ABSTRACT
Abstract: Senior executives continue to seek ways to transform back-office processes such as information technology (IT), human resource management, finance, and accounting. Can these functions be managed to simultaneously reduce costs and improve service? Historically, senior executives have used several models of transformation: do-it-yourself, management consultants, fee-for-service outsourcing, and even the occasional joint venture. Although these transformation models remain viable for various contexts, a more recent model has emerged that warrants attention-the enterprise partnership. With an enterprise partnership, the customer and supplier create a jointly owned enterprise that both services the customer investor as well as seeks external customers. The enterprise partnership model is illustrated through an in-depth case study of BAE Systems and Xchanging’s partnership for human resource management, including underlying IT support. The chapter provides a framework and assesses the lessons for selecting and managing back-office transformations. Many lessons seem counterintuitive to previous research findings, including selecting a supplier with generic business competencies rather than domain-specific knowledge, selecting a culturally “incompatible” supplier, and delaying due diligence until after the deal is well under way.
