Writing Competition

As the editor of Outsource (a member of the SIG family, of course, since January this year) it’s my great privilege to publish articles by some of the best-known figures in the space: authors whose very names have become synonymous with cutting-edge thought leadership and the kind of insight which itself drives change within this dynamic, fascinating industry. However, it’s also always crucial for me to remember that great insight and high-quality communication are not the sole preserve of the established sourcing superstar; that right now, out there scattered across the wide, wild world are a host of undiscovered B2B literary marvels – as-yet-unsung thought leaders whose talents lie like diamonds, buried but waiting only for the miner’s pick to swing in the right direction.

Well, it’s time for Outsource to go mining…we’re launching a writing competition aimed at discovering those diamonds and bringing them out into the light – and, what’s more, thanks to our excellent colleagues at SIG University we’ve got the perfect prize with which to tempt the next generation of outsourcing authors to sharpen their quills: a place in the next semester of the Certified Sourcing Professional course! (And if the winner doesn’t meet SIG U’s entry criteria he or she can transfer the prize to a colleague who does; how’s that for a way to grab the attention of the top brass?)

Jamie Liddell, Editor, Outsource and Co-Head of EMEA, SIG