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4/12/2005
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Safeguarding Business Processes Is One Challenge Of Global Sourcing

Keeping business processes intact is a challenge for many companies, especially when it comes to global sourcing. A panel of Global 50 companies examining the issue suggested that processes core to the business are better handled internally.

The breakage and breakdown of business processes is a challenge for many companies, especially when it comes to global sourcing. To address those challenges, InformationWeek at its Spring Conference on Tuesday gathered a panel of Global 50 companies, who offered attendees advice on how to manage and fix business processes. Although more companies are trying to take their IT operations offshore, "the further you get away from the corporate mother ship, the harder it is to enforce standards," said Ken Braud, director of IT at Halliburton Co.

Halliburton, a provider of products and services to the petroleum and energy industries, has a combination of captive (company-owned) and outsourced operations. Accordingly, it has created centralized standards for its regional operations. But the company has discovered that it's harder to standardize and outsource core processes that directly affect the business. "There are a number of things you can do pretty well globally, but as you get closer to the operation of the business it's better when things are executed internally," Braud said.

Some companies, however, turn to sourcing because they're unable to fix the problem internally. In this case, companies with broken processes should leverage sourcing as a tool, and they should find a trusted business partner that will do more than just manage contracts, said Greg Blount, project director at advisory firm TPI.

Whatever the business process may be, it cannot be fixed without a good strategy, Blount said. "Sourcing involves alignment of incentives because you have to manage all contracts and all relationships, which adds a lot of complexities," he said. In fact, one of the first areas companies should attack is to strategically manage multiple sourcing relationships.

Halliburton's strategy involved implementing a governance process to help the company find the best opportunities for distributing its IT operations globally. Putting a governance process in place first, Braud said, as opposed to deploying tools to automate the business process, allowed Halliburton and its partners make better investment decisions.

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