TON: Balancing Flexibility & Commitment

May 22, 2017

Our TON program at Danske Bank on May 18, took a look at balancing flexibility and commitment. Although a fairly broad topic, our individual sessions gave us a chance to look specifically at various management tools, vendor management approaches, KPIs, instruments, and such that we can use to set, tune or adjust outsourcing and offshoring relationships to increase the likelihood of desired results.


Bent Petersen, Professor, CBS, kicked off the day with The Red Thread with insight from the academic literature on the topic, e.g. that when the surrounding market is more volatile, research says that companies must work more flexibly to obtain good results; as well as some research on how Swedish MNCs (namely Volvo, Astra Zeneca etc.) strike this balance with their suppliers. Central to Bent’s input is that client organisations want commitment from their vendors and partners but also want the flexibility to terminate (or cut back) at will. This reality disinclines vendor organisations from investing, e.g. optimising processes, new technologies, etc., as they may not re-coop their investment. This push-and-pull dynamic is challenging, but not impossible, to alter and Bent offered several examples of companies deliberately shifting the trade off to reap more commitment and/or more flexibility.


Lone Green Arnholz, Head of Vendor Management, IT, Danske Bank, then offered Danske Bank’s perspective on the matter, beginning with Danske Bank’s strategy of “being number 1 in customer experience.” Because so much of their customers’ experiences happen on IT platforms and applications, IT vendors’ performances are critically important. The Vendor Management group, under Lone’s direction, brings a holistic relationship approach to supplier relationship. Focus is on the large, complex banking platform and the specific role that each of the strategic vendors plays in making sure that Danske Bank’s business needs are met.


Our network then got a chance to hear about Danske Bank’s journey with mobile solutions. Jan Baungaard, Vice President, Development Director, Mobile Ecosystems, Danske Bank emphasised the company’s focus on the user experience as a driver challenging old structures. In this fast-moving environment, Danske Bank needs to be flexible, as do its vendors. Working this way can mean structuring work through iterations and, at least for Danske Bank, establishing a dual-mode organisation with entities in both classical banking and disruptive areas, with vendors aligned appropriately.


In our “challenge” session, Cristina Sima, Associate Manager, Diabetes Finished Products, Finance, Novo Nordisk, presented a challenge they have encountered on their journey to properly leverage their Global Service Center in Bangalore. Once Cristina had briefly described the challenge, our TON network then had a chance to discuss the issues and to come back with a few ideas from their own similar experiences about how Novo Nordisk might meet the challenge.


A short workshop, facilitated by Lotte Astrup, Frmr Director, PMO, Xellia Pharmaceuticals, on “dosing” control and trust in relationships with our suppliers gave us a chance to reflect on Bent’s insights on making deliberate choices and pulling certain “levers” to produce the desired results. In our small groups, we had a chance to discuss which kinds of relationships are best suited to which kinds of work, technologies, and services.


Thanks to all of you who participated in the day, helping to make it another great TON event!


We look forward to our next TON program which is being held at CBS on September 14. For details on all of our upcoming programs, dates and topics, click here.