One of the scariest things about the complexities of the business world in 2018 and beyond is that we can all easily lose our perspectives on big-picture issues such as making the right business decisions to support the execution of your strategy. During the last decade, I have noticed the significant increase in the number of companies outsourcing critical functions such as Manufacturing, Supply Chain Management, and Human Capital Management. Most of the time, the business logic suggests that outsourcing is more efficient, yields a higher quality product, and lets a company focus on its core capabilities rather than capabilities that it’s not very good at. We only have to look as far as Apple – perhaps the most successful company in the history of business – to see that they focus what they are great at – technology design – and outsource all of their manufacturing to a company called Foxconn. Foxconn delivers high quality, world-class manufacturing for Apple and the costs are much better than Apple could deliver themselves. The added benefit is that Apple doesn’t have to bear any of the risks or costs of all the manufacturing equipment and facilities which would sit on their Balance Sheet as expensive, depreciating assets.
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While every industry has undergone significant changes over the past decade, the pharmaceutical industry has experienced as much if not more disruptive change than any other. Changes in geopolitical dynamics, clinical technologies, quantum physics, demographics, life style, sustainability, competition, and changes in the way patients receive and pay for their medications have impacted every pharmaceutical company on the planet.
Within these pharmaceutical companies, every function – including Sales, R&D, Manufacturing, Supply Chain, and Finance have been forced to change and adapt to this new and evolving world. But no function within a company has changed more than pharmaceutical marketing.
Every business professional on the planet is faced with the daily temptation of relying on technology to get us to where we need to go, to engage in commerce, to market our products and services, and of course to communicate with others through texting, email, and phone calls.
This past Friday, I had the privilege of watching my son’s Advertising class from George Washington University present a campaign pitch to a group of judges as part of the National Student Advertising Competition in New York City. His GW team put in thousands of hours of work and presented one of eight amazing presentations that would advance the winner to the next round of the competition. The GWU team presentation was fantastic and their ideas which included an integrated strategy leveraging many different digital techniques was provocative and thought provoking. Unfortunately, they came up just a little short – 4th place – but as is the case with many learning assignments, the process and experience will stay with these students for the rest of their lives.
While the concept of “Outsourcing” for things such as payroll, benefits, and telemarketing has been around for decades, only recently has it become mainstream for companies like Apple to outsource their entire manufacturing process so they are able to focus on their core capabilities, rather than more difficult and resource-draining things they can leverage to other organizations that can simply do it better and cheaper. Great companies like ADP have unlocked the holy grail of business process outsourcing by being able to deliver products and services that are both better and less expensive than can be done by their clients using their own inadequate resources. ADP has created a great culture through strong leadership and has done it with a laser focus and strong expertise in all things Human Capital Management related that adds tremendous value to their clients.
In the Digital Age where the continued investment of major capital has been focused on scalability, volume, and growth, the concept of customer service has become a second-tier element of delivering the value proposition to customers.
During the past year, our team of Business Acumen learning facilitators who have been delivering award-winning business acumen learning solutions to our large global clients have also taken notice of how perplexed participants have been when thinking and applying concepts of customer service when executing decisions in our business simulation workshops. As recently as last week, I had a conversation with a team of mid-level leaders about their questions on customer service and one of them half-kiddingly asked me if customer service actually still impacted the simulation as a demand driver and if they should even bother investing any money into it.
