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Posted by Paul Warren on November 23, 2011
Following a successful event in Miami, I am now looking forward to Forrester’s Sourcing & Vendor Management (SVM) Forum EMEA in the UK next week (Herts, Nov 30-Dec 1). An invaluable component of our forums are always the industry expert presentations, and so I’m excited to be joined on stage on day one by Maureen McKinney, Director, Strategic Partner Management, Nike. Maureen will be speaking about how to drive more value from vendor relationships and deliver real value to the business. Ian Dalby, Director Of ICT, UK Ministry Of Justice, will address how different IT and SVM organizations are responding to SVM’s challenges related to connecting demand and supply capabilities within an organization. On day two, Olivier Lefaivre, Head of IT Sourcing and Vendor Management, AXA Group Information Systems, will explain how IT Sourcing and Vendor Management accelerated business transformation at AXA. Our second industry speaker on day two is Jim Nanton, Senior Vice President & CIO, Hanesbrands.
In preparation for the EMEA Forum, I spoke to Jim who, in his role of SVP/CIO at global apparel company Hanesbrands, is faced with a unique set of challenges, risks, and opportunities involved in deploying managed and contract services across multiple countries and cultures. Jim told me about how he believes that vendor management is a core competence in a "plan, build, run" organizational structure, and underlines the importance of selecting the right partners and the practices for managing effective relationships.
Below you can find a summary of my conversation with Jim in which he provides insight into what he will be sharing with the audience during his keynote:
Paul Warren: What role does Sourcing and Vendor Management play in your IT strategy and that of Hanesbrands?
Jim Nanton: SVM is central to our IT strategy, which is closely aligned with our business strategy. In order to support rapid business change and international expansion of the firm, we have had to rely on the specialized skills and services of partners to complement our internal IT staff. We have also consciously focused on certain skills and roles that we prefer to retain and identified those that we have chosen to outsource. As our engagement with external partners has increased, we have found it essential to develop a formal vendor management discipline.
Paul Warren: Hanesbrands has recently expanded its commercial and supply chain operations into emerging markets such as China. How has your IT organization responded to the changing needs that have come from this expansion?
Jim Nanton: Structurally, we have responded by establishing two levels of responsibility. IT strategy, policies, and standards are set at headquarters; regional and in-country IT leadership is responsible for execution but is empowered to adapt the broad strategic objectives to local circumstances. Focus, therefore, is on outcomes that benefit the business rather than direct control from the center. This structure assumes strong local leadership, which can be difficult to recruit and retain in some markets.
Jim Nanton: Frequent changes in business plans have made IT agility as well as communication and collaboration with functions like the supply chain imperative. To this end, we have had success in assigning business relationship managers at a country or regional level. This individual is accountable for all facets of the IT relationship with the business leader for that location. He or she, behind the scenes, coordinates the delivery of IT services and is able to tap into resources, both internal and external, throughout the global IT organization.
Paul Warren: How did you select which skills to retain, which services to outsource, and where they should be located?
Jim Nanton: Increasingly we have emphasized those roles that directly intersect with business users and require deep knowledge of our company, customers, and industry. We believe that collaboratively understanding needs and identifying opportunities for the application of technology create the greatest value for our business. Design of solution architectures and mastery of component technologies along with vendor management skill remain essential. Also important but readily available from commoditized global sources are narrower technical skills to develop, support, and maintain applications, and to deliver or administer infrastructure services. As a global IT organization, we can take advantage of talent pools regardless of location and assemble virtual teams of internal and external members.
Paul Warren: What are some of the unique challenges, risks, and opportunities in deploying managed and contract services across multiple countries and cultures?
Jim Nanton: As you might imagine, the normal challenges of managing complex technology projects are magnified when the coordination of cross-national team members with multiple native languages in various time zones are involved. This is further compounded by the participation of external contract resources. However, these organizational and communications challenges can be offset by the benefits of local perspectives and the specialized expertise and experience that the team can bring to bear.
Paul Warren: How would you define a true Partner as it relates to your vendor relationships?
Jim Nanton: True partners are rare because of the inherent and conflicting interests of vendors and customers. The vendor seeks to increase revenue and margin, and we as customers demand lower costs and better service. However, it is possible to develop over time, strong relationships with key vendors which can evolve into partnership. This involves give and take, mutual trust, and shared risks. The vendor is willing to invest in the relationship in the expectation of longer term benefits. These include expanded opportunity, more predictable income streams, and insight into customer strategy and plans. For us as customers, a stable relationship results in less disruption from switching and greater productivity and reliability as the vendor becomes more familiar with our environment.
If you are interested in joining us at Forrester’s Sourcing & Vendor Management Forum EMEA 2011, please find the agenda and all further details here.
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