Story: 0528OSO_XERox
6 pg gatefold reprint
Page: 1 of 2 (pg. 5, 6, cover)
Issue: 05/28/01
2001
Winning in Today’s
Web-Driven, Global Economy
through Outsourcing
10 7/8”
10 7/8”
P R O D U C E D
To learn more about Xerox Business Services, visit us on-line at
http://www.xerox.com/services
7 7/8”
8”
A S S O C I AT I O N
W I T H
M I C H A E L
F.
C O R B E T T
&
A S S O C I A T E S,
featuring
© 2001 Time Inc.
XEROX6, The Document Company6, the digital X6 are trademarks of Xerox Corporation.
I N
R
E P R I N T E D
SPECI
FROM
A L
P
T H E
SUPPLEM
2001 ISSUE
R O M O T I O N A L
M
A Y
28,
8”
E N T
O F
F O R T U N E®
L T D.
6 pg gatefold reprint
Page: 2 of 2 (pg. 2, 3, 4)
Issue: 05/28/01
Outsourcing 2001
OUTSOURCING IS REDEFINING BUSINESS IN WAYS FEW COULD HAVE IMAGINED JUST A FEW SHORT
YEARS AGO. IN FACT, IT’S INCREASINGLY DIFFICULT TO IMAGINE HOW ANY ORGANIZATION
COULD SURVIVE, LET ALONE THRIVE, WITHOUT OUTSOURCING.
N
10 7/8”
O ORGANIZATION can stay
competitive in today ’s environment by relying solely
on its own resources,” says
Dr. Wendell Jones, outsourcing pioneer
at McDonnell Douglas in the early ’90s
and today CEO of Outsourcing Advisors
International.
Industry reports suggest that most
executives agree with Dr. Jones’s
assessment. Based on research conducted for The Outsourcing Research
Council by Michael F. Corbett &
Associates, Ltd., the roughly 3,000
U.S. companies with more than half a
billion in revenue will spend 7 percent of
that revenue – or $874 billion – on outsourcing this year. That’s an amount
just about equal to the total revenue of
the top five companies on the 2001
FORTUNE 500< list and it’s one-third
larger than the entire discretionary
portion of the U.S. federal government
budget. Add to that the fact that almost
every industry study projects outsourcing spending to continue to climb at a
rate of 15 percent to 25 percent per
annum for the foreseeable future and
you begin to understand outsourcing’s
impact on the way we now do business.
As the information in this special
report demonstrates, this use of outsourcing is expanding in another way as
well. It’s expanding across every facet of
the modern organization. From technology to facilities to corporate services to
customer care, organizations are using
outsourcing to fundamentally change
every aspect of their operation, and they
are doing so to the benefit of their cus-
tomers, employees, and shareholders
alike. Gone are the days when outsourcing could be viewed as a zero-sum game
– where the organization achieved a
quick cost reduction at the expense of
other parts of its business.
In fact, almost two-thirds of attendees at this year’s Outsourcing World
Summit said that cost savings was not
their company ’s primary reason for outsourcing. Just as important were freeing
executive time and organizational
resources for refocusing on the core of
the business and improved competitiveness through increased quality, speed,
and innovation. “Outsourcing really isn’t
about taking anything out of the busi-
ness,” says Brian Maloney, president of
AT&T Solutions, “ it’s about investing in
the relationship and becoming a virtual
extension of the client’s business.”
ONE STANDARD:
BEST-IN-WORLD
Today ’s Web-driven, global economy
forces executives to reexamine every
aspect of their business against a single
standard: “ best-in-world.” As James
Brian Quinn, Buchanan Professor of
Management at Dartmouth College, so
powerfully puts it, “Core competencies
are quite simply what an organization
is best-in-world at. Everything else is
somebody else’s core competency
TOP REASONS FOR OUTSOURCING
CONSERVE CAPITAL 1%
FOSTER INNOVATION 4%
INCREASE SPEED
TO MARKET 10%
IMPROVE QUALITY 13%
REDUCE COSTS 36%
FOCUS ON CORE 36%
Source: The 2001 Outsourcing World Summit
Copyright© 2001 Michael F. Corbett & Associates, Ltd. All rights reserved.
8”
and is better acquired through a
strategic relationship with that firm.” If
an organization continues to perform
non-core activities inside, it ’s a sure
bet that it is sacrificing some part of its
competitive edge – something few can
afford to do for long.
At the same time, the resource and
talent pool from which an organization
can draw is increasingly global as well.
For example, technology now makes it
possible to operate a network of centers
anywhere in the world almost as seamlessly as if they were next door. Similar
examples can be drawn from such areas
as manufacturing, programming, product design, and even accounting and
finance. Outsourcing service providers,
because of their focus and investment in
what to others is often a lower-return
back office operation, are particularly
adept at leveraging these emerging
global talent pools.
Technology – especially the Web –
has also unleashed a rapid-fire pace of
change never before seen in business.
This makes it increasingly important for
organizations to maintain a flexible, variable cost structure – one that can be
adjusted quickly, up or down, depending
upon the shifting realities of the business. Here again, outsourcing plays an
important role in helping organizations
remain nimble. Through outsourcing,
they acquire needed results not through
internal investments in employees and
fixed assets but through a different kind
of investment – an investment in a flexible relationship with a service provider.
Finally, and possibly most importantly,
is innovation. As James Brian Quinn
says, “ No company alone can possibly
hope to out-innovate all the competitors,
potential competitors, suppliers, and
external knowledge sources in its marketplace worldwide.” This is probably
the single strongest argument for outsourcing in today ’s Web-driven, global
economy – harnessing the innovative
solutions that only specialized firms can
generate. It is their singular, passionate
focus on doing what they do best that
XEROX CORPORATION
FOUR OF THE NATION’S LEADING WIRELESS COMMUNICATIONS PROVIDERS JOINED FORCES
TO FORM VERIZON WIRELESS. XEROX CORPORATION HELPED THE COMPANY ACHIEVE
ITS AGGRESSIVE GOALS FOR EFFICIENCY AND GROWTH BY DELIVERING
A 13 PERCENT SAVING IN DOCUMENT MANAGEMENT COSTS.
V
makes this possible. Outsourcing is,
after all, all about leveraging this power
and directing it toward the customers
you serve and the markets in which
you compete.
THE THREE “S’S” OF
SUCCESSFUL OUTSOURCING
Although nothing as complex as a longterm relationship between two companies
can ever be distilled down to mere
sound bites, there are some overarching
concepts that are common to successful
decision making and execution.
The first “s” is strategy. Much as the
Cheshire Cat advises Alice that which
path she should follow “depends a good
deal on where you want to get to,”
outsourcing should not be seen as
an end point, but a means to an end.
Successful organizations do not outsource to outsource; they outsource
to create specific advantages for their
business. Successful outsourcing
emanates from and stays in lockstep
with the business’s strategy.
By thinking strategically and understanding how leveraging the unique
capabilities and resources of specialized
outside organizations can help, an executive will find himself or herself pursuing
the right relationships for the right
reasons.
8”
The second “s” is selection. This
means selecting the right areas to
apply outsourcing to and, even more
importantly, selecting the right organizations with which to partner.
The final “s” stands for system.
There must be a management system
for making sure that the relationship
continues to generate the advantages
sought and receives the necessary ongoing investment of management time,
attention, and energy. Once created,
an outsourcing relationship becomes
a strategic asset – just as valuable and
equally as critical to the organization’s
success as any other asset.
As today ’s Web-driven, global economy continues to reshape businesses in
new and unexpected ways, one thing is
certain: Competition and the drive to
improve business performance while
managing risks will dominate executive
thinking and action. Outsourcing is
a powerful weapon in the executive
arsenal. Connecting outsourcing to
the business’s strategy, selecting the
right opportunities and partners, and
then supporting those relationships
with a system designed to manage the
risks and opportunities are the essential
success factors for this still-evolving
business model.
ERIZON WIRELESS is the
largest wireless communications provider in the U.S., with
28 million voice and data
customers. The new coast-to-coast
provider was formed last year through a
combination of the U.S. wireless businesses of Verizon Communications and
Vodafone, including Bell Atlantic Mobile,
AirTouch Cellular, GTE Wireless, and
PrimeCo Personal Communications.
Headquartered in Bedminster, New
Jersey, Verizon Wireless has 40,000
employees serving customers in 96 of
the top 100 U.S. markets.
John McGrath, Verizon Wireless’s
director of procurement for facilities and
administration, says, “Pulling this new
business together – across all of our newly
combined facilities – was the top priority.
We launched a corporatewide initiative to
drive both cost savings and consistency
in all our facilities. The outsourcing of
non-core activities to trusted partners with
the expertise and proven delivery excellence was a key part of this initiative. We
“ We look for partners
with a solid track
record with us – companies
that combine both
process expertise and the
right people skills.”
JOHN MCGRATH
Director of Procurement for
Facilities and Administration
Verizon Wireless
looked for partners with a solid track
record with us – companies that combined both process expertise and the
right people skills. Our partners needed
to be able to create the right relationship
and then back it with a structure that
could maintain those services over time.”
CONSISTENT OPERATIONS
SUPPORT FUTURE GROWTH
Xerox Business Services, the global
Document Company headquartered in
Stamford, Connecticut, has had a relationship with Bell Atlantic Mobile since
1997. Xerox managed all of Bell Atlantic
Mobile’s document assets – copiers,
supplies, and production printing, as
well as mailroom operations. The new
Verizon Wireless is much larger, with
more than 1,700 pieces of equipment
in 1,300 locations billed through more
than 1,000 separate invoices.
“ We saw a great opportunity to take
costs out of the system for Verizon
Wireless and to run things more efficiently,” says Mike Vitrit, Xerox ’s national
account representative for Verizon
Wireless. “ But, just as important were
the opportunities to streamline the management process, create a consistent
operation that could support future
growth, and reduce cycle times.”
On May 1, 2001, Xerox was given full
document center management responsibility for Verizon Wireless nationally.
This includes not just on-site document
and mailroom services – including the
ordering, installation, and removal of all
copiers, engineering and production
printers, faxes, and scanners – but a
national call center for handling document requirements for Verizon
7 7/8”
Wireless’s employees and a single,
fully customized invoice system. “ The
consolidated invoicing for all of these
services has been particularly valuable,”
says McGrath. “It has combined all of
the charges onto a single, monthly
invoice. It ’s been tailored specifically to
my needs so that I can easily charge,
down to the penny, each business unit
for the services they use.”
These kinds of “soft cost” savings
may be even more than the direct
cost reduction, which was significant.
McGrath estimates that Verizon Wireless
will save $2.2 million in direct costs over
the next three years through its relationship with Xerox. “ However, the most
important part of what we’re doing,” he
says, “ is creating a consistent platform
across all of our operations upon which
we can build for the future. We now have
the ability to manage these activities as
one company.”
Working with Xerox, that future will
be built through an iterative process
of continual improvement. For example,
Xerox teams are already tackling new
opportunities – such as returned mail
handling, just-in-time printing, and
e-creation of forms and records.
All these solutions will evolve from a
strong basis of trust. Verizon Wireless
knows Xerox. They know what Xerox
can do and they rely on their partner to
be that single focal point that can take
care of a growing array of business
challenges. As Peggy Lynch, Xerox ’s
global account general manager for
Verizon Communications sees it and
says it, “ Trust is key. It is earned and it
is not treated lightly. Xerox earns that
trust each and every day.”
10 7/8”
Story: 0528OSO_XERox
6 pg gatefold reprint
Page: 2 of 2 (pg. 2, 3, 4)
Issue: 05/28/01
Outsourcing 2001
OUTSOURCING IS REDEFINING BUSINESS IN WAYS FEW COULD HAVE IMAGINED JUST A FEW SHORT
YEARS AGO. IN FACT, IT’S INCREASINGLY DIFFICULT TO IMAGINE HOW ANY ORGANIZATION
COULD SURVIVE, LET ALONE THRIVE, WITHOUT OUTSOURCING.
N
10 7/8”
O ORGANIZATION can stay
competitive in today ’s environment by relying solely
on its own resources,” says
Dr. Wendell Jones, outsourcing pioneer
at McDonnell Douglas in the early ’90s
and today CEO of Outsourcing Advisors
International.
Industry reports suggest that most
executives agree with Dr. Jones’s
assessment. Based on research conducted for The Outsourcing Research
Council by Michael F. Corbett &
Associates, Ltd., the roughly 3,000
U.S. companies with more than half a
billion in revenue will spend 7 percent of
that revenue – or $874 billion – on outsourcing this year. That’s an amount
just about equal to the total revenue of
the top five companies on the 2001
FORTUNE 500< list and it’s one-third
larger than the entire discretionary
portion of the U.S. federal government
budget. Add to that the fact that almost
every industry study projects outsourcing spending to continue to climb at a
rate of 15 percent to 25 percent per
annum for the foreseeable future and
you begin to understand outsourcing’s
impact on the way we now do business.
As the information in this special
report demonstrates, this use of outsourcing is expanding in another way as
well. It’s expanding across every facet of
the modern organization. From technology to facilities to corporate services to
customer care, organizations are using
outsourcing to fundamentally change
every aspect of their operation, and they
are doing so to the benefit of their cus-
tomers, employees, and shareholders
alike. Gone are the days when outsourcing could be viewed as a zero-sum game
– where the organization achieved a
quick cost reduction at the expense of
other parts of its business.
In fact, almost two-thirds of attendees at this year’s Outsourcing World
Summit said that cost savings was not
their company ’s primary reason for outsourcing. Just as important were freeing
executive time and organizational
resources for refocusing on the core of
the business and improved competitiveness through increased quality, speed,
and innovation. “Outsourcing really isn’t
about taking anything out of the busi-
ness,” says Brian Maloney, president of
AT&T Solutions, “ it’s about investing in
the relationship and becoming a virtual
extension of the client’s business.”
ONE STANDARD:
BEST-IN-WORLD
Today ’s Web-driven, global economy
forces executives to reexamine every
aspect of their business against a single
standard: “ best-in-world.” As James
Brian Quinn, Buchanan Professor of
Management at Dartmouth College, so
powerfully puts it, “Core competencies
are quite simply what an organization
is best-in-world at. Everything else is
somebody else’s core competency
TOP REASONS FOR OUTSOURCING
CONSERVE CAPITAL 1%
FOSTER INNOVATION 4%
INCREASE SPEED
TO MARKET 10%
IMPROVE QUALITY 13%
REDUCE COSTS 36%
FOCUS ON CORE 36%
Source: The 2001 Outsourcing World Summit
Copyright© 2001 Michael F. Corbett & Associates, Ltd. All rights reserved.
8”
and is better acquired through a
strategic relationship with that firm.” If
an organization continues to perform
non-core activities inside, it ’s a sure
bet that it is sacrificing some part of its
competitive edge – something few can
afford to do for long.
At the same time, the resource and
talent pool from which an organization
can draw is increasingly global as well.
For example, technology now makes it
possible to operate a network of centers
anywhere in the world almost as seamlessly as if they were next door. Similar
examples can be drawn from such areas
as manufacturing, programming, product design, and even accounting and
finance. Outsourcing service providers,
because of their focus and investment in
what to others is often a lower-return
back office operation, are particularly
adept at leveraging these emerging
global talent pools.
Technology – especially the Web –
has also unleashed a rapid-fire pace of
change never before seen in business.
This makes it increasingly important for
organizations to maintain a flexible, variable cost structure – one that can be
adjusted quickly, up or down, depending
upon the shifting realities of the business. Here again, outsourcing plays an
important role in helping organizations
remain nimble. Through outsourcing,
they acquire needed results not through
internal investments in employees and
fixed assets but through a different kind
of investment – an investment in a flexible relationship with a service provider.
Finally, and possibly most importantly,
is innovation. As James Brian Quinn
says, “ No company alone can possibly
hope to out-innovate all the competitors,
potential competitors, suppliers, and
external knowledge sources in its marketplace worldwide.” This is probably
the single strongest argument for outsourcing in today ’s Web-driven, global
economy – harnessing the innovative
solutions that only specialized firms can
generate. It is their singular, passionate
focus on doing what they do best that
XEROX CORPORATION
FOUR OF THE NATION’S LEADING WIRELESS COMMUNICATIONS PROVIDERS JOINED FORCES
TO FORM VERIZON WIRELESS. XEROX CORPORATION HELPED THE COMPANY ACHIEVE
ITS AGGRESSIVE GOALS FOR EFFICIENCY AND GROWTH BY DELIVERING
A 13 PERCENT SAVING IN DOCUMENT MANAGEMENT COSTS.
V
makes this possible. Outsourcing is,
after all, all about leveraging this power
and directing it toward the customers
you serve and the markets in which
you compete.
THE THREE “S’S” OF
SUCCESSFUL OUTSOURCING
Although nothing as complex as a longterm relationship between two companies
can ever be distilled down to mere
sound bites, there are some overarching
concepts that are common to successful
decision making and execution.
The first “s” is strategy. Much as the
Cheshire Cat advises Alice that which
path she should follow “depends a good
deal on where you want to get to,”
outsourcing should not be seen as
an end point, but a means to an end.
Successful organizations do not outsource to outsource; they outsource
to create specific advantages for their
business. Successful outsourcing
emanates from and stays in lockstep
with the business’s strategy.
By thinking strategically and understanding how leveraging the unique
capabilities and resources of specialized
outside organizations can help, an executive will find himself or herself pursuing
the right relationships for the right
reasons.
8”
The second “s” is selection. This
means selecting the right areas to
apply outsourcing to and, even more
importantly, selecting the right organizations with which to partner.
The final “s” stands for system.
There must be a management system
for making sure that the relationship
continues to generate the advantages
sought and receives the necessary ongoing investment of management time,
attention, and energy. Once created,
an outsourcing relationship becomes
a strategic asset – just as valuable and
equally as critical to the organization’s
success as any other asset.
As today ’s Web-driven, global economy continues to reshape businesses in
new and unexpected ways, one thing is
certain: Competition and the drive to
improve business performance while
managing risks will dominate executive
thinking and action. Outsourcing is
a powerful weapon in the executive
arsenal. Connecting outsourcing to
the business’s strategy, selecting the
right opportunities and partners, and
then supporting those relationships
with a system designed to manage the
risks and opportunities are the essential
success factors for this still-evolving
business model.
ERIZON WIRELESS is the
largest wireless communications provider in the U.S., with
28 million voice and data
customers. The new coast-to-coast
provider was formed last year through a
combination of the U.S. wireless businesses of Verizon Communications and
Vodafone, including Bell Atlantic Mobile,
AirTouch Cellular, GTE Wireless, and
PrimeCo Personal Communications.
Headquartered in Bedminster, New
Jersey, Verizon Wireless has 40,000
employees serving customers in 96 of
the top 100 U.S. markets.
John McGrath, Verizon Wireless’s
director of procurement for facilities and
administration, says, “Pulling this new
business together – across all of our newly
combined facilities – was the top priority.
We launched a corporatewide initiative to
drive both cost savings and consistency
in all our facilities. The outsourcing of
non-core activities to trusted partners with
the expertise and proven delivery excellence was a key part of this initiative. We
“ We look for partners
with a solid track
record with us – companies
that combine both
process expertise and the
right people skills.”
JOHN MCGRATH
Director of Procurement for
Facilities and Administration
Verizon Wireless
looked for partners with a solid track
record with us – companies that combined both process expertise and the
right people skills. Our partners needed
to be able to create the right relationship
and then back it with a structure that
could maintain those services over time.”
CONSISTENT OPERATIONS
SUPPORT FUTURE GROWTH
Xerox Business Services, the global
Document Company headquartered in
Stamford, Connecticut, has had a relationship with Bell Atlantic Mobile since
1997. Xerox managed all of Bell Atlantic
Mobile’s document assets – copiers,
supplies, and production printing, as
well as mailroom operations. The new
Verizon Wireless is much larger, with
more than 1,700 pieces of equipment
in 1,300 locations billed through more
than 1,000 separate invoices.
“ We saw a great opportunity to take
costs out of the system for Verizon
Wireless and to run things more efficiently,” says Mike Vitrit, Xerox ’s national
account representative for Verizon
Wireless. “ But, just as important were
the opportunities to streamline the management process, create a consistent
operation that could support future
growth, and reduce cycle times.”
On May 1, 2001, Xerox was given full
document center management responsibility for Verizon Wireless nationally.
This includes not just on-site document
and mailroom services – including the
ordering, installation, and removal of all
copiers, engineering and production
printers, faxes, and scanners – but a
national call center for handling document requirements for Verizon
7 7/8”
Wireless’s employees and a single,
fully customized invoice system. “ The
consolidated invoicing for all of these
services has been particularly valuable,”
says McGrath. “It has combined all of
the charges onto a single, monthly
invoice. It ’s been tailored specifically to
my needs so that I can easily charge,
down to the penny, each business unit
for the services they use.”
These kinds of “soft cost” savings
may be even more than the direct
cost reduction, which was significant.
McGrath estimates that Verizon Wireless
will save $2.2 million in direct costs over
the next three years through its relationship with Xerox. “ However, the most
important part of what we’re doing,” he
says, “ is creating a consistent platform
across all of our operations upon which
we can build for the future. We now have
the ability to manage these activities as
one company.”
Working with Xerox, that future will
be built through an iterative process
of continual improvement. For example,
Xerox teams are already tackling new
opportunities – such as returned mail
handling, just-in-time printing, and
e-creation of forms and records.
All these solutions will evolve from a
strong basis of trust. Verizon Wireless
knows Xerox. They know what Xerox
can do and they rely on their partner to
be that single focal point that can take
care of a growing array of business
challenges. As Peggy Lynch, Xerox ’s
global account general manager for
Verizon Communications sees it and
says it, “ Trust is key. It is earned and it
is not treated lightly. Xerox earns that
trust each and every day.”
10 7/8”
Story: 0528OSO_XERox
6 pg gatefold reprint
Page: 2 of 2 (pg. 2, 3, 4)
Issue: 05/28/01
Outsourcing 2001
OUTSOURCING IS REDEFINING BUSINESS IN WAYS FEW COULD HAVE IMAGINED JUST A FEW SHORT
YEARS AGO. IN FACT, IT’S INCREASINGLY DIFFICULT TO IMAGINE HOW ANY ORGANIZATION
COULD SURVIVE, LET ALONE THRIVE, WITHOUT OUTSOURCING.
N
10 7/8”
O ORGANIZATION can stay
competitive in today ’s environment by relying solely
on its own resources,” says
Dr. Wendell Jones, outsourcing pioneer
at McDonnell Douglas in the early ’90s
and today CEO of Outsourcing Advisors
International.
Industry reports suggest that most
executives agree with Dr. Jones’s
assessment. Based on research conducted for The Outsourcing Research
Council by Michael F. Corbett &
Associates, Ltd., the roughly 3,000
U.S. companies with more than half a
billion in revenue will spend 7 percent of
that revenue – or $874 billion – on outsourcing this year. That’s an amount
just about equal to the total revenue of
the top five companies on the 2001
FORTUNE 500< list and it’s one-third
larger than the entire discretionary
portion of the U.S. federal government
budget. Add to that the fact that almost
every industry study projects outsourcing spending to continue to climb at a
rate of 15 percent to 25 percent per
annum for the foreseeable future and
you begin to understand outsourcing’s
impact on the way we now do business.
As the information in this special
report demonstrates, this use of outsourcing is expanding in another way as
well. It’s expanding across every facet of
the modern organization. From technology to facilities to corporate services to
customer care, organizations are using
outsourcing to fundamentally change
every aspect of their operation, and they
are doing so to the benefit of their cus-
tomers, employees, and shareholders
alike. Gone are the days when outsourcing could be viewed as a zero-sum game
– where the organization achieved a
quick cost reduction at the expense of
other parts of its business.
In fact, almost two-thirds of attendees at this year’s Outsourcing World
Summit said that cost savings was not
their company ’s primary reason for outsourcing. Just as important were freeing
executive time and organizational
resources for refocusing on the core of
the business and improved competitiveness through increased quality, speed,
and innovation. “Outsourcing really isn’t
about taking anything out of the busi-
ness,” says Brian Maloney, president of
AT&T Solutions, “ it’s about investing in
the relationship and becoming a virtual
extension of the client’s business.”
ONE STANDARD:
BEST-IN-WORLD
Today ’s Web-driven, global economy
forces executives to reexamine every
aspect of their business against a single
standard: “ best-in-world.” As James
Brian Quinn, Buchanan Professor of
Management at Dartmouth College, so
powerfully puts it, “Core competencies
are quite simply what an organization
is best-in-world at. Everything else is
somebody else’s core competency
TOP REASONS FOR OUTSOURCING
CONSERVE CAPITAL 1%
FOSTER INNOVATION 4%
INCREASE SPEED
TO MARKET 10%
IMPROVE QUALITY 13%
REDUCE COSTS 36%
FOCUS ON CORE 36%
Source: The 2001 Outsourcing World Summit
Copyright© 2001 Michael F. Corbett & Associates, Ltd. All rights reserved.
8”
and is better acquired through a
strategic relationship with that firm.” If
an organization continues to perform
non-core activities inside, it ’s a sure
bet that it is sacrificing some part of its
competitive edge – something few can
afford to do for long.
At the same time, the resource and
talent pool from which an organization
can draw is increasingly global as well.
For example, technology now makes it
possible to operate a network of centers
anywhere in the world almost as seamlessly as if they were next door. Similar
examples can be drawn from such areas
as manufacturing, programming, product design, and even accounting and
finance. Outsourcing service providers,
because of their focus and investment in
what to others is often a lower-return
back office operation, are particularly
adept at leveraging these emerging
global talent pools.
Technology – especially the Web –
has also unleashed a rapid-fire pace of
change never before seen in business.
This makes it increasingly important for
organizations to maintain a flexible, variable cost structure – one that can be
adjusted quickly, up or down, depending
upon the shifting realities of the business. Here again, outsourcing plays an
important role in helping organizations
remain nimble. Through outsourcing,
they acquire needed results not through
internal investments in employees and
fixed assets but through a different kind
of investment – an investment in a flexible relationship with a service provider.
Finally, and possibly most importantly,
is innovation. As James Brian Quinn
says, “ No company alone can possibly
hope to out-innovate all the competitors,
potential competitors, suppliers, and
external knowledge sources in its marketplace worldwide.” This is probably
the single strongest argument for outsourcing in today ’s Web-driven, global
economy – harnessing the innovative
solutions that only specialized firms can
generate. It is their singular, passionate
focus on doing what they do best that
XEROX CORPORATION
FOUR OF THE NATION’S LEADING WIRELESS COMMUNICATIONS PROVIDERS JOINED FORCES
TO FORM VERIZON WIRELESS. XEROX CORPORATION HELPED THE COMPANY ACHIEVE
ITS AGGRESSIVE GOALS FOR EFFICIENCY AND GROWTH BY DELIVERING
A 13 PERCENT SAVING IN DOCUMENT MANAGEMENT COSTS.
V
makes this possible. Outsourcing is,
after all, all about leveraging this power
and directing it toward the customers
you serve and the markets in which
you compete.
THE THREE “S’S” OF
SUCCESSFUL OUTSOURCING
Although nothing as complex as a longterm relationship between two companies
can ever be distilled down to mere
sound bites, there are some overarching
concepts that are common to successful
decision making and execution.
The first “s” is strategy. Much as the
Cheshire Cat advises Alice that which
path she should follow “depends a good
deal on where you want to get to,”
outsourcing should not be seen as
an end point, but a means to an end.
Successful organizations do not outsource to outsource; they outsource
to create specific advantages for their
business. Successful outsourcing
emanates from and stays in lockstep
with the business’s strategy.
By thinking strategically and understanding how leveraging the unique
capabilities and resources of specialized
outside organizations can help, an executive will find himself or herself pursuing
the right relationships for the right
reasons.
8”
The second “s” is selection. This
means selecting the right areas to
apply outsourcing to and, even more
importantly, selecting the right organizations with which to partner.
The final “s” stands for system.
There must be a management system
for making sure that the relationship
continues to generate the advantages
sought and receives the necessary ongoing investment of management time,
attention, and energy. Once created,
an outsourcing relationship becomes
a strategic asset – just as valuable and
equally as critical to the organization’s
success as any other asset.
As today ’s Web-driven, global economy continues to reshape businesses in
new and unexpected ways, one thing is
certain: Competition and the drive to
improve business performance while
managing risks will dominate executive
thinking and action. Outsourcing is
a powerful weapon in the executive
arsenal. Connecting outsourcing to
the business’s strategy, selecting the
right opportunities and partners, and
then supporting those relationships
with a system designed to manage the
risks and opportunities are the essential
success factors for this still-evolving
business model.
ERIZON WIRELESS is the
largest wireless communications provider in the U.S., with
28 million voice and data
customers. The new coast-to-coast
provider was formed last year through a
combination of the U.S. wireless businesses of Verizon Communications and
Vodafone, including Bell Atlantic Mobile,
AirTouch Cellular, GTE Wireless, and
PrimeCo Personal Communications.
Headquartered in Bedminster, New
Jersey, Verizon Wireless has 40,000
employees serving customers in 96 of
the top 100 U.S. markets.
John McGrath, Verizon Wireless’s
director of procurement for facilities and
administration, says, “Pulling this new
business together – across all of our newly
combined facilities – was the top priority.
We launched a corporatewide initiative to
drive both cost savings and consistency
in all our facilities. The outsourcing of
non-core activities to trusted partners with
the expertise and proven delivery excellence was a key part of this initiative. We
“ We look for partners
with a solid track
record with us – companies
that combine both
process expertise and the
right people skills.”
JOHN MCGRATH
Director of Procurement for
Facilities and Administration
Verizon Wireless
looked for partners with a solid track
record with us – companies that combined both process expertise and the
right people skills. Our partners needed
to be able to create the right relationship
and then back it with a structure that
could maintain those services over time.”
CONSISTENT OPERATIONS
SUPPORT FUTURE GROWTH
Xerox Business Services, the global
Document Company headquartered in
Stamford, Connecticut, has had a relationship with Bell Atlantic Mobile since
1997. Xerox managed all of Bell Atlantic
Mobile’s document assets – copiers,
supplies, and production printing, as
well as mailroom operations. The new
Verizon Wireless is much larger, with
more than 1,700 pieces of equipment
in 1,300 locations billed through more
than 1,000 separate invoices.
“ We saw a great opportunity to take
costs out of the system for Verizon
Wireless and to run things more efficiently,” says Mike Vitrit, Xerox ’s national
account representative for Verizon
Wireless. “ But, just as important were
the opportunities to streamline the management process, create a consistent
operation that could support future
growth, and reduce cycle times.”
On May 1, 2001, Xerox was given full
document center management responsibility for Verizon Wireless nationally.
This includes not just on-site document
and mailroom services – including the
ordering, installation, and removal of all
copiers, engineering and production
printers, faxes, and scanners – but a
national call center for handling document requirements for Verizon
7 7/8”
Wireless’s employees and a single,
fully customized invoice system. “ The
consolidated invoicing for all of these
services has been particularly valuable,”
says McGrath. “It has combined all of
the charges onto a single, monthly
invoice. It ’s been tailored specifically to
my needs so that I can easily charge,
down to the penny, each business unit
for the services they use.”
These kinds of “soft cost” savings
may be even more than the direct
cost reduction, which was significant.
McGrath estimates that Verizon Wireless
will save $2.2 million in direct costs over
the next three years through its relationship with Xerox. “ However, the most
important part of what we’re doing,” he
says, “ is creating a consistent platform
across all of our operations upon which
we can build for the future. We now have
the ability to manage these activities as
one company.”
Working with Xerox, that future will
be built through an iterative process
of continual improvement. For example,
Xerox teams are already tackling new
opportunities – such as returned mail
handling, just-in-time printing, and
e-creation of forms and records.
All these solutions will evolve from a
strong basis of trust. Verizon Wireless
knows Xerox. They know what Xerox
can do and they rely on their partner to
be that single focal point that can take
care of a growing array of business
challenges. As Peggy Lynch, Xerox ’s
global account general manager for
Verizon Communications sees it and
says it, “ Trust is key. It is earned and it
is not treated lightly. Xerox earns that
trust each and every day.”
10 7/8”
Story: 0528OSO_XERox