Like Mr. Mullinax, Mr. Hillstrand of TXU rejects the standard core-versus-noncore dividing line. “I don’t think we’d impose any artificial limits” on what to outsource, he says. “Every time we look at our business, we look at it with an eye to making it better. Do I think that we’re married to our own steel? Or that there are certain things that we simply would never let go of? Not necessarily.” He is always searching for better ways to serve TXU’s constituents. “We don’t hesitate to look at the tools that are out there, whether that’s development of joint ventures, disposition of assets, or reconfiguration of businesses into a synthetic arrangement of ourselves and best-in-class providers to achieve a financial and operational outcome that’s really desirable to us.” This attitude is integral to the “distinct competency around outsourcing” that Mr. Hillstrand says TXU is developing in its leadership.
Over the past few years, academic researchers like Charles Handy and Shoshana Zuboff have written about the deliberate design of “flat” and “networked” corporations. But ironically, it’s the rough-and-tumble world of Asian and emerging-nation outsourcing providers that has created actual networked businesses as a model for the future. There’s a growing awareness that, despite the potential pitfalls, outsourcing has become the sine qua non of the successful global corporation. “Every day some part of our business — and this is an evolving discipline for TXU — is asking itself, ‘Are we the natural owner of function X?’” says Mr. Hillstrand. That kind of continuous self-examination may ultimately turn out to be the most significant aspect of the new outsourcing — and potentially the gateway into yet another, still more sophisticated wave of virtuoso activity.
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Vinay Couto (couto_vinay@bah.com) is a vice president with Booz Allen Hamilton in Chicago. He advises companies across multiple industries on BPO sourcing strategies and assists those clients in running outsourcing programs.
Ashok Divakaran (divakaran_ashok@bah.com) is a principal with Booz Allen Hamilton in Chicago. He specializes in the development of strategies for large-scale organizational transformation, with a focus on outsourcing, offshoring, and shared services.
