Wednesday, April 6, 2011

Week 4: Blog 3: Shanna Dean


Capability Sourcing: Evaluative Tools

Capability sourcing, according to Bain & Company, “improves a company’s competitive position by ensuring that processes and functions are obtained from the right source at the right cost.” The articles for this week, particularily "Strategic Sourcing: From Periphery to the Core," showcases companies who have successful employeed capability sourcing to encourage growth, reduce costs, and streamline the organization. The article left me wondering about the evaluative tools companies can use to identity areas of improvement. The sourcing opportunities map suggested in the above mentioned article and the capabilities audit scorecard included in "Capitalizing on Capabilities" appear to be simple, easy-to-understand tools to determine what functions have outsourcing potential or potential for growth. However, the qualitative-based measures also seem to rely on subjective impressions and appear less process-oriented than I would have anticipated. Some business experts have suggested other evaluative tools that would perhaps overcome this apparent shortcoming. I imagine that several tools may used in tandum to recognize processes where effective resource management could have a positive impact. I have listed a few of these tools below:

Mitchell, Will. “How Elephants Learn New Tricks: Internal and External Capability Sourcing in the European Telecommunications Industry.” The Fuqua School of Business, Duke University.

While Mr. Mitchell uses the European Telecommunications Industry as a basis from which to develop this model, it is easy to see how it could be useful for businesses in general. He suggests “an emergent model of capability sourcing” that uses a series of “yes or no” questions and work flow chart to determine sourcing capability. This format is much different than the tools provided in the class articles and may provide additional insights during the evaluation process.

Bain & Company provides the following model, which is essentially the same as the opportunities map in Strategic Sourcing, but the graphic is more streamlined and easy to follow (seen above).

Question:
Do you feel that the evaluative tools present above and in this week’s article will prove useful for assessing opporunities for capability sourcing? If yes, in what ways? If no, in what ways could they be improved.

Sources:
Bain & Company, “Capability Sourcing” http://www.bain.com/bainweb/consulting_expertise/capabilities_detail.asp?capID=68

CEOForumGroup
http://www.ceoforum.com.au/article-detail.cfm?cid=6108&t=/Paul-Calthrop--Bain-International/Capability-sourcing-From-the-periphery-to-the-core/

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