Elevating Strategic Sourcing Capabilities -...

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Implementing an Outsourcing Talent Management Program at Boeing Elevating Strategic Sourcing Capabilities: Boeing Lawrence Kane Sr. Leader, ITI Strategy & Sourcing www.sig.org/eval

Transcript of Elevating Strategic Sourcing Capabilities -...

Page 1: Elevating Strategic Sourcing Capabilities - SIGsig.org/docs2/S26_Elevating_Strategic_Sourcing_Capabilities... · Implementing an Outsourcing Talent Management Program at Boeing Elevating

Implementing an Outsourcing Talent

Management Program at Boeing

Elevating Strategic Sourcing

Capabilities:

Boeing

Lawrence KaneSr. Leader, ITI Strategy & Sourcing

www.sig.org/eval

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Copyright © 2015 Boeing. All rights reserved.

Elevating Strategic Sourcing Capabilities

Lawrence Kane, COP-GOVSIG Global Executive SummitAmelia Island, FLMarch 10 – 12, 2015

–Implementing an outsourcing talent management program at Boeing

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Copyright © 2015 Boeing. All rights reserved.

Engineering, Operations & Technology | Information Technology

About Boeing…

The world’s leading aerospace company

Provides products and support services to

customers in 150 countries

Designs and manufactures commercial and

military aircraft, rotorcraft, electronic and

defense systems, missiles, satellites,

launch vehicles, and advanced information

and communication systems

Headquartered in Chicago, Boeing employs

more than 170,000 people across the

United States and in 70 countries

More than 140,000 of our people hold college

degrees, including nearly 35,000 advanced

degrees, in virtually every business and technical

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“Our job, regardless of organization, is to make sure we’re spending our money where it moves the needle because we only have so much.” — Kevin Schemm, vice

president of Finance & Strategy and chief financial officer, Commercial Airplanes

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Background

Boeing/McDonnell Douglas merger, 1997

– Heritage Boeing insourced all IT

– Heritage McDonnell Douglas outsourced all IT

We needed a sourcing strategy

Worked with Gartner to develop and implement industry leading strategic sourcing practices and methods

– Multisourcing… one of the first to implement

– Benchmarking… actionable clause; retroactive adjustments

– Gated evaluation process… acquire the right supplier

– Red team reviews… assure first time quality

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Current Environment

IT infrastructure is ~ 75% outsourced

IT applications are ~ 50% outsourced

Needed products and services cannot be delivered without partnering with suppliers

Strategic sourcing and vendor management disciplines are critical to overseeing the process

– Outsource/retain strategy

– RFx development

– Bidder evaluation and supplier selection

– Governance

– Etc…

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The Challenge We Discovered

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Robust tools and processes are not enough… it takes an experienced workforce

Personnel changes, attrition, and reorganizations have led to knowledge/skill loss

Escapes have caused value leakage

– Customer impacting transitions

– Unanticipated costs

– Excessive contract changes

– Need to engage consultants to shore up internal capabilities

– Etc…

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Discuss…

People

Process

Technology

… how mature is your sourcing organization?

… common process or compartmentalized?

… centralized vs. decentralized decision-making?

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Target Environment

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Help new sourcing and supplier management employees become productive as expeditiously as possible

– Define a common language, principles, and leading processes

– Assure consistent implementation across all organizations

Continuously adopt industry leading practices (that are applicable to Boeing)

– Leverage industry proven practices

– Lay the foundation to strengthen outsourcing processes

Make the implementation of the sourcing process better, faster, and cheaper with assurance (achievingexpected outcomes/results)

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Implemented Solution

Licensed rights to use an industry standard training program

Trained and certified 8 Boeing SMEs to teach the materials internally

– Candidates needed sufficient experience to earn industry accreditation

– Highly effective communication and instruction skills

– Commitment to teach at least two classes per year

Implemented a three-year cascade training program to educate stakeholders

– Hold ~ 8 classes per year across three geographies

– Optimal class size is ~ 20 attendees

– “Mix n’ match” organizations to facilitate cross-functional networking

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Class Curriculum

Standardized materials that cover every aspect of the sourcing lifecycle

– In-depth training

– Industry leading practices

– Recognized worldwide by suppliers, consultants, and buyers alike

– Precursor for accreditation

Boeing customization:

– Boeing executive expectations

– 4 days, including additional governance focus

– Links to policies and procedures

– Tailored case study that assures relevancy to Boeing

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Discuss…

Training plans

Sources of knowledge

… have you licensed a formal training program?

… other sources of knowledge?

… what changes have you institutionalized?

… what benefits have you achieved?

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Value Proposition

Year 0 Year 1 Year 2 Year 3

Internal Training Public Training

Cost

“It means that you are someone who will be continuously in touch with emerging industry best practices and can successfully apply them to your organization.” – Wayne Heiler, Pfizer

“It is as much based on real lessons learned from the application of the standards as it is on best in class or proven approaches to the work.” –Catherine Giles, Liberty Mutual

“It means that I can speak a common outsourcing language, and drive successful outsourcing solutions in my workplace.” – Teresa Harris, GE

“The curriculum provides for a common lexicon for our industry and enables more effective execution across the outsourcing value chain.” – Eugene Kublanov, KPMG

Value

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For a large rollout, internal training costs

significantly less than sending employees

to public classes

Example: 90 trainees

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Risk Management

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Lik

elih

ood

5

4

3

2

1

1 2 3 4 5

Consequence

Risks

1) Value leakage in existing and new supplier

relationships

2) Training investment outweighs value loss

3) Making investment doesn’t guarantee

results and treated as a “passing fad”

4) Viewed as invented by a small group

Mitigations

1) License industry standard program and train

affected personnel

2) Communicate success stories… cost of

quality = cost of non-conformance + cost of

conformance

3) Management commitment and relentless

discipline

4) Following industry proven methods; trainers

industry certified

1

2

3

4

124 3

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Assuring Momentum

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Active executive sponsorship

Continuous commitment

Accountability for results

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Rollout Plan

Class schedules in 2014

– Puget Sound Nov (“beta test” class)

Plan of class schedules by site for 2015, 2016

Class Agenda

– ½ day Monday

– Full day Tuesday – Thursday

– ½ day Friday

Class size ~ 20 students

– Assure diversity of background of attendees for optimal experience| 16

1Q 2Q 3Q 4Q

Charleston Feb Oct

Puget Sound Mar Jun Aug

St. Louis Apr Sep Nov

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Discuss…

Lessons learned

… how do you assure continuous improvement?

… how do you energize employees to seek out and adopt new knowledge?

… how do you gain support for needed change?

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Lessons Learned

Think big

Stakeholder analysis

–Executive sponsorship

–Employee engagement

Implement the easy “ah-ha’s” …and institutionalize

–Don’t try to boil the ocean… continuous improvement not revolutionary change

Exercise change management discipline

–Help stakeholders overcome fear of change

–WIFM… career growth and certification opportunities

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About the Presenter…

Lawrence Kane is a Certified Outsourcing Professional in

Governance (COP-GOV) and a Boeing Designated Expert (BDE)

in IT Sourcing. A senior leader at Boeing, he established the

sourcing office, hired and developed a high-performance team,

and saved more than $2.1B by architecting the IT infrastructure

sourcing strategy, designing the proposal evaluation process,

executing RFPs, negotiating with providers and benchmarking

the effectiveness of resultant deals. He is also the best-selling

author of eleven books, including three USA Book News Best

Books Award finalists, an eLit Book Awards Bronze prize, a Next

Generation Indie Book Awards finalist, and two ForeWord

Magazine Book of the Year Award finalists.

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Thank you!

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Lawrence Kane

Senior Leader

ITI Strategy & Sourcing

The Boeing Company

Phone: (425) 865-7516

E-Mail: [email protected]

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Session #26

Elevating Strategic Sourcing Capabilities: Implementing an

Outsourcing Talent Management Program at Boeing

Lawrence Kane

Boeing(425) 865-7516

[email protected]

Speaker:

www.sig.org/eval

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