Internalise the mindsets for outsourcing success

Internalise the mindsets for outsourcing success.

The strategic decision be-

hind responding “No” to a single vendor, $450million opportunity.

By Philip Squire, CEO Consalia Ltd. In the current global economic climate we are observing a plethora of technological, fiscal and competitive trends. These constantly reshape the global environment in which the outsourcing industry operates. Outsourcers are under increasing pressures from new entrants to the market, cloud based solutions, virtualisation and offshore – onshore battles for improved returns or greater service.

Successful bids are no longer the prerogative of major transnational corporations. The days of multi-year, single supplier mega-deals has been threatened by smaller, multi-supplier deals. Much of this is due to the advent of cloud computing, driving down prices and opening up competition.

Organisations have had to become increasingly strategic about the outsourcing deals pursued. The following case study examines the role of Consalia Ltd in advising the Hewlett Packard team through a bid process, to potentially work with one of the World’s largest mining and natural resources corporation, Anglo-American.

Case Study: HP & Anglo American Given that conversion ratios on deals with new customers are typically very low (around 20%), bid teams with any sense of self preservation would never pursue an RFP for a new client where there was no assigned account manager and little information surrounding the contract. However when Anglo American approached Hewlett Packard, the potential of a seven- year contract worth hundreds of millions of dollars, meant that sizeable outsourcing opportunities (for both the Anglo data centres and Voice Networks) had to be recognised.

The incentives were sufficiently interesting for Hewlett Packard to convene a Winning Value Proposition intervention workshop (WVP) with the Sales Performance Improvement Company, Consalia Ltd. The workshop, led by Dr Philip Squire, CEO of Consalia Ltd, aimed to create a mindset in the bid team that would guide their approach to the deal. The four key mindsets emphasised were Tactful AudacityTM, Client Centricity, Proactive CreativityTM and Authenticity.

Although Anglo was clearly interested in HP as a vendor, given its global status, Dr Squire advised HP to decline the opportunity in a tactfully audacious way. HP cited that whilst they felt they had a great solution they simply did not have the relationship required to calibrate the solution. This was a bold statement, which could have resulted in a negative image for HP, however the response was quite a cal-

culated one. Consalia felt that this response would generate one of two actions. Either Anglo would accept that HP were out of the race, in which case HP would have mitigated investment in a high-risk RFP; or Anglo would invite HP to get to know them better, allowing them to establish the relationship required. This is exactly what happened.

The training offered by Consalia Ltd placed great emphasis on a deep understanding of the customer. The values of Tactful AudacityTM and Client Centricity led HP to push for a meeting with all of Anglo’s international CIOs and business units to clearly establish a united understanding of the issues and challenges faced by the organisation. To gain greater client insight HP also requested site visits to some of the mines in Africa and South America. With the mines covering vast tracts of land and often separated by great distances, Hewlett Packard realised they were able to suggest more effective service level agreements and as such, advise Anglo American to revisit the due diligence model proposed for the outsourcing solution.

Following the visit to the mines, the HP team practiced Proactive CreativityTM , a method of lateral thinking taught during the WVP workshop. During their visit to the mine, they had learned that one of the major issues was in tracking assets – both human and equipment. At the time Hewlett Packard had been working on some interesting Radio Frequency Identification Technology (RFID), which could resolve the problem. They therefore invited some of the Anglo team down to Bristol to visit the laboratory. This really helped Anglo to see the potential of the new and emerging technologies.

Throughout the deal process, HP had displayed a genuine desire and Authenticity in getting it right for the client. Consalia Ltd were instrumental in preparing the HP bid

team by creating the right mindset and embedding those values in the Value Proposition and Commercial Strategy.

Once everything had transpired, HP had strongly positioned itself to win the contract away from the incumbent, T-Systems. Their outcome was an outright success, a $450 million, seven-year deal that was closed within eight months.

Other WVP Successes with HP Between 2006 and 2008, Consalia conducted a two year joint research project with HP on a global scale. The WVP intenventions were tracked over dozens of $50 million + outsourcing deals.

The project acted as a huge validation of WVP as a tool. After the two years were up, those bid teams that used the WVP methodology closed out 67% more deals, a rate 2.5 times higher than before.

Find out more at www.consalia.com or contact: psquire@consalia.com Dr Philip Squire is the CEO of Consalia, a Sales Performance Improvement company whose mindset approach to sales that has delivered over $6.75 billion for our clients in just over 6 years... and growing.