The Australian Chapter News Bulletin

The International Association of Outsourcing Professionals

(IAOP)
-----------------------------------------------------------------------------------------------------------------------------------------------
The latest news and offers from The International Association of Outsourcing Professionals (IAOP)
Australian Chapter

Zia Qureshi, Chairman, Australian Chapter of IN THIS ISSUE:

IAOP has been involved in outsourcing since his
early career in late 1980s and is Australias well Latest News
recognised authority on Outsourcing. In
recognition of Zias expertise and contribution to Knowledge Sharing Session
this field, he was appointed Chairman of Australian - Chairmans Address
Chapter of IAOP. Zia is also appointed as a
member of the IAOPs Research Committee and - Guest Speaker
has been participating in the Committees research - Tony Henshaw, UNISYS
activities.
Renewing Outsourcing Contracts
Tony Henshaw VP and General Manager, UNISYS Outsourcing Standards and Certification Program
Australia Pty Ltd, has been in the centre of major
outsourcing deals and operations for over a decade IAOP Membership
in key executive roles in EDS, Telstra and now No manager Involved in Sourcing Strategies and Management
UNISYS, Tony has experienced the pains and
gains of making outsourcing work and is driven by can afford NOT to be a member
a personal drive for innovation and focus on IAOP Events
sustainability of outsourcing.

Latest News Headlines

2008 World Outsourcing Summit, a huge success, over 700
delegates from around the world

Australian chapter executive committee meeting held to plan
next 6 months of activities.

Outsourcing professional certification program expanding
rapidly to be introduced in Australasia

IAOP knowledge centre ..for even better access
www.outsourcingprofessional.org

Plans underway for IAOP Asia Pacific Summit in 2009 Zia Qureshi, Chief Executive, Business Catalyst
International and Chairman of The Australian
Chapter of IAOP
Latest News

World Outsourcing Summit held late last month at Disneys Contemporary Resort in Orlando, Florida
was a huge success with over 700 delegates from around the world.

Plans for IAOP Asia Pacific Outsourcing Summit next year

Asia Pacific Advisory Board is being formed to start regional collaboration

Australian Chapter Executive Committee meeting held on 26th February. Attended by Tony White
Qantas, Zia Qureshi Chairman IAOP Australia, Tony Henshaw UNISYS, and Khalil Allahwala
Assistant Chair IAOP Australia

Collaboration between Australian Chapter and Beijing/Chinese chapter; Chapter chairs from both
countries to be represented on each others executive committees.

Next IAOP chapter meeting features guest speaker:

Virginia Walker, GM Management Services, EIT Operations
Commonwealth Bank of Australia
- Wednesday 9 April 2008, 5-7pm
- Tattersalls Club, 181 Elizabeth Street, Sydney

All are welcome to attend, so please register at

http://www.outsourcingprofessional.org/catalog/buy.asp?PID=89

Guests at IAOP Knowledge Sharing and Networking Session

Zia Qureshi, Chairman of IAOP Australia was invited to speak at the World
Outsourcing Summit 2008,
held at Disneys Contemporary Resort, Orlando, USA

The summit was held in February this year and was

attended by over 700 delegates from around the world.

The Summit covered a wide range of topics from

practitioners in the filed as well as keynote speeches.

His presentation was highly ranked and brought to bear the

depth of his experience in assisting a range of clients over
the years with their outsourcing initiatives, including CBA,
BHP, Westpac, Fairfax and so on.

Zia Qureshi with Walter Fang Chairman IAOP China

The following is a brief summary of Zias presentation:

One of the big problems with managing outsourcing over the last decade has been the fact that
corporations have not applied the full range of governance and management practices to outsourcing that
one would expect. Instead, they have focused mainly on specific outsourcing practices such as contract
management, relationship management, performance measurement and so on.

This situation has led to big gaps in the managerial process that is required to effectively manage an
operation, a service or a business process. This situation has arisen due to the belief that the service
provider will take care of the management process as part of the service delivery. Zias experience shows
that corporations need to realise that outsourcing still requires proactive leadership, governance and
management activities to achieve success as does an in-house operation. However, the methods and
responsibilities may differ somewhat.

This presentation will outline a complete management model including the baseline organisational
management framework, combined with leading practices that recognise that outsourcing is a different
way of doing business. The overall framework will cover key areas such as, lateral leadership,
commercial management, talent management, collaborative business planning, business process re-
alignment, innovation mechanisms, one team concept, integrated management and harnessing the power
of alignment.

Keynote speakers addresses raised several interesting points, they were no longer talking about the
viability or applicability of outsourcing, but were looking beyond to see what changes are coming in the
business world as a result of outsourcing.
 Robert Reich, former Clinton Administration labor secretary, opened the event. Key points:

Entry barriers in business are dropping (at least they are becoming commoditized) and the only real barrier
left is that of people. The hunt for talent has been a topic of discussion among businesses, and Reich
reinforced the belief that it is the skills, knowledge and talent of people that will help differentiate
companies in the marketplace.

The word "outsourcing" is outmoded. Not because it has a negative connotation, but according to Reich, it
is so well integrated into the business lexicon that the real discussion now is about "sourcing" (local and/or
global). He expressed the view that the future of business is all about supply chain integration - globally.
Outsourcing is just another dimension of this sourcing chain integration.

Addressing the "political" issue of outsourcing costing jobs, he argued that technology disintermediation
eliminates more low-end jobs than outsourcing.

Dr. Oren Harari, noted author and a popular OWS speaker, was as thought provoking and interesting as
he has been at previous Summits. He addressed the topic of how to create real value for businesses and
what makes a company successful in a fast changing world. He cited companies such as Apple, which used
innovation and differentiating capacity to alter the marketplace and redefine their business space. Some of
Dr. Harari's ideas:

Companies need to create unchartered value - for their customers and for themselves. Value creation is
going to be the differentiator in the marketplace and the barrier against changes in the marketplace.

Extending the notion of creating unchartered value for their customers, he encouraged delegates to think
about how to lead their customers to an impossible place. There is no such thing as customer satisfaction or
delight when expectations are only just met. To create that feeling, customers must be taken to a special
place (a "WOW") and provided with unchartered value. His message to outsourcing service providers was
simple: make sure that the service they provide is generating extra value for their customer's customer.

Successful businesses create capabilities that are best of breed and contribute to change for their customers,
wherever they are. He seconded Robert Reich's notion that the business world is all about being 24x7
globally integrated.

Michael Corbett, Chairman of IAOP declared that

expertise, productivity and innovation are the drivers of
economic success and the businesses that master them will
be the leaders. Outsourcing will be recognized as an enabler
for these changes, and managing change will be a key
success factor for businesses.

Michael Corbett at the summit

Knowledge Sharing Session
Business Catalyst International sponsored a 'Knowledge Sharing' session of the Australian Chapter of
International Association of Outsourcing Professionals (IAOP), With Guest Speaker Tony Henshaw VP and
General Manager, Global Outsourcing & Infrastructure Services UNISYS Australia Pty Ltd.

The content rich program and networking event was, attended by a range of customers and vendors of outsourcing
services. They included representatives of large Australian Corporations such as Qantas, Commonwealth Bank,
Telstra, Vodafone, Westpac, IBM, EDS, UNISYS, Info Systems and many others.

Chairmans Address
Zia Qureshi, Chief Executive, Business Catalyst International and
Chairman of the Australian Chapter of IAOP shared his thoughts on
the latest thinking.

His propositions were:

People are getting confused between what is a management

expectation gap as opposed to the value gap- these are
two different things and yes, they are both important.
Outsourcing in most cases has delivered results and
outcomes that were much better than the in-house functions.
Hence the incremental value. So the large deals can not be
described as failures.

As outsourcing is maturing as a profession/industry we are

building on lessons learned, innovative ideas, developing
/expanding capabilities of vendors, new sources of talent
and the profession is realigning itself to the changing world.
The emerging trends indicate that the outsourcing world is
being shaped by the only constant we have, change. In fact, Zia Qureshi addressing the IAOPs Australian
Chapter meeting Sharing the latest thinking
outsourcing has proven itself to be one of the most and trends from the World Outsourcing
significant key change enablers in the business world. Summit 2007

Chairmans Interaction with the Global & Local Corporations

Recently Zia Qureshi attended the Outsourcing World Summit, participated in research activities as a member of
the IAOP Global Research Committee and held various Australian Chapter meetings. This combined with the
Business Catalyst expertise in outsourcing, puts him in a unique position to share current developments in the field
and his insights that will benefit the Australian corporates.

One can outline a long list of benefits of outsourcing, but what really makes a difference and passes the so what
test is that outsourcing enables the executive team to focus on the core business, the things that really matter to
achieving success and getting ahead, or, as Professor Oren Harari puts it breaking from the pack.

In this world of a copycat economy, executives and managers really need to be on the ball and entirely focused on
customers, business strategy and competitors including the ones that may emerge from the left field.
Outsourcing is not a magical solution - Avoid Fantasy Land stuff

Outsourcing, just like any business initiative or project needs to be handled with great care, expertise and above
all, sound management and commercial principles. Its not a guaranteed or a magical solution that will give you
cost savings, better business outcomes and transfer risk to third party. This unrealistic approach has led to the
mixed results in achieving success and sometimes created expectations that could be best described as fantasy
land ideas.

The outsourcing industry has hit its axis at the line that separates those companies leading the way with successful
outsourcing contracts and those left struggling at the back of the pack, still cogitating about what went wrong.

IAOPs Research Survey

Research from IAOPs recent survey examined the reason behind the failed deals and revealed several disparities
between service providers and their clients, with each pointing their finger at the other.

The key findings from the survey were as follows:

Few companies are consistently generating value from outsourcing.

Providers are three times more optimistic in stating they generated value in outsource deals when compared to
customers.
Unrealistic expectations, no outsource strategy, and too many requirement changes were identified as some of
the main reasons why outsourcing relationships fail.
Customers place more emphasis on transaction and process, however, much more upfront work needs to be
done.
Providers are not doing enough to set clear expectations on the outsource relationships.
Advisors are under serving customers and providers in areas such as change management, and managing the
transitions. More focus should be placed with upfront strategy development and change management.

The corporations that have approached outsourcing from a real business world perspective, have done well by
focusing on a number of critical success factors outlined above to ensure business outcomes are achieved. It is not
surprising that the worlds most successful companies are continuing to leverage outsourcing and are making a
success of it.

Collaborative Agreement Between the Australian and Chinese Chapters

During the discussions in the Chairmen meeting in Orlando, it was agreed that the Australian and Chinese
chapters will work closely for mutual interests and ensuring the success of IAOP in Asia Pacific. Walter Fang,
Chairman of the Chinese Chapter, and Zia Qureshi, Chairman of the Australian Chapter, agreed to be part of each
others executive committees to formalize this relationship.
 Ensuring the Success of Your Outsourcing Chairmans Insights

1. Be clear on your strategy and rationale for outsourcing, understand what you are outsourcing,
why and what benefits are to be achieved- be realistic in your expectations.

2. Make sure the commercial deal is sound and it results in a win-win scenario. It is simple: you
get what you pay for. Ensure there is enough opportunity for the vendor to make a profit and
return on its efforts through a bonus scheme or results driven incentives.
3. People may not admit it, but most outsourcing disasters are driven by cheap deals where
nave management coerced the service providers to deliver Rolls Royce service at Holden
prices.

4. Do not outsource a problem without at least understanding whats involved in solving it. You
dont have to solve the problem fully before outsourcing. An outsource service provider may
well be better placed to help solve the problem but you need to have a clear understanding of
the problem including any skills, resources and investments that may need to be rectified. Only
then are you in a position to talk to the service provider. Do not hesitate to get other specialists
involved.

5. The trend has well and truly now shifted towards making smaller deals and breaking the overall
operations into chunks, using multiple suppliers if necessary.

6. Implement sound governance processes and a comprehensive management framework

with people who are experienced in outsourcing leadership and not contract management.

7. Lateral leadership skills are what make a successful relationship with service providers.
These skills cant be taught or handed down through management manuals. Take away
the buzzwords and very few understand this illusive skill, even less posses it.

8. See outsourcing as an extended web of evolving relationships rather than a set and forget
model. Ensure these relationships have a cultural fit with your organization and their longer
term objectives are aligned with yours.

9. If innovation and value creation are on the agenda, as opposed to acquisition of commodity
type services, make sure there are appropriate mechanisms and processes in place in your
organization to achieve this through your own work that leverages the service providers
capabilities and knowledge. No matter who your service provider is, innovation doesnt
happen automatically.

10. When developing a contract, take control and lead the legal team. The dynamics of rapidly
changing operations such as IT do not lend themselves to be written up as a detailed contract in
a traditional sense. It needs a creative approach that involves flexibility, a broad framework for
collaboration and working with vendors on the basis of business and operational plans that are
likely to change constantly.

11. An outsourced function is still your business, so lead and stay in control - participate,
facilitate, review and enable the service provider to deliver outstanding service in a win-win
scenario.
Tony Henshaw
Global Outsourcing & Infrastructure Services
VP and General Manager, UNISYS Australia Pty Ltd

Tony Henshaw has been in the centre of major outsourcing deals and
operations for over a decade in key executive roles in EDS, Telstra
and now UNISYS, Tony has experienced the pains and gains of making
outsourcing work and is driven by a personal drive for innovation and
focus on sustainability of outsourcing.

Renewing Outsourcing Contacts The Challenges Facing the C-

level executives Tony Henshaw, UNISYS

Tony Henshaw shared his insights on Renewing Outsourcing Contracts The Challenges Facing the C-level
executives. Tony started with the myths of contract renewal and their effects on business. Expressing his
thoughts on the success of Outsourcing he stressed that despite eye-catching headlines, there are many more
successes than failures.

Increasing customer, market and regulatory pressures are driving companies of all sizes to investigate business
models such as outsourcing, to remain competitive and financially viable.

In new outsourcing engagements, and particularly in renewals, these models are becoming transformational, rather
than just transactional. Some companies are now on their third and fourth contract renewals and as their
experience grows, so too do their expectations of how outsourcing can support their business goals.

Delegates from a large number of leading Australian Companies

The decisions to outsource, or to renew or extend, are now more complex.

Can I outsource more than just low-value transactional processes and if so,
which ones?
Do I outsource to a single provider or to several specialists? What are the
benefits and risks of keeping the work onshore versus sending it offshore?
What effect will this have on my customer satisfaction, brand value and
employee morale, as well as my bottom line?

We conducted some global research last year that clearly demonstrates that CIOs are ready to move into the next stage
of outsourcing. While cost savings are still the key driver, and many who still perceive infrastructure services as a
commodity, there are many more that are looking to outsourcing for enhanced business value and transformation.

Recent work from McKinsey and Company illuminates the paradox faced by CIOs today. The Urgent & Immediate
Versus the Strategic & Survival.

First, the modern CIO must keep the engine of the business running smoothly and efficiently from the email to the
finance system. Technology is mission critical. Of course, this is about scale and speed - increasingly, the reasons a
CIO chooses to focus on the advantages of outsourcing.

But also, the CIO must champion investments in innovation capabilities that enable new markets or create new
competitive advantages.

Our research shows both sides of this complex role. There is a broad spectrum of needs. The days of thinking of
outsourcing as being just about cost are over. We must evaluate its impact on risk, quality of service, ability to innovate
with new products and its contribution to the agility of the business to cope with rapidly changing market demands.

This slide shows the old way of thinking with myths intact; and the new with the myths overturned.
The myth of cost cutting is replaced with the opportunity of improved performance.
The myth of sending jobs overseas is replaced with the opportunity of the right skills in the right place at the right time.
Inflexibility is replaced with value.

The Myths Busted: Unlearn Outsourcing

The Old The New

Risk Opportunity
Less Control, less flexibility Best fit solutions
Cost cutting Performance
Outsourcing problems to vendors Creating partnership and relationships
Full or mega outsourcing The best of both worlds: in sourced & outsourced
Sending jobs overseas The right skills at the right place at the right cost
Inflated savings unrealised Continuous improvement
Inflexible contracts Value-based contracts
Preserve current Facilitate change and innovation

To conclude, Id like to make one final point. Everything Ive discussed can be thought of as unlearning outsourcing.
Unlearning outsourcing means attacking commonly-held misconceptions. It means dispelling myths and being secure
that outsourcing should not be a risk, and need not be a risk.
Outsourcing Standards and Certification Program
What is Certified Outsourcing Professional (COP)
The Certified Outsourcing Professional (COP) designation distinguishes
individuals as leaders in the field of outsourcing. It powerfully
demonstrates that they possess the experience and knowledge required to
design, implement, and manage outsourcing initiatives that have a high
probability of achieving an organizations intended outcomes.

This professional designation, which focuses on the management process

of outsourcing itself, is equally valuable to individuals working as
customers, providers, or advisors. It promotes an environment where all
of the parties to an outsourcing business relationship have a common and
shared professional knowledge, approach, and commitment to mutual
success.

To become a Certified Outsourcing Professional (COP) applicants must demonstrate their professional
capabilities through a combination of:

Comprehensive Work Experience in the field of outsourcing as demonstrated by their actual

accomplishments one or more projects for one or more organizations
Knowledge and Education through successful completion of the COP Master Class, by holding a relevant
post-graduate degree, and/or passing the COP Examination.

Applications are reviewed and scored by the Certification Committee. All applicants are encouraged to attend a
Certified Outsourcing Professional (COP) Preparation Class to accelerate their process toward certification.

Certified Outsourcing Professionals (COP) can

Organizations that work with Certified Outsourcing
command greater professional recognition and
Professionals (COP) can expect better, more
compensation. Studies in other fields have found
consistent results specifically because these
a 20%+ salary differential for certified
professionals have demonstrated against an
professionals and 79 percent of executives
independently developed set of industry-wide
recruiters believe that certified professionals are
standards their experience and knowledge.
better-qualified candidates.
Certified Outsourcing Professional (COP) Master Class
A Comprehensive Learning Experience for Improved Outsourcing Outcomes
The Certified Outsourcing Professional (COP) Master Class is an integral part of Certified Outsourcing Professional
(COP) Program. It provides outsourcing professionals whether they work as customers, providers, or advisors with
an intensive learning experience on the state-of-the-art end-to-end process for outsourcing success. Individuals who
complete the course will not only earn 75 points toward their COP designation but will immediately be able to improve
outsourcing outcomes at the organizations with which they work.

The class is organized with 4 teaching components core content, group discussions and activities, expert insight, and
applying the content and is designed to engage course participants and connect with three primary learning preferences:
Auditory, Visual, and Kinesthetic. The COP Master Class curriculum is comprised of the 10 standard categories, 49
specific standards, and 92 elements of the standards.

The COP Master Class Offers:

1) A comprehensive learning experience that prepares an individual to successfully lead most outsourcing initiatives

2) The opportunity to work with seasoned veterans to develop a customized

outsourcing project plan for an actual project

3) State-of-the-art insights into the latest industry and deal trends

4) Extensive networking opportunities with professionals from a wide-range

of industries and professional disciplines

5) 75 points toward achieving COP status

6) The opportunity to synthesize the latest management thinking on outsourcing into actionable project steps

7) Insights gained from hundreds of actual engagements at companies from all around the world

8) Comprehensive coverage of The Outsourcing Professional Body of Knowledge (OPBOK)

9) Step-by-step coverage of the Outsourcing Professional Standards

10) Expert guidance from faculty who are themselves COPs as well as invited expert practitioners currently working

in the field
The Outsourcing Standards Board (OSB)
Setting Industry-wide Standards for Excellence

Through their commitment to advancing outsourcings professional standards, IAOP members distinguish
themselves every day as preferred customers, providers, and advisors with whom to work.

Code of Ethics and Business Practice Standards for Outsourcing

Professionals

The Outsourcing Standards Board released the Code of Ethics and Business Practice Standards for
Outsourcing Professionals a critical first-step in its program to enhance the professionalism of the
individuals and organizations that work in the field of outsourcing.

By adopting this code and requiring agreement to it by all of its members, IAOPs Professional Members
can be counted on to:

1) Adhere to generally accepted business standards in all of their business dealings

2) Accurately communicate, as a customer, provider, or advisor, their and their organizations experience
and capabilities
3) Focus and evaluate their work based on measurable business outcomes achieved
4) Continuously enhance the profession and their professional skills through training and knowledge
sharing
5) Be advocates for outsourcing as a management practice and as an industry, and
6) Proactively identify and resolve ethical and business practice issues if they occur

Outsourcing Professional Standards

Key to ensuring high-quality outsourcing outcomes is constantly improving the capabilities of the business
and project leaders responsible for defining, implementing, and managing these highly-complex multi-
company business relationships.

In October 2006, the Outsourcing Standards Board completed work on version 6.0 of the Outsourcing
Professional Standards. These standards have been developed to ensure that individuals who receive the
Certified Outsourcing Professional (COP) designation possess the capabilities required to design,
implement, and manage outsourcing
initiatives with a high probability of achieving the organizations intended outcomes.

The standards are just one part of an integrated program to improve outsourcing outcomes. They are based
on the Outsourcing Professional Body of Knowledge (OPBOK) and form the basis for the Certified
Outsourcing Professional Master Class.
IAOP Membership
Join IAOP and Be Part of the Revolution!

Membership in IAOP provides access to an extensive

array of services, and just as importantly distinguishes
organizations and professionals as leaders in the field
of outsourcing. IAOP membership demonstrates a
commitment to innovative thinking, continuous
performance improvement, and to the sustaining
development of outsourcing as both an industry and as
a profession.

Customer Corporate Membership

Organizations that are currently outsourcing or are

considering one or more outsourcing initiatives should
become Customer Corporate Members of IAOP. This
membership provides organization-wide access to the
associations research, training, certification, and
networking programs - all designed to help companies
achieve better business results through outsourcing.

Provider/Advisor Corporate Membership

Outsourcing service providers and advisory firms should join IAOP as Provider/Advisor Corporate
Members. This membership provides the same organization-wide access to IAOPs research,
training, certification, and networking programs as Customer Corporate Membership, but also
includes member-only sponsorship opportunities that serve the marketing and business development
needs of these companies.

Professional Membership

Professional Membership is available to individuals either as part of their companys corporate

membership or on an individual basis. This membership serves the needs of practitioners working in
the field of outsourcing whether as customers, providers, or advisors. In addition, it provides these
professionals with direct, personal access to association services.
In order to ensure a free-flowing exchange of information among all of its members, IAOP maintains
a strict non-solicitation policy.

Student Membership

Student Membership is available to all full and part-time students actively enrolled in a college or
university. Student Membership provides direct access to IAOP services and includes full use of the
associations online knowledge center, Firmbuilder.com.
Membership in IAOP is open to organizations and individuals globally and includes a wide-array of
member services as well as participation in one or more chapters organized by geography, industry, or
special interest
Knowledge Sharing and Networking Sessions
 Wednesday 9th April 2008 Sydney

Featuring Guest Speaker:

Virginia Walker, GM Management Services, EIT Operations
Commonwealth Bank of Australia
- Wednesday 9 April 2008, 5-7pm
- Tattersalls Club, 181 Elizabeth Street, Sydney

 Wednesday 28th May 2008 Melbourne

 Thursday 29th May 2008 Canberra

 Wednesday 4th June 2008 Sydney

 Wednesday 27th August 2008 Melbourne

 Wednesday 3rd September 2008 Sydney

 IAOP Asia Pacific Summit 2009 Sydney

Topics for the above sessions to be confirmed

Khalil Allahwala, Assistant Chairman IAOP Australia thanking the Chief Guest Tony Henshaw