Transourcing: A Pragmatic New Strategy for Enterprise Competitiveness >Enable agility through innovative partner collaboration >Tap new customers in mature and emerging markets

Tokyo, JapanAbout/Traditional v. Transourcing™

Transourcing™ is a breakthrough approach because it is designed to transition enterprises to the Knowledge Economy. Companies that continue to use Traditional Outsourcing methods will underperform in the medium term. Transourcing™ companies will build collaborative execution networks that will lead to higher innovation and financial performance.

What is its design purpose?

Traditional outsourcing is designed to make Industrial Economy companies more cost effective and process efficient and, when done well, it achieves that goal. Outsourcing serves the line function and is practiced in isolation because it isn't valued as a core competency. Interaction with vendors is built on Industrial Economy assumptions such as stable business conditions, which limits flexibility. Any transformation that is pursued is virtually always at the business process level, although there is the tendency to term any large-scale outsourcing contract "transformational" to justify its cost and risk.

Traditional outsourcing Transourcing™

Focus: operational, cost reduction

Focus: strategic, innovation

Sponsor: line management

Sponsor: CIO, COO, CFO, SVP

Scope: department, functional

Scope: enterprise

Relationship strategy: maximize vendor capacity to increase specialization and cost concessions

Relationship strategy: promote partner independence by limiting consumption of capacity

Information strategy: closely guard information to prevent competitor copying; suitable for long product life cycles

Information strategy: openly share information to maximize continuous innovation; suitable for short product life cycles

Business case: cost reduction (short-term); core competency focus (long-term)

Business case: efficiency (short-term); innovation, organizational transformation (long-term)

Transformation focus: business process (if any)

Transformation focus: enterprise

Differentiation driver: product and/or service features

Differentiation driver: customer experience

Transourcing™ initially focuses on maximizing the ROI of existing outsourcing projects, but its real aim is developing a core competency in outsourcing. It federates the effort and quickly develops Strategic Outsourcing Competencies, which are designed for a collaborative, networked enterprise. It explicitly builds collaborative relationships centered around trust and shared risk and reward with partners.

It is an enterprise initiative whose strategic purpose is to transform the organization, gradually. Outsourcing saves money and enables the enterprise to become far more adaptive and innovative. The innovation focus is on customer experience, not products or services. Partners in the execution network specialize in understanding various aspects of how customers use products and services to have experiences. This is an exceptionally interactive and fast-moving endeavor that produces a repeatable innovation process and exceptional value-add.

Transourcing™ is sourcing in the Knowledge Economy.

Transourcing™ Disciplines and Origins Outmoded OutsourcingTransourcing™ SummaryTransourcing News Release

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