Chief Offshoring Officer: Defining the Position

by John Berry

So, you want to avoid the offshoring lay off axe? Then become the person who manages all the offshoring initiatives in your organization.

This is only partly tongue-in-cheek. Organizations who have decided that offshoring is an important strategic and operational reality might discover the value, if not the necessity, in creating a senior management function that oversees and supports both strategic and operational decisionmaking throughout the offshoring lifecycle: a chief offshoring officer (COO). The reasons are straightforward enough. The increasing number and complexity of offshoring relationships a company develops and must manage over time, the increasing value at stake in offshoring relationships, and an acknowledgement that these relationships require ongoing management all argue for a dedicated executive who can direct an organization's offshoring efforts. If offshoring represents a portfolio of strategic and cost-cutting activities tied to value creation, then they should be managed as a portfolio of assets by a portfolio manager.

What would the job look like? Ideally, the COO would be involved in a mix of consultative and operational responsibilities, including the following:

• Seek out offshoring opportunities across the enterprise through regular consultation with operational executives. Companies serious about offshoring are continuously thinking about business processes that might be best managed by a third party, whether it be application development, benefits administration, or finance functions. Successful offshoring requires a continuous self-analysis to determine the possible value that might be created against internal capabilities to execute on the vision.

• Filter and gatekeep offshoring proposals emerging from operational areas. All proposals flow through the COO for further consultation with finance and other senior executives. The COO would ideally assist the organization in establishing, first, the strategic and tactical criteria as to why offshoring some set of business processes is a good idea and second, filter specific offshoring proposals against those criteria to determine a specific proposal's suitability for further discussion.

• Act as a business sponsor's best friend. The COO would help the sponsor develop buy-in for an offshoring initiative. This might include proposal and business case development for presentation before an executive board or helping the sponsor run interference through the opposition sure to emerge from internal constituencies feeling threatened, real or imaginary, from the offshoring idea.

• Coordinate and collate the necessary information gathering as input is generated from stakeholders in the offshoring sphere of participation. This sphere includes voices from the operational area where business processes are being considered for offshoring, as well as input from finance, HR, IT, operations, legal, and perhaps the boardroom. Because offshoring in all its complexity requires analytical and decisionmaking expertise from so many domains, it is critical that information flows are unobstructed while process-driven procedures for information creation and submission are well-understood by all participants. Technology like groupware or an intranet containing offshoring decisionmaking templates can help here.

Some organizations have already created executive outsourcing positions, although it is rare today. Adding the management of offshoring into this executive's domain is a natural adjunct. Organizations will start to realize that outsourcing/offshoring is important and complex enough to manage through a dedicated executive, rather than through an atomized approach that disperses responsibility among a lot of managers already burdened with too much work.

In my next Advisor: what conditions must exist for the chief offshoring officer position to take root?

-- John Berry