Future of Sourcing - Customer Satisfaction https://futureofsourcing.com/tags/customer-satisfaction en A Healthy Obsession with Alex Yakubovich https://futureofsourcing.com/a-healthy-obsession-with-alex-yakubovich <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/Podcast_Sourcing_Industry%20Landscape_13.png"><a href="https://futureofsourcing.com/sites/default/files/articles/Podcast_Sourcing_Industry%20Landscape_13.png" title="A Healthy Obsession with Alex Yakubovich" class="colorbox" rel="gallery-node-1493-zi72FIMYQQE"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Podcast_Sourcing_Industry%20Landscape_13.png?itok=qe1n0lLb" width="624" height="325" alt="" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><strong>Are you ready for the next wave of disruption in procurement? Join Sourcing Industry Group CEO and President, Dawn Tiura, for conversations on The Sourcing Industry Landscape with innovators who embrace technology to improve, influence and inspire procurement professionals.&nbsp;</strong></p> <p><strong>Check out&nbsp;<a href="https://sig.org/sourcing-industry-landscape?__hstc=215510152.344406f4865c40604cf6029be7e958e0.1543422516683.1560384261223.1560386358147.373&amp;__hssc=215510152.2.1560386358147&amp;__hsfp=726271731" target="_blank">all episodes of The Sourcing Industry Landscape</a>&nbsp;to date and subscribe to the podcast so you never miss an episode. You can listen to the podcast in iTunes, through your favorite podcast app or&nbsp;<a href="https://sig.org/sourcing-industry-landscape?__hstc=215510152.344406f4865c40604cf6029be7e958e0.1543422516683.1560384261223.1560386358147.373&amp;__hssc=215510152.2.1560386358147&amp;__hsfp=726271731" target="_blank">on our website</a>.</strong></p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p><em><strong>In&nbsp;<a href="https://sig.org/healthy-obsession-w-alex-yakubovich" target="_blank">this episode of the Sourcing Industry Landscape</a>, Dawn Tiura interviews Alex Yakubovich. Alex Yakubovich had a non-traditional path into the world of sourcing and procurement. In college, what started out as a project to earn extra cash turned into a profitable e-commerce venture that he and his co-founder later sold to Living Social.</strong></em></p> <p><span style="font-size: 13.008px;">Dawn Tiura:</span><span style="font-size: 13.008px; white-space: pre;"> </span><span style="font-size: 13.008px;">Hi, everybody. This is Dawn Tiura, President and CEO of Sourcing Industry Group. With me today is Alex Yakubovich. He is the CEO of Scout RFP, and he has the most interesting journey as to how he got to where he is today, a fabulous company. We really enjoyed our interaction with them, and it&#39;s just going to be an exciting story to hear how quickly this young man rose to such prominence in our industry.</span></p> <p><span style="font-size: 13.008px;">Alex Yakubovich:</span><span style="font-size: 13.008px; white-space: pre;"> </span><span style="font-size: 13.008px;">Hi, Dawn. Thanks for having me on the program.</span></p> <div><span style="font-size: 13.008px;">Dawn Tiura:</span><span style="font-size: 13.008px; white-space: pre;"> </span><span style="font-size: 13.008px;">Yeah, I&#39;m real excited. It&#39;s funny, when you and I were talking, I said, &quot;So tell me a little bit about you,&quot; and I printed some background information&mdash;you have one of the shortest journeys to success I have ever seen. You are just an incredible entrepreneur. I understand you started your first company, ONOSYS Online Ordering when you were still in college. Can you tell me a little bit about that?</span></div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>Sure. My co-founder, Stan Garber, and I, we started Onosys. We were college students, and for basically pizza and beer money, we started a web development company, and we went and, effectively, we started to build websites for small businesses all throughout Cleveland, literally going door-to-door. We were 18, 19 at the time, and then one of our customers was a local pizza chain, and we really wanted to get into software as a service and really focus on one software suite. So pizza being near and dear to our heart, one of our customers was a local pizza chain, they asked us to build their online ordering system into their website, and we thought that was a great idea. We loved ordering online. We knew in the future people weren&#39;t going to be calling in to order their pizza, but this is actually before the iPhone and before online ordering was everywhere as it is now.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>Yeah, we built that system for them. We kept the rights to it, then we started selling it to other restaurant chains. Before long, we were in Panera; Papa John&#39;s; Outback; Carrabba&#39;s. We were in over 50 chains throughout the world, thousands of locations, processing hundreds of millions of dollars in orders. It was a fun journey. It taught us a lot about enterprise sales, because we were selling it to these large publicly-traded restaurant chains, and it taught us a lot about enterprise software.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>It also taught us a lot about making software that was really easy to use. Configuring and ordering a pizza and then making sure that everything gets through to the restaurant, it&#39;s a very UI intensive process, and you have to make sure that it&#39;s super simple to use. It forced us to be very disciplined with that, and that, of course, serves us well today.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>That&#39;s amazing. So, you&#39;re right. Because, back then, we weren&#39;t ordering everything online like we do today, so you were very visionary, and it&#39;s great that you were able to convince companies in the early stages that this was going to be a trend at some point.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>Yeah, well, in the very early stages, we had to convince them, so we had the more visionary chain restaurants that had the budget and wanted to be ahead of the curve. Once the iPhone came out, and then&mdash;I think, actually, after a certain point, and restaurant chains had it, that it just became a disadvantage not to have it, and then business really took off&mdash;but it was a great experience. That company was cashflow positive profitable, growing really quickly. We were not looking to sell, but LivingSocial approached us, and they were one of the fastest growing companies at the time. They made us a very compelling offer to be acquired. It was a great experience and a great springboard to Scout, as well.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>That&#39;s amazing. So, in college, you started a company that then you ran for nine years, then get acquired by LivingSocial. That is a heck of a success story. Can you tell me, what were you studying in college? Was it business, or computers, or both&mdash;or programming?</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>Engineering for me, and it was business for Stan, and then we had a third co-founder as well who was in the computer science program.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>Wow, O.K. Now you&#39;ve gone on to be very successful in business, and after LivingSocial, you then completely and totally switched industries. Obviously, doing RFPs is&mdash;I would never say it&#39;s like taking an order in any way, shape, or form. Now you&#39;re one of the top selling companies in the sourcing industry. Can you tell me, how did you make that huge leap? Because there is no logical string for me.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>Happy to. What we experienced while selling these large restaurant chains is, basically, if you&#39;re selling into publicly-traded companies and to their IT departments, their marketing departments, you&#39;re going through the RFP process, and so we built that whole company answering RFPs. Then once we were acquired by LivingSocial, we actually had to put requests for proposals out, because then we were part of a very large company. So when we were going out to buy things over a certain threshold, we had to actually do it the proper way.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>We used to say that we hated RFPs, just like most people when they receive an RFP, nobody loves the RFP process, but we used to say that we really appreciated the actual process of it. We understood what the reasoning for it was, and every once in a while you had a really well-run one. The only thing that was kind of confusing to us was that we had, in all of our years of running ONOSYS and answering all these RFPs, and we answered hundreds of requests for proposals, we&#39;d never seen one come through a system, and it was always manual, so we&#39;d always get this big Excel spreadsheet.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>So we thought that was interesting, and so us having only just the industry experience of being in the restaurant industry, we thought maybe it was just something in that vertical, they just didn&#39;t have tools or something. We&#39;re product guys, Dawn, so our first instinct is to roll up our sleeves and go out and build something, but we didn&#39;t want to do that. We really wanted to learn about the industry, and this is a big part of our DNA today, so we said we&#39;re not going to build anything until we go out and we talk to at least 200 people in procurement.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>So 200 procurement experts, and we went out and did this big study. We actually spoke to close to 300 procurement experts before we built anything. And we talked to a lot of the expert companies out there, and certainly talked to like Forrester and Gartner and things like that. Basically what we learned, the big benchmark was the adoption rate for the platforms that existed for sourcing was right around 10%. We saw that both in the studies and the data that we saw, and we also saw that in the study when we went out and talked to individuals who were really just procurement experts and had been doing it for a long time.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>That just surprised us, and then we got to see some of the legacy software that&#39;s out there today. The word we kept hearing was &quot;clunky&quot; and hard to use. So what we understood is that there&#39;s no shortage of software platforms out there that do sourcing, and there&#39;s no shortage of functionality and features out there. The problem is, the adoption rate is very low, because the usability of the platforms are low.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>So we took what we had learned from building e-commerce systems and great enterprise systems, and we built a really simple, easy-to-use RFP platform that helped to run, and our whole philosophy at the very beginning was, &ldquo;no, you shouldn&#39;t need a training manual, you shouldn&#39;t need training, you should be able to go in and start using it right away.&rdquo;&nbsp; And that served us really well, our whole RFP platform, it&#39;s three pages long.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>That&#39;s amazing.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>We&#39;ve extended that to the rest of our platform, as well. Everything that we build, our very first value here at Scout is obsess over the customer. So everything we build, we start with the customer in mind, and what is their experience going to be like? How can we make it easier? How can we make it straightforward? How can we give them a linear path? The big inspiration we had for that was Intuit and TurboTax. We said, &quot;Look. If Intuit can take the U.S. tax code and make it so that anybody can do their taxes online, we should be able to make it so that people can run their RFPs without hassle.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>That&#39;s a great comparison. I will be honest with you, I&#39;ve used a lot of the different tools, but when we were running an RFP from SIG, Scout stepped up and said, &quot;Hey, you can use our tool for free.&quot; Immediately, we picked it up and we were able to start just running with it. We didn&#39;t have to crawl, walk, and then run. We were able to get it up and running and just go with it. It was as intuitive as you said. I love having that passion about the customers&#39; experience first and foremost. I think that says a lot about the company and why you&#39;ve been successful.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>Have you taken Scout beyond the RFP? Tell me about how it&#39;s growing and shifting and developing. What do you see next?</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>Yeah, for sure. We have. We&#39;ve extended it to a full platform at this point. The way that we did that is, basically, we started with our first value, and we went back to our customer. So, we built the RFP platform, and then very quickly our customers told us, &quot;Hey, we&#39;d love to have reverse autcions in here,&quot; so we built that in very quickly after that. Then the next thing our customers told us is, basically, at that point, we had a lot of requests for, &quot;Hey, can you help us with contracts? Can you help us with planning? Can you help us with supply and management?&quot;</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>At this point we have 150 customers, and we get feedback from every single one of them, but one of the biggest things that was lacking is, everybody was doing their...we understood that sourcing started really with planning, and everybody was doing planning similarly but with different tools, which was very similar to what we found when we went and did the study for ER EFX. So we built a platform called Pipeline, and that was the next big extension. And Pipeline is just like it sounds: it&#39;s a full tracking and planning tool that helps you see everything that&#39;s going on across your sourcing organization, automatically report on all of the projects that are out, and also with that is an intake platform, as well.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>We have Pipeline intake, we have the eSourcing platform with the reverse options in there and then on top of that, we also built like a smart contract repository. Then we also built a supply performance management system as part of that, as well. We now have a full source to contract platform that our customers leverage.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>That&#39;s awesome. I love that. Your partners at Scout, are they still the ones that you started off with, with ONOSYS in college? Or have you shifted?</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>It&#39;s the same four co-founders here that we started with. It&#39;s Stan and I to start with, Chris, and Andrew. The one other co-founder from ONOSYS, we&#39;re still terrific friends, he stayed with LivingSocial for a little bit longer and then proceeded to afterwards go and travel the world and then start another company, which he since sold, as well. So he&#39;s been in Istanbul. We have two other co-founders, and it&#39;s Andrew and Chris. They&#39;ve been a huge part of the success of Scout.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>That&#39;s fantastic. So tell me, what&#39;s next for you personally? Because you&#39;ve come so far so fast. Do you have a serial entrepreneurial edge to yourself? Do you see yourself starting another company? Or just continue to grow this one?</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>No. In just like the last company, we weren&#39;t planning on selling that company either, but we get this question all the time, both Stan and I, and we get this question and also the question around like acquisition and things like that. Neither of us have an interest in that. From the very beginning, we went and got funding partners, and our funding partners are Google, New Enterprise Associates, which is the largest venture capital firm in the world, and Google Ventures. All three of those are&mdash;what we loved about them&mdash;is that their vision for us is to take the company public and continue to run it.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>If you couldn&#39;t tell from all your interactions with Stan and I, we&#39;re incredibly passionate about what we&#39;re doing. We love our customers and all the interactions that we have with them. We&#39;re hugely passionate about the software, and that&#39;s pretty much universal across all of Scout. Our voices rise a little bit when we talk about it and when we demo it, and we have very passionate conversations here. So we&#39;re having a lot of fun. We do want to take the company public at some point. That&#39;s in the distant future, but that&#39;s our goal, and continue to run it. Everything that we do in terms of what&#39;s next will be informed by our customers and the voice that they give us.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>I love it, and I love how people are starting to discover you more and more and more. For a while, when you first came onto, as part of SIG, you were sure a well-kept secret. But you&#39;ve created quite a buzz, and our members are talking about you. So your passion is showing, and I&#39;m passionate about the industry, as you know, and I just love when I find somebody who isn&#39;t just in it for the short term and for quick money, but really in it because they love the industry, so I applaud you for that. I just really appreciate that viewpoint. It just gels so well with the SIG members.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>Thank you.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>If you were going to go back to...we&#39;re going to take a big step backwards to childhood. Did you always dream of being an entrepreneur? Is it something that you always thought, &quot;I can&#39;t work for someone else. I&#39;m going to have to do it myself&quot;? Or did you just discover it and it blossomed inside of you in college?</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>I wanted to be an entrepreneur from a very early age, and part of it is just, so my family and I moved from the former Soviet Union in the early &#39;90s. We came to America. That&#39;s the same story for Stan, as well. Both of us from very early ages had kind of the American Dream, and the family coming over, and the expectation that we would take risks and try to make a big difference and contribute here, so I think it was kind of ingrained. I knew from a pretty early age that I wanted to be an entrepreneur, so yeah.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>Wow. We&#39;ve got a lot of young people that listen to our podcast. If you had a recommendation to a young person who is thinking about the sourcing industry, what is the skillset that you think is absolutely critical to be successful?</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>This is what we tell everybody that comes in here, and this is why we start with our values, and our very first value is &lsquo;obsess over the customer&rsquo;. I think regardless of whether your customer is your manager or your stakeholders, or whoever your customers are, just knowing who they are, what&#39;s important to them, and truly listening and genuinely hearing what it is that they need, and learning to anticipate what those needs are, and get them what it takes for them to be successful. I think above all, if you can do that, if you can learn what your customers need and who your customers are and what they genuinely are looking for, that will suit you well in life.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>I think that advice, you read up on books and things like that, the most successful companies like Intuit, the Dale Carnegie, like everybody gives some version of that same advice, and so we decided to just go ahead and bake that into our values and our culture, because that&#39;s part of what Stan and I really pride ourselves on is listening and trying to make sure that our customers get what they need to be successful, and we want everybody at Scout to have that same viewpoint. I think for any listener who is starting out in their career or is anywhere, that&#39;s so important to cultivate as a skill, because it is something that&#39;s easy to forget and easy to lose.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>You know, Alex, for years I was in sourcing consulting, and it was one of the things I was passionate about talking to the procurement organization is know your customer. Know what their five-year plan is. Know what their goals are for next year. So many companies want to almost like do sourcing to them rather than do sourcing to make them successful, and then being the business units.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>Your message certainly resonates with me, because just so many times they just haven&#39;t known their customer; they weren&#39;t listening to the customer; they were just going in and immediately saying, &quot;I&#39;m going to save you money. I&#39;m going to streamline things,&quot; but not listening. Were they focused on capital expenditures? Or O&amp;M expenditures, which are very different how they hit the books. And just what does success look like? It might just be quality improvement, and not even a cost issue at all. I think you&#39;re absolutely spot-on with what is needed more in the industry, and I&#39;m so glad that that&#39;s baked into the culture of your company, as well.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>Thank you.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>If you were to be able to go back and be able to talk to your younger self, what piece of advice do you think that it would&#39;ve been nice to know? I&#39;m not sure that there&#39;s anything that could&#39;ve made you more successful, but what would you wish you could&#39;ve done differently, or could&#39;ve learned at an earlier age?</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>I&#39;ve gotten that question before, like if I could change one thing, I would probably...and I don&#39;t know how much of a difference this would&#39;ve made, but I love the fact that we grew up in the Midwest and had Midwestern&hellip;built our first company in the Midwest and had the Midwestern roots, but we have since moved the company to San Francisco. There is a difference to the cadence, to the speed, and to the intensity, and to the network that is here. So maybe coming to the Bay Area a little bit sooner to grow the company and really cultivate it.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>We were a little slow to move out here because of just not knowing what moving to the Bay Area would be like, but it&#39;s such a huge advantage for us to be close to the really big, very progressive companies. As we start to think about the future, I should say, as we continue to think about the future of things that we can build and how technology can help enable our customers to be successful, and what they&#39;ll need in the future&mdash;just having all those resources here to have those conversations on and see what&#39;s coming down the road&mdash;it&#39;s just so instrumental.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>That&#39;s interesting, because I really thought with your earlier successes, that you wouldn&#39;t need the Bay Area, because you already knew how to be successful. So it&#39;s interesting, but it still makes a difference to be surrounded by that kind of talent and drive and passion.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>It makes a big difference just to have the mentors and people to listen to. Yeah, it&#39;s been very rewarding.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>I think one of the neatest things is that you&#39;re very successful. You&#39;re the CEO of Scout RFP, and yet you&#39;re one of the most approachable people in the industry; you&#39;re humble; you&#39;re not stuck up; you&#39;re not driven by ego. I&#39;ve met hundreds of people in this industry, and that is a rarity. I just want to applaud you for keeping your roots and keeping yourself humble and keeping yourself so approachable. I think it just speaks volumes for you as a person. I&#39;ve really enjoyed getting to know you.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>Thanks, Dawn. I really enjoyed getting to know you and all the interactions we&#39;ve had with SIG. You&#39;ve built a really great organization and really great group of people.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>Thank you. They&#39;re all passionate, too. I just want to thank you for coming on. I&#39;d love to invite you back to the podcast maybe a year from now and hear what other super exciting things that are going on in your life at that point. Would you be open to coming back?</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>Would to do that. Would love to do that.</div> <div>&nbsp;</div> <div>Dawn Tiura:<span style="white-space:pre"> </span>Good. Thank you. Good, I&#39;m going to hold you to it. So, folks, I&#39;m talking with Alex Yakubovich. He is the CEO of Scout RFP, and it&#39;s been my sincere pleasure, Alex, spending a little bit of time with you today. So thank you so much.</div> <div>&nbsp;</div> <div>Alex Yakubovich:<span style="white-space:pre"> </span>Thank you, Dawn. Appreciate it.</div> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/customer-satisfaction" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Customer Satisfaction</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/sourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sourcing</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/company-culture" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Company Culture</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/business-goals" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Business Goals</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="A Healthy Obsession with Alex Yakubovich - Future of Sourcing" addthis:url="https://futureofsourcing.com/a-healthy-obsession-with-alex-yakubovich"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 28 Nov 2018 01:35:20 +0000 Alex Yakubovich 1493 at https://futureofsourcing.com https://futureofsourcing.com/a-healthy-obsession-with-alex-yakubovich#comments Why the U.K. Retail Sector’s Best Days are Ahead https://futureofsourcing.com/why-the-uk-retail-sectors-best-days-are-ahead <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/UK%20Retail%20Sector%20624x325.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/UK%20Retail%20Sector%20624x325.jpg" title="UK retail sector is not doing as bad as you think." class="colorbox" rel="gallery-node-1286-zi72FIMYQQE"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/UK%20Retail%20Sector%20624x325.jpg?itok=kxCkLmaS" width="624" height="325" alt="UK retail sector is not doing as bad as you think." title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div>If you only paid attention to newspaper headlines you would be forgiven for thinking that the <a href="http://www.futureofsourcing.com/brexit-are-retail-companies-ready" target="_blank">retail sector is collapsing</a> one store at a time. The truth, as always, is not black and white. Some businesses have failed to adapt to changing market forces, whereas others have embraced them.&nbsp;</div> <div>&nbsp;</div> <div>While ASOS, Boohoo, Primark and Ted Baker have all recently posted positive earnings, it is companies such as Marks and Spencer, Mothercare and New Look whose poor results get the most attention. But why are some succeeding while others are falling by the wayside? &nbsp;&nbsp;</div> <div>&nbsp;</div> <div><strong>New Look, Same Approach &nbsp;</strong></div> <div>&nbsp;</div> <div>Take New Look. The troubled fashion retailer announced an annual loss of &pound;235m in June 2018 and a number of shops have shut down. The company also saw a 20-percent drop in website sales. Speaking on the results, Executive Chairman Alistair McGeorge said: &ldquo;We lost connection with our core customers and got our stock packages wrong.&rdquo; He also blamed a poorly executed attempt to target a younger audience.&nbsp;</div> <div>&nbsp;</div> <div>During the same period, rival retailer Boohoo, owner of the PrettyLittleThings and Nasty Gal brands, saw overall revenue jump 52 percent in the three months. The company has reported strong revenue growth and market share gains across all markets, with U.K. sales up 49 percent and international sales up by 60 percent.&nbsp;</div> <div>&nbsp;</div> <div><strong>Listening to Customers&nbsp;</strong></div> <div>&nbsp;</div> <div>Understanding their customers allowed Boohoo to provide the best possible experience for them. They created a clear market proposition that leaves little room for confusion. Boohoo focused on targeting a new generation of customers through innovative marketing campaigns and social media channels. &nbsp;</div> <div>&nbsp;</div> <div>While Boohoo, PrettyLittleThings and Nasty Gal all operate under the same parent company, they each target a separate customer niche. Their multi-channel approach ensures they meet their customers&rsquo; needs and they have leveraged this focus to deliver above-market rates of growth.&nbsp;</div> <div>&nbsp;</div> <div>Mahmud Kamani and Carol Kane, Joint Chief Executives at Boohoo, have long championed the need for retailers to engage and understand their clients. They have attributed their success to a &ldquo;combination of the latest fashion at incredible prices, backed by great customer service resonating strongly with our customers.&rdquo;&nbsp;</div> <div>&nbsp;</div> <div>New Look, on the other hand, alienated loyal customers by targeting a new demographic, with a limited understanding of the market and no discernible unique selling proposition. They also raised then dropped prices when they saw their strategy was not working &ndash; further adding confusion for their customers. &nbsp;</div> <div>&nbsp;</div> <div><strong>Remember Who is King&nbsp;</strong></div> <div>&nbsp;</div> <div>The key, as always, is listening to your customers and that does not just mean moving everything online. Brick-and-mortar stores and online shop fronts offer distinct advantages to different customers, but the two are likely to co-exist in the future. Striking the right balance between them will be a challenge for the retail industry, particularly for large, slow-moving businesses, which have long operated under the same model.&nbsp;</div> <div>&nbsp;</div> <div>Technology, and more importantly, the rapid adoption of this technology, means expectations and preferences are evolving at a great pace. The need to be flexible and listen to customers has never been greater, whether it is in the way retailers arrange their products on the shelves, the types of promotions they run or the experience created in the physical stores. Thankfully, retailers exist within a world where data is readily available. As seen in the examples above, those managing to thrive are those who are able to leverage this data, understand their customers and provide them with a clear value proposition that enables them to engage with the retailer, be it online or in store.</div> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/technology" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Technology</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/disruption" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Disruption</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/customer-experience" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Customer Experience</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/customer-satisfaction" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Customer Satisfaction</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/strategy" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Strategy</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Why the U.K. Retail Sector&amp;rsquo;s Best Days are Ahead - Future of Sourcing" addthis:url="https://futureofsourcing.com/why-the-uk-retail-sectors-best-days-are-ahead"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/europemiddle-eastafrica" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Europe/Middle East/Africa</a></div></div></div> Tue, 02 Oct 2018 21:39:00 +0000 Milan Panchmatia 1286 at https://futureofsourcing.com https://futureofsourcing.com/why-the-uk-retail-sectors-best-days-are-ahead#comments The boomerang outsource https://futureofsourcing.com/node/949 <div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Offshore outsourcing is controversial. No news there. For over 15 years customers have been moving services offshore as part of their global souring strategy. In the early &rsquo;00s businesses couldn&rsquo;t offshore quick enough. Opponents of offshoring frequently quote the loss of domestic jobs, damage to economies, poor communication and quality, while proponents insist it facilitates competition and actually makes economies more efficient. But amid the furore, there is a rise in organisations returning from offshore.</p> <p>The main driver behind this trend is likely to be the decrease in the cost differential in labour between the domestic and offshore markets. The economic maturation of offshore locations over the past five to ten years (partly fueled by demand for skilled labour for the global outsourcing industry), has facilitated the establishment of global businesses. As a result salaries and other overheads are rising. Other drivers may include customer (dis)satisfaction, advances in technology and the importance of skills and talent retention to customer organisations. Together with a tangible shift toward value rather than simple cost reduction, these factors are causing many organisations to pursue the challenge of the &ldquo;boomerang outsource&rdquo;: bringing services back in-house.</p> <p>An initial step for customers considering this challenge would be to review its live contracts. Some early adopters of the offshore strategy signed up to arrangements of 10 to 15 years, meaning that their contracts are likely near expiry &ndash; another factor which might be driving the current volume of customers seeking to return onshore. However, if the contract has years left to run, exiting may be difficult and expensive. Customers should first review the termination provisions and explore the associated costs. Early termination may include break fees and payment of unspent minimum revenue guarantees.</p> <p>From an operational perspective, customers should consider how comprehensively they understand the current environment &ndash; including both the direct cost of the provider, but also the indirect costs of managing and inter-facing with the provider). Does the current contract provide for the provision of frequent management information and reporting? Or will this be made available on exit? A customer will need to consider what effort it can expect from its current provider. Is there a robust exit plan in place? At the start of an outsourcing relationship few minds immediately spring to exit, reverse transition or the potentially colossal work effort and expertise involved. A provider may be obligated to assist at no cost, or it may charge through the nose.</p> <p>Another factor to consider is the current workforce. This is potentially a sizeable cost associated with bringing services back in-house. What is the customer responsible for? Does the current contract envisage a transfer of supplier employees to the customer on exit? Is the customer liable for redundancy costs?</p> <p>Businesses will also need to consider service run costs and whether it has the specialist knowledge required to run an efficient and integrated service. Automation and digitalisation are two of the current prominent (and disruptive) trends in sourcing right now. They offer customers the opportunity to streamline key services, reduce run costs while increasing productivity. The question then of whether that automated service is provided offshore or in-house is almost redundant &ndash; almost because if the function is brought back in-house the organisation will need to consider investing in its workforce. Most minds leap to redundancies when discussing the streamlining-effect of automation, but while some immediate low-skilled job losses are perhaps inevitable, one of the key challenges facing organisations in 2016 is the shortage of technology skills and retention of talent. Therefore, organisations should consider re-investing in its workforce to up-skill and re-train it so that they can fully understand and run the new environment, maintain low attrition rates and future-proof its services, governance and communications structure.</p> <p>A return to in-house can pose significant legal, operational and financial challenges. Like with any sourcing initiative, it must first start with a comprehensive review of the financial and non-financial benefits together with the direct and indirect costs. Understanding the current environment and what IT and investment may be required will take time and effort &ndash; both from the customer and the current provider. If a successful return is what you want, make sure you know what&rsquo;s coming back, and how to catch it.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/automation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Automation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/backshoring" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Backshoring</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/communication" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Communication</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/customer-satisfaction" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Customer Satisfaction</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/legal" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Legal</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/offshoring" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Offshoring</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="The boomerang outsource - Future of Sourcing" addthis:url="https://futureofsourcing.com/node/949"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 25 May 2016 17:49:48 +0000 Megan Paul 949 at https://futureofsourcing.com The courage to change https://futureofsourcing.com/the-courage-to-change <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/FOS%20Digital_Kate%20Vitasek_Slider%20Graphic%20%281%29%20%281%29_104.png"><a href="https://futureofsourcing.com/sites/default/files/articles/FOS%20Digital_Kate%20Vitasek_Slider%20Graphic%20%281%29%20%281%29_104.png" title="The courage to change" class="colorbox" rel="gallery-node-1132-zi72FIMYQQE"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/FOS%20Digital_Kate%20Vitasek_Slider%20Graphic%20%281%29%20%281%29_104.png?itok=An3q3B5X" width="624" height="325" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Outsourcing involves major changes in your business model, your teams, your approach to core and non-core business lines and cultural mindsets.</p> <p>That aspect of the outsource decision &ndash; change &ndash; is inherently psychological because when you come right down to it, it&rsquo;s always about your people, their relationships and attitudes, and the way they adjust to new thinking and new patterns that will make or break an outsourcing partnership.</p> <p>That&rsquo;s also why as I teach the concepts, rules and elements of Vested Outsourcing, I use this quote from Wayne Dyer: &ldquo;If you change the way that you look at things, the things you look at change.&rdquo;</p> <p>Dyer, a best-selling author on self-development who is also known as the &ldquo;father of motivation,&rdquo; holds a doctorate in educational counseling from Wayne State University and was an associate professor at St. John&rsquo;s University in New York.</p> <p>In his book,&nbsp;<em>The Power of Intention</em>&nbsp;(2005), Dyer explores intention &ndash; not necessarily as something you do, but as a form of energy and change that&rsquo;s actualised and controlled through creativity, expansion, receptivity and kindness.</p> <p>The Vested model embraces those qualities in order to change the thinking and create a new dynamic between the parties in an outsource relationship. The Vested approach is based on creative collaboration and trust, receptiveness to change, expansion through innovation and incentives, and kindness by &ldquo;playing nice.&rdquo;</p> <p>&ldquo;If you&rsquo;re always in a hurry, always trying to get ahead of the other guy, or someone else&rsquo;s performance is what motivates you, then that person is in control of you,&rdquo; Dyer says. And relationships based on obligation and control &ldquo;lack dignity.&rdquo;</p> <p>Playing nice and working jointly on intentions, objectives and desired outcomes to achieve the win-win requires a transformation &ndash; a change &ndash; in thinking.</p> <p>The Jaguar/Unipart relationship provides a great example of the power of change &ndash; and the courage to implement it. Jaguar began working with Unipart almost 25 years ago. The initial focus of the outsourcing effort was aftermarket auto parts fulfillment in the United Kingdom. When Sir Nick Scheele took over as Jaguar&rsquo;s CEO in 1992, the two companies had already established a track record of moderate success.</p> <p>But after recognising that the relationship was not working as well as it could and that a change was needed, he had an informal dinner discussion with Unipart&rsquo;s CEO, John Neill. The goal was to discuss how the companies could improve the business model while also driving more positive benefits for Jaguar and Unipart.</p> <p>These discussions ultimately led to the creation of a Shared Vision statement that has guided the companies&rsquo; outsourcing partnership. Their statement embodied a key, basic tenet of Vested Outsourcing: WIIFWe (&ldquo;what&rsquo;s in it for we&rdquo;) and the win-win mindset. The Shared Vision not only strengthened the personal relationship between the two leaders; it led to a deeper understanding of each other&rsquo;s business model and how to leverage that for maximum gain. Further, it led to discussions on such topics as identifying the real customer and how success is defined and measured.</p> <p>It has been a highly successful collaboration: when Unipart entered into the contract more than 20 years ago, Jaguar ranked ninth in the J. D. Power &amp; Associates survey for Customer Satisfaction. In 2008, it moved to number one &ndash; passing Lexus, BMW, and Mercedes Benz. Jaguar has maintained that spot ever since.</p> <p>Which brings us back to Dyer&rsquo;s quote at the beginning of this column: changing the way you look at things will necessarily change those things.</p> <p>The trick is to handle that change with care, collaboration &ndash; and courage. During the Vested process, one of the first things that outsourcing teams do as they establish their relationship is to jointly draft a Shared Vision and craft a Statement of Intent. These are the necessary building blocks of a Vested agreement, setting the larger guiding principles for the relationship.</p> <p>The parties at this point understand the business at hand and align their objectives for the work ahead. But sharing intentions is not easy and requires a flexible and receptive mindset. The Statement of Intent builds the foundation for the agreement to go forward by defining how the parties will work together under the agreement and how they will behave once the agreement is documented.</p> <p>The elements that go into crafting the Shared Vision and Statement of Intent are detailed in my book,&nbsp;<a href="http://www.vestedoutsourcing.com/books-2/" target="_blank"><em>The Vested Outsourcing Manual</em></a>.</p> <p>As Dyer says, &ldquo;Our intention creates our reality.&rdquo; That statement is equally true for people in their personal lives and in their business relationships.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/business-change" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Business Change</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/change-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Change Management</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/customer-satisfaction" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Customer Satisfaction</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/shared-vision" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Shared Vision</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/vested-outsourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Vested Outsourcing</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="The courage to change - Future of Sourcing" addthis:url="https://futureofsourcing.com/the-courage-to-change"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 16 May 2012 00:40:42 +0000 Kate Vitasek 1132 at https://futureofsourcing.com https://futureofsourcing.com/the-courage-to-change#comments