Outsourcing Relationship Management - ORM in The Enterprise

ORM in The Enterprise

ORM is complementary to other established enterprise management strategies in its relationship to established enterprise resource planning (ERP) tools and the linkage to important business constituents.

• Supply chain management and procurement systems linking to suppliers,
• Human resource management and payroll management systems linking to employees,
• Customer relationship management and sales force automation linking to customers, and
• Outsourcing relationship management linking to external service providers

A challenge in implementing ORM strategies lies in the nature of the outsourcing relationship itself. In his 2004 book "The Outsourcing Revolution"., author Michael Corbett discusses the challenges of integrating two separate business entities (the client and the external service provider) across the different organizational boundaries and differing motivations and objectives. This book was one of the earliest works to focus on outsourcing relationship management as one of the keys to successful outsourcing strategies. More recently, Gartner has launched an outsourcing specialty which has conducted significant research in this area.

The importance of ORM will only increase as companies continue to pursue "Extended Enterprise" or "Corporation 2.0" strategies to take advantage of the skills, resources and global footprint of external service providers. In the 2006 Global CEO Study, IBM has identified business model innovation as the most important success factor cited by the 765 global CEOs surveyed. The survey noted that "fully 65 percent of chief executives and other leaders say they will have to make fundamental changes in their businesses over the next two years. New products and services remain a priority, but they’re placing increasing emphasis on differentiating themselves through innovation in the basics of their business models. They believe that external collaboration across their business ecosystems will yield a multitude of innovative ideas."