Stratoserve LLC

Are P-Cards abused ?

Some years ago I wrote a paper on P-Card users doing maverick purchases.  Generally, I thought the issue was resolved till the recent GAO report, much discussed in the popular media.

P-Card  use  in Government, according to the report, has  grown from 3 billion dollars in 1996 to over 17 billion dollars in 2006. This growth has resulted in over $1.8 billion in savings in various transaction costs,compared to centralized purchasing and all the associated paperwork of small value "C" class purchases.

Interestingly, my quick reading of the GAO report suggested that the troubles are with mainly the purchases over $2500 that are 3% of transactions but 44% of the dollar value. Proper authorizations
( "control") are lacking and called for. The sampling of abusive use made for salacious headlines in the popular media.

I suppose much research on P-Cards need to be still conducted, but I think one finding from my own paper , is pretty applicable to the GAO report.  That is:

• Train P-Card users to be careful, particularly above the micro purchase threshold of $2500. Get approvals  soon after your purchase if you can't get approvals before buying, particularly if you are a Government employee or your organization rules have a P-Card per transaction limit. Also facilitate this by asking the card companies to report all buys above  your  threshold so that the very next month all approvals are sorted out. Should not be too difficult as only 3% of the transactions are over the limit of $2500.

Doing so would deter P-Card misuse (if you need to face your boss either immediately before or after  a dubious purchase, you'd think twice)  but, on the downside,would also make the GAO report less  colorful!

Upcoming KPO/BPO learning opportunities in Florida and New York

I am really glad to see the surge of recent interest on knowledge process outsourcing and the shared service domain. End of March you have the Orlando Florida event where you have the eminent strategy guru Ram Charan  leading the proceedings.  On a more applied and "what I can I do with this KPO thing specifically"  note is the nice event at New York on April 29 and 30 .

The KPO summit is chaired by the noted Duke University Professor Arie Y. Lewin . Talks include  financial sector KPO by Andy Eftathiou ; types of KPO including business,investment and legal research by Suresh Yannamani ;the India advantage by Ron Somers, and a KPO best practices panel discussion  with Vasant Bennett , Ken Cutshaw EVP and General Counsel of Church's Chicken and Ranjit  Dua of  Dua Associates.

On April 30th we have Julio Ramirez  on finance and accounting KPO, Marcia Mcleod of Williams Energy on contracting, Lawrence A. Schultis  on risk management in contracting, Jack Diggle    of Prince OMC   on managing human resources in KPO,  A group  from CPA Global  ( Bhaskar Bagchi, Inder Duggal and Susan Hanstad) with an operational KPO  case study; comparing India,Ghana,Philipines and Eastern Europe for KPO with Harry van Geijn of Fortis Insurance International; a case study of managing the "stay behind" workforce by Steve Hosle of AOL followed by Fauzia Zaman Malik  of Accenture  on captive vs build operate and transfer (BOT) models and finally  Frank Cocuzza of Penske (check out this story here) on relationship governance for KPO. Those new to BPO and KPO might like to attend the pre-conference sessions by  David Perla of Pangea3 LLC to prep for the main event.

KPO has indeed  come a long way from my various efforts since  2005 on "Global Outsourcing of Knowledge Based Services"!    

KPO is back in the news

Knowledge Process Outsourcing (KPO) is back in the news with estimates ranging from $10-17 Billion/year volume by 2010. I ran the first ever  MBA elective on "Global Outsourcing of Knowledge Based Services" in Fall 2005 - and a  CAPM seminar in April 2006, with the same title. While well attended, I think KPO  classes and seminars were rather early for 2005.  

During those early years "outsourcing" was a scary word associated only with  layoffs. Globalization and its opportunities was something that was not clearly apparent.

It was nice therefore to read the KPMG report  that explains the difference between "BPO" (Business Process Outsourcing ) and Knowledge Process Outsourcing particularly for the financial sector. The report is well written though I would disagree with the rather provocative subheading ...."outsourcing the core". You really cannot outsource your core competence  but you can certainly re-define what your firm's core competence is when you can get a knowledge task like equity research done overseas at a low cost. But all in all a great report !

Mature Global design Strategies improve profits

I was rather happy to read the Aberdeen report's summary which highlights that global product design and development leads to reduction in product development time and time to market while allowing the protection of intellectual property through Digital Rights Management.

This blog and my research has been investigating these issues for some time and I am glad that the data is now available. The question is how do you make it work in practice, particularly if you are not a gigantic organization that can afford to open offices worldwide and actually place your person to work with the supplier in another country. That is an interesting question .....

Return from Vancouver and the tension between Web 2.0 and ERP

This is the 100th or centennial post of this blog and I thought I should write something hopefully in the "centennial" league! But first about my trip to Vancouver. The trip was great as was the in-depth exposure to SAP and the various Universities that have included SAP in the curriculum. On my way back I had the 11.20 pm flight to Montreal from where I was supposed to get onto the Hartford flight. But Air Canada canceled the flight due to non-arrival of the crew and I found myself on standby for the Toronto flight that finally left at 1.30 am and could get to New York La Guardia. My travels over the past one year have been always interesting with such changes coming up quite unexpectedly. This time, I thought positive and thought of the great scenery  at Vancouver and felt that I was far better off than the poor Jet Blue Passengers who were stranded on the iced runway!

Coming to the centennial bit of this post I have been thinking about how different the assumptions of Web 2.0 and the ERP world is. Web 2.0 is about open source, collaboration volunteerism and a certain element of uncertainty that can be tough if you are running a business and have to be accountable to customers,suppliers,employees and other stakeholders. That's where ERP systems like SAP come in. Every transaction is recorded for posterity and links to every other part of the organization and it's processes and therefore become more SOX compliant. Going forward global suppliers and customers would probably combine elements of the wonderful flexibility of Web 2.0 and the comforting rigidity of sound ERP systems and this blog will be watching the evolving "balance" with interest. ....