Partnerships Pave The Way To More Social Enterprises
1. 20 February 2011
O ver the last few years, we have
observed that companies increasingly
organise asset management activities
in cooperation with partners and suppliers. This
means companies are not only keen to focus on
Mathijs Koper and Stephen Kronenburg
from Kirkman Company management
consultancy set out a framework
for making conscious sourcing
their core competencies, but also want to utilise decisions in asset management,
the core competencies of other companies. which addresses the three Ps:
Asset management organisations have
started to move beyond traditional client-
people, planet and profit.
supplier relationships and simply outsourcing
generic activities to a supplier. A growing
number are now examining the possibility
of cooperating on, or handing over, tactical
– and, in some cases, even core – activities.
The broader trend here is that companies are
making more conscious decisions about what to
Make, Buy or Ally.
Aligning the sourcing strategy
To be able to define the optimal sourcing
strategy for an asset management organisation,
we must first go back to the corporate strategy
and make sure that the sourcing strategy we
are developing is in line with it. Building on this
alignment, we can then consider more in-depth
aspects of asset management sourcing using
the Asset Life Cycle Sourcing model (Figure
Partnerships
1). This model reflects the cradle-to-grave
responsibility for managing a physical asset’s
useful life. We’ve identified four main phases in
the Asset Life Cycle:
n Initiate & Plan
pave the way
n Design & Construct
n Operate & Maintain
n Dispose & Recycle.
For all phases of the Asset Life Cycle, we advise
asset managers to ask themselves what
to “Make, Buy or Ally” and run through the agreements and objectives with your partners. then guide you through the decision-making
seven-step approach presented in the sourcing You can even integrate these goals into your process, using the seven-step sourcing scan, to
scan (Figure 1). The 3 Ps – people, planet and acquisition criteria. To make a conscious define the most optimal sourcing option for the
profit – are shown in the middle of the figure, decision, companies should use the step-by- relevant responsibility:
which reflects our observation that, in asset
management, companies are increasingly aware
of their corporate social responsibility (CSR), and
step approach highlighted in Figure 2.
Making a conscious and responsible
1. Define the current sourcing situation.
A useful insight into the current sourcing
situation means focusing on processes,
have goals set for sustainable and cost-efficient decision resources, responsibilities, quality indicators and
asset management. In selecting the optimal sourcing option, we value to company goals.
These CSR goals should also be properly
taken into account when making a sourcing
decision. In case certain activities are handed
suggest a holistic approach in which we split the
asset management organisation into different
functions and its typical responsibilities.
2. Carry out a situational analysis based on
the current sourcing situation. Take into
account the strategic value and complexity of
over to a partner or are hosted in some kind Consider, for example, the different utilities of the responsibility, as well as implications for
of alliance, the people and planet objectives a company, divided by ownership, operations competitive advantage and relations with (core)
of a company should be translated into the and maintenance of the concerning assets. We processes. While doing this, continuously reflect
2. February 2011 21
on strategic objectives, goals and the stipulated
sourcing strategy.
3. Perform a market roaming in parallel
with the situational analysis. Investigate
relevant developments outside the
organization, as well as innovations, trends and
possible threats. Don’t focus exclusively
on competition; also look at companies
operating in other markets that may be
successful examples.
4. Using the above results, define the
relevant and feasible sourcing options
(see Figure 1 for a basic set of options). If, for
example, the responsibility appears not to
be of strategic value, is not that interwoven
with other processes and suppliers operate
in a competitive market, “buy” options can be
further investigated. The figure shows that the
“Make, Buy or Ally” question isn’t the only one
that has to be answered – there are numerous
sourcing options to be considered within these
three categories.
5. These options are the basis for a detailed
risk and financial analysis, resulting in a
both qualitative and quantitative value case, as
well as a maturity assessment on the current
situation. In some cases, it can be wise to first
increase the maturity level before transition to,
for example, an external partner.
6. The outcome of the analysis in step five
provides additional insight into which
sourcing options are the most relevant and
Figure 1
making with respect to people, planet and
not least profit. By making these decisions,
objectives. It’s also important to define possible
sourcing options for different phases of the asset
feasible. Using this foundation, choose the most companies can involve the core competencies of life cycle.
optimal sourcing option. other parties for their operations. Furthermore, to thrive in the business
7. In case the chosen sourcing option differs
from the current way of sourcing, the next
steps are to set up a transition plan and start
Conclusion: To Make, Buy or Ally?
An increasing number of asset management
environment of today and tomorrow, we
advise companies to include corporate social
responsibility in the decision-making process by
organisational change. organisations are venturing beyond traditional adding the impact of people, planet and profit
The approach we have described is the boundaries of the strategic scope of sourcing to the value case. Having considered all relevant
result of best practices and past experience. The activities. In order to succeed, the sourcing sourcing options, a conscious decision can then
sourcing scan is a tool to define a deliberate strategy should be aligned with – or, even better, be made that contributes to a world with more
sourcing strategy based on conscious decision contribute to – the companies’ ambitions and social enterprises.
Authors’ biographies
Mathijs Koper MSc is senior consultant and
Practice Leader Asset Management. Stephen
Kronenburg MSc is consultant and part of the Asset
Management practice at Kirkman Company, an
independent management consultancy firm that
specialises in Strategic Sourcing: helping organisa-
tions to make the right choice on what to make, buy
or ally. The authors specialise in Asset Manage-
ment Sourcing. For more information please visit
www.kirkmancompany.com or email your enquiry
to info@kirkmancompany.com
Figure 2