Value

Value has multiple meanings in management thinking, but in its most general terms informs the consumer – customer, employees, shareholders – of the benefit to them. Outsourcing is at its most basic level, about creating a valuable relationship for both parties – the consumer and provider of services. At OMNiON, we go beyond such a transactional value to the sustainable benefit of our activities for the larger societies in which we live.

While our founder, M.C. Abraham, started the first major outsourcing service in Bangalore, India, in the early 1970s, in reality, if you have an outside firm do things for your company, it could be considered outsourced. Since outsourcing should be a designed response by a service provider to a defined requirement by the buyer, outsourcing should not be a commodity service, where price is the key delineator to measure a firm.

There has been much written about outsourcing & its value over the years. What is outsourced, why it is outsourced, what is expected and how it is achieved can be significant. These differences create the various levels of outsourcing and the need for a value proposition. Real supply chain management outsourcing is dramatic and creative. It is used to-

• drive change – as an agent of change, create new or when an organization is very resistant to change
• gain significant short term benefits
• utilize and blend different service providers into a new capability to manage complex supply chains, with both international and domestic requirements
• transform a strategic shift or paradigm

WHAT IS OUR VALUE PROPOSITION?

The concept of a value proposition is not unique to outsourcing. It is something that all service providers including internal departments should have to distinguish them and to draw the attention of potential customers. Value proposition is not value-added. Value-added is essentially giving something away for nothing, often some kind of technology application. Nor does it involve a creep effect where some buyers attempt to get something.

What is often missing in discussions of outsourcing is the value proposition that the provider is offering. The value proposition is what sets a service apart from others. “Reducing costs by 10%” is not a value proposition, or, at best, a weak one. Reducing a commodity service cost is not unique from the competition and puts the service provider back into the realm of being a commodity service provider, back into being what the provider is trying to escape from with the company he is part of. “Improving lead-times by 30%” or “increasing range of services” are value propositions and OMNiON specializes in providing such a value proposition to our customers. Our scope and complexity goes beyond a function and crosses the organization just like the process that supply chain management should be. Our value propositions create the opportunity to move up the levels of outsourcing toward strategic