"Organising anarchists" - corporate or virtual, the future of the organisation
"Since the 1890's the globalisation of world trade has helped bring about the creation of corporations which have become bigger and more powerful than many states. But, is it possible that the size, cost and inflexibility inherent in these structures has reached a point where SSVO's (small, smart and virtual) organisations - like Global Back Office -might now have their own opportunities in the global market which have been increasingly closed to them for much of the last a hundred years?
Michal Taylor has helped make a reality of the Global Back Office concept. Michal is just back from a lengthy trip to India where GBOPS has established the first of the facilities which it is planned in a "follow the sun" pattern to offer a 24/7 service with full built in redundancy. The café set out to discuss with him the likely future development of this latest development in outsourcing.
First we asked him if he regretted opening a facility in India just in time for the prospect of a nuclear conflict?
"Not all, if you think about it, Europe has dealt with the Red Brigade, the IRA, Action Direct, ETA, has lived with 40,000 missiles targeted at its cities and infrastructure and with 000's of tanks ready pour through the Foulda gap at any time. Did business say we cannot operate in Europe? No, of course not; they did the sums, calculated the risks and got on with it. Of course I would prefer that the security situation in the region had not developed as it has but it is clear the world is doing everything it can to help the potential combatants resolve their differences. Moreover, having observed the situation at close quarters and considering that the two parties have gone to war in the past over the same issues, I think we can reasonably assume that the presence of nuclear weapons has made war less, not more, likely.
That said, we have to deal with perceptions and they can be much more difficult to deal with than actualities, especially in the minds of potential customers. The fact is that we have always planned, as you reported, to give GBO a "follow the sun" capability. Consequently, the India - Pakistan situation just reminds of that which we already knew. Meanwhile, the reality is that any conflict which would impact on our operations is a long way down the list of possible consequences or interactivity".
So, turning to the longer terms issues how do you see outsourcing developing?
"Define outsourcing is, I suppose, my response to that. The origins of GBOPS lay in our setting out to resolve the traditional issues in recruitment of needing a large back office function which, in turn, put the agency on a treadmill, a kind of "catch 22". By the time you had the support capabilities you needed to run the business at one level your costs and the dilution of management time became such a burden that you had to revise your forecasts and increase your revenue. Then when the market shifted you were inevitably exposed.
By web enabling and then shifting our entire back office function we not only relocated the support service and, in the process achieved all of the cost and quality objectives we had thought possible, we also made possible a new and vastly improved way of working for our consultants whose numbers we could increase exponentially if we so wanted. In short, our approach had clearly transformed every aspect of our business - from the ways it is supported, through the way our consultants work to our customer interface.
As the news spread we realised that the approach that had worked so well for Euronet could work equally well for others. During this last trip it began to dawn on us just how powerful this approach could be and in how many areas it could apply - in fact it became a little overwhelming the more people we spoke to about it.
From about 1890 we have seen the effects on industry and commerce of globalisation. The first wave inevitably resulted in corporations challenging states and certainly transcending national and regional boundaries. Now we at the very beginning of the second phase of that process. Technology has made it possible for associations, partnerships and joint ventures to align themselves and either compete with the giant corporate organisations or to take from them tasks which are outside their natural bailiwicks or, as they say in Northamptonshire, to stay at their respective corporate "last's".
Thus Ford might ask themselves - if Nike can be successful by doing their own designing, contracting manufacture and then specialising in marketing, then might it be better and possible for us that we contract out the manufacture of our cars, reserving for ourselves only those things we must do in order to remain Ford? From there it is but a short step to ask also - if it takes three years to get from concept to design, what would be the effect of taking that process out of a corporate structure and, by means of a tightly worded contract and good management, get it done by a small operation having the right talent and few inhibitions?
How does that virtual approach fit in with the "knowledge city" concepts one reads about - the billion $ structures in the Gulf and other parts of India which are reported daily?
"Well, to me creating a large physical entity with fixed walls and boundaries is to miss both the point and the opportunity - a bit like creating an office for anarchists to work in rather than giving them a coherent structure in which to work together. I do not see the future of outsourcing as requiring large physical premises in a few locations, for me outsourcing will be built around using technology and innovative thinking and processes to create "virtual" organisations and partnerships. Why, when you have web enabled a task and, in so doing, allowed it to be undertaken from virtually anywhere where the person who is to do the work happens to be at the time, do you then want to insist that the work is done in a traditional office environment with all the incumbent traditional structures and requirements? Of course, these things cannot be truly virtual; they must have sufficient content and form as to be both credible and to offer customers absolute assurance of security, quality and delivery. Putting it bluntly - something tangible and with nett worth to sue if it all goes pear shaped?
The idea being that the best way to tackle a particular need for a particular corporation may well require the combined skills and experience of several small companies brought together in a virtual partnership where professional indemnity insurance and quality management are the deciding factors in the award of the contract. That, in part, is the role of GBOPS and where we see a significant part of our future. Apart from the many one off tasks which we are equipped to take on in our own right - data, software, applications and projects - we are set up also to promote and facilitate the essential partnerships and collaborations between SSVO's which large corporations (and regions and communities) now clearly need in order to stay effective and competitive and to preserve shareholders value.
The need is there and at the right level these giant organisations will take the right decisions - they always have, the question is "will the SSVO's have the wit and the will to collaborate with others like them and in so doing take advantage of the unlimited opportunities now opening up for the quick, the brave and those with vision".