Business Transformation Requires Transformational Leaders

Companies forgo any number of initiatives for a variety of reasons. Most companies are risk-averse. But what about the initiatives that fall through the cracks of the vetting and due diligence processes, the initiatives that never even result in a business case?

In this Executive Update, we continue the discussion begun in Part I1 about the evolution of business process management (BPM) with respect to today's changes in commercial practice toward service orientation.

Cloud computing is likely to have a continual and lasting impact on sourcing. While still in its infancy, it is bringing about a "weather change" in how outsourcing is viewed as well as in client expectations. In cloud computing, services are provided on a granular, pay- as-you-go basis through a versatile infrastructure that makes possible innumerable service variations.

Most client organizations expect that their providers will continually innovate or carry out some form of value-adding when there is an outsourcing contract. I write "some form" because a typical outsourcing contract does not specify what innovation is expected, let alone when it is to occur (just at the start? continuously?), where it is to occur (technology?

Is your perimeter secure? The answer to that is simple: NO. As business has become more distributed, outsourcing has gone global, supply chains are more connected, employees have become teleworkers, customers demand better information, and so on, we have systematically punched holes into perimeter security until it now resembles Swiss cheese.

Shareholders are demanding. They want higher share prices. They ride a winner, and then when their horse fades, they switch to another horse. In this regard, public companies answer to just one master.

Service-oriented viewpoints, which I outlined in an earlier Update (see "Service-Oriented Viewpoints," Vol. 12, No. 1.), provide a useful, low-risk approach that can help leverage your investment in existing process models and services as part of a well-planned business-IT alignment strategy.

This Advisor continues our discussion of performance reviews for outsourcing contracts. There are three aspects of performance reviews. The first is the successful performance of the scope, which is made up of input performance, process performance, and output performance.