Implementing an Outsourcing Talent
Management Program at Boeing
Elevating Strategic Sourcing
Capabilities:
Boeing
Lawrence KaneSr. Leader, ITI Strategy & Sourcing
www.sig.org/eval
Copyright © 2015 Boeing. All rights reserved.
Elevating Strategic Sourcing Capabilities
Lawrence Kane, COP-GOVSIG Global Executive SummitAmelia Island, FLMarch 10 – 12, 2015
–Implementing an outsourcing talent management program at Boeing
Copyright © 2015 Boeing. All rights reserved.
Engineering, Operations & Technology | Information Technology
About Boeing…
The world’s leading aerospace company
Provides products and support services to
customers in 150 countries
Designs and manufactures commercial and
military aircraft, rotorcraft, electronic and
defense systems, missiles, satellites,
launch vehicles, and advanced information
and communication systems
Headquartered in Chicago, Boeing employs
more than 170,000 people across the
United States and in 70 countries
More than 140,000 of our people hold college
degrees, including nearly 35,000 advanced
degrees, in virtually every business and technical
field| 3
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Engineering, Operations & Technology | Information Technology
“Our job, regardless of organization, is to make sure we’re spending our money where it moves the needle because we only have so much.” — Kevin Schemm, vice
president of Finance & Strategy and chief financial officer, Commercial Airplanes
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Copyright © 2015 Boeing. All rights reserved.
Engineering, Operations & Technology | Information Technology
Background
Boeing/McDonnell Douglas merger, 1997
– Heritage Boeing insourced all IT
– Heritage McDonnell Douglas outsourced all IT
We needed a sourcing strategy
Worked with Gartner to develop and implement industry leading strategic sourcing practices and methods
– Multisourcing… one of the first to implement
– Benchmarking… actionable clause; retroactive adjustments
– Gated evaluation process… acquire the right supplier
– Red team reviews… assure first time quality
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Current Environment
IT infrastructure is ~ 75% outsourced
IT applications are ~ 50% outsourced
Needed products and services cannot be delivered without partnering with suppliers
Strategic sourcing and vendor management disciplines are critical to overseeing the process
– Outsource/retain strategy
– RFx development
– Bidder evaluation and supplier selection
– Governance
– Etc…
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Engineering, Operations & Technology | Information Technology
The Challenge We Discovered
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Robust tools and processes are not enough… it takes an experienced workforce
Personnel changes, attrition, and reorganizations have led to knowledge/skill loss
Escapes have caused value leakage
– Customer impacting transitions
– Unanticipated costs
– Excessive contract changes
– Need to engage consultants to shore up internal capabilities
– Etc…
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Engineering, Operations & Technology | Information Technology
Discuss…
People
Process
Technology
… how mature is your sourcing organization?
… common process or compartmentalized?
… centralized vs. decentralized decision-making?
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Engineering, Operations & Technology | Information Technology
Target Environment
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Help new sourcing and supplier management employees become productive as expeditiously as possible
– Define a common language, principles, and leading processes
– Assure consistent implementation across all organizations
Continuously adopt industry leading practices (that are applicable to Boeing)
– Leverage industry proven practices
– Lay the foundation to strengthen outsourcing processes
Make the implementation of the sourcing process better, faster, and cheaper with assurance (achievingexpected outcomes/results)
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Implemented Solution
Licensed rights to use an industry standard training program
Trained and certified 8 Boeing SMEs to teach the materials internally
– Candidates needed sufficient experience to earn industry accreditation
– Highly effective communication and instruction skills
– Commitment to teach at least two classes per year
Implemented a three-year cascade training program to educate stakeholders
– Hold ~ 8 classes per year across three geographies
– Optimal class size is ~ 20 attendees
– “Mix n’ match” organizations to facilitate cross-functional networking
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Engineering, Operations & Technology | Information Technology
Class Curriculum
Standardized materials that cover every aspect of the sourcing lifecycle
– In-depth training
– Industry leading practices
– Recognized worldwide by suppliers, consultants, and buyers alike
– Precursor for accreditation
Boeing customization:
– Boeing executive expectations
– 4 days, including additional governance focus
– Links to policies and procedures
– Tailored case study that assures relevancy to Boeing
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Copyright © 2015 Boeing. All rights reserved.
Engineering, Operations & Technology | Information Technology
Discuss…
Training plans
Sources of knowledge
… have you licensed a formal training program?
… other sources of knowledge?
… what changes have you institutionalized?
… what benefits have you achieved?
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Engineering, Operations & Technology | Information Technology
Value Proposition
Year 0 Year 1 Year 2 Year 3
Internal Training Public Training
Cost
“It means that you are someone who will be continuously in touch with emerging industry best practices and can successfully apply them to your organization.” – Wayne Heiler, Pfizer
“It is as much based on real lessons learned from the application of the standards as it is on best in class or proven approaches to the work.” –Catherine Giles, Liberty Mutual
“It means that I can speak a common outsourcing language, and drive successful outsourcing solutions in my workplace.” – Teresa Harris, GE
“The curriculum provides for a common lexicon for our industry and enables more effective execution across the outsourcing value chain.” – Eugene Kublanov, KPMG
Value
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For a large rollout, internal training costs
significantly less than sending employees
to public classes
Example: 90 trainees
Copyright © 2015 Boeing. All rights reserved.
Engineering, Operations & Technology | Information Technology
Risk Management
14
Lik
elih
ood
5
4
3
2
1
1 2 3 4 5
Consequence
Risks
1) Value leakage in existing and new supplier
relationships
2) Training investment outweighs value loss
3) Making investment doesn’t guarantee
results and treated as a “passing fad”
4) Viewed as invented by a small group
Mitigations
1) License industry standard program and train
affected personnel
2) Communicate success stories… cost of
quality = cost of non-conformance + cost of
conformance
3) Management commitment and relentless
discipline
4) Following industry proven methods; trainers
industry certified
1
2
3
4
124 3
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Engineering, Operations & Technology | Information Technology
Assuring Momentum
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Active executive sponsorship
Continuous commitment
Accountability for results
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Engineering, Operations & Technology | Information Technology
Rollout Plan
Class schedules in 2014
– Puget Sound Nov (“beta test” class)
Plan of class schedules by site for 2015, 2016
Class Agenda
– ½ day Monday
– Full day Tuesday – Thursday
– ½ day Friday
Class size ~ 20 students
– Assure diversity of background of attendees for optimal experience| 16
1Q 2Q 3Q 4Q
Charleston Feb Oct
Puget Sound Mar Jun Aug
St. Louis Apr Sep Nov
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Discuss…
Lessons learned
… how do you assure continuous improvement?
… how do you energize employees to seek out and adopt new knowledge?
… how do you gain support for needed change?
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Copyright © 2015 Boeing. All rights reserved.
Engineering, Operations & Technology | Information Technology
Lessons Learned
Think big
Stakeholder analysis
–Executive sponsorship
–Employee engagement
Implement the easy “ah-ha’s” …and institutionalize
–Don’t try to boil the ocean… continuous improvement not revolutionary change
Exercise change management discipline
–Help stakeholders overcome fear of change
–WIFM… career growth and certification opportunities
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Copyright © 2015 Boeing. All rights reserved.
Engineering, Operations & Technology | Information Technology
About the Presenter…
Lawrence Kane is a Certified Outsourcing Professional in
Governance (COP-GOV) and a Boeing Designated Expert (BDE)
in IT Sourcing. A senior leader at Boeing, he established the
sourcing office, hired and developed a high-performance team,
and saved more than $2.1B by architecting the IT infrastructure
sourcing strategy, designing the proposal evaluation process,
executing RFPs, negotiating with providers and benchmarking
the effectiveness of resultant deals. He is also the best-selling
author of eleven books, including three USA Book News Best
Books Award finalists, an eLit Book Awards Bronze prize, a Next
Generation Indie Book Awards finalist, and two ForeWord
Magazine Book of the Year Award finalists.
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Copyright © 2015 Boeing. All rights reserved.
Engineering, Operations & Technology | Information Technology
Thank you!
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Lawrence Kane
Senior Leader
ITI Strategy & Sourcing
The Boeing Company
Phone: (425) 865-7516
E-Mail: [email protected]
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Session #26
Elevating Strategic Sourcing Capabilities: Implementing an
Outsourcing Talent Management Program at Boeing
Lawrence Kane
Boeing(425) 865-7516
Speaker:
www.sig.org/eval