Once the outsourcing agreement ends, it is possible for the supplier to sell the information to the client's competitors (Schniederjans, Schniederjans and Schniederjans, 2005)
It would require long periods of time for the outsourcing operations to be implemented and retrieve the desired results
The organizational change generated mutations in the organizational culture and stood increased chances of being welcomed with reticence on the part of the Unilever employees
It would be necessary to convince IBM to implement a managerial process based on customer satisfaction (van Dijk, 2009)
Throughout the duration of the outsourcing contract, several lessons were learned by the managerial team at Unilever. All these lessons represent retained capabilities which will help the company improve its future operations and as such its future results. Some of the most notable of these lessons include:
In order to succeed, strong organizational culture and governance are pivotal
Partnerships with strong teams increase success rates
It is important to implement change management strategies
Unite the two teams under the umbrella of the same goals
Capitalize on the expertise of the supplier, but value the relationship with them
Offer and expect trust and transparency
Clearly establish goals but also allow flexibility
Allocate sufficient resources to the outsourcing contract
Maintain key people (van Dijk, 2009)
Finally, it is crucial to engage all stakeholder categories in the change process (Gottschalk and Solli-Saether, 2005).
5. Supplier Perspective
The initial contract was expected to generate positive outcomes not just for Unilever, but for IBM as well. The it company was already established as a reputable leader of Information Technology services, but its partnering with Unilever -- a multinational corporation with complex operations -- and the success in such a challenging partnership would additionally enhance the company's reputation as it would prove its capabilities. From this standpoint then, it becomes obvious that the IBM selection of Unilever as a partner was an adequate decision.
Aside this however, there were also the financial outcomes which would be retrieved from the customers. In other words, the value of the contract with Unilever was to be a dual one, with financial gains on one side and reputation gains on the other side. Yet, throughout the supplier selection process, several advantages and disadvantages could have been observed. Some of the advantages of IBM in the Unilever outsourcing contract include:
IBM had a vast expertise in outsourcing contracts with various clients and it had even managed to diversify its offering
The provider had proven their ability to adapt their it solutions to fit the needs of each individual customer
The IBM brand was strong and reputable all over the world and Unilever could gain advertising advantages from the contract
IBM possessed experience with financial transactional services, the specific service palette desired by Unilever
Some of the disadvantages for IBM in the Unilever outsourcing contract refer to the following:
The large size of IBM and their increased number of customers could materialize in low levels of flexibility and a reduced interest in the distinctive desires of their individual customers
IBM would offer its financial transactional services from three different global locations, element which might materialize in more difficult communication between client and purveyor.
Aside from the disadvantages revealed to the customer, the deal could also pose risks for IBM. For instance, the Unilever operations could have been too disperse or too complex for IBM to handle them efficiently. Also, the costs of the endeavor might have run too high to generate any profitability.
Aside the material and reputation gains which prove that the contract with Unilever was fruitful, the conclusion is also supported by the satisfaction of the client. Due to the positive results achieved, Unilever and IBM extended their contract in 2008 to also include the offering of it services to Unilever Latin America. The contract would be applicable for five years and, through it, "IBM will help Unilever integrate and standardize its procurement practices...
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