At a recent meeting in Dalian, China, I was chatting with a site manager for a leading India-based service provider. Naturally enough, the topic of workforce management challenges came up, so I took the opportunity to ask about the relative difficulties in attracting, training, and retaining employees for business process outsourcing operations.

The site manager started off by confirming what I already knew – then he threw me a curve ball. First he told me that China, like India, has an abundance of trained young professionals. Check. Then he said that attrition on his team was roughly equal to that seen at his company’s India-based operations. Again, no surprise. But then he explained why professionals often quit their jobs in this industrial city in northeastern China.

First, a few reminders: In India, employees start to leave as they acquire additional skills and experience and the forces of supply and demand make it possible for them to get a better wage by jumping to another job. Young professionals are feverous for opportunities to grow, so managers have to develop employees and keep offering challenges and potential for advancement.

The cultural forces take a different form in China, I learned. Many employees grew up as only children – with all the focused nurturing that entails – with the result that managers often find it difficult to supervise them. As the Dalian site manager told me, you can't be harsh with employees, else you risk them quitting. They are not accustomed to anything less than positive feedback, he explained. (We've read about this same sense of entitlement among the young professionals now entering offices in the U.S.)

Figuring that this manager's experience might be an aberration, I did some more asking around. Sure enough, I heard the same from several other managers of China-based companies and even from managers at multinational firms with operations in the country.

No one is saying that one country's professional workforce is better than the other. Rather, the lesson is: Cultures matter, and in outsourcing and offshoring, it’s all about getting the best people to do the best work. Techniques for attracting and retaining that talent are unique to each country.

As anyone who has a read a magazine, surfed a consumer Web site or spent the pre-bed hour tuned in to Letterman knows, the world is in love with lists. Lists that aim to show the best, worst, priciest, cheapest, sexiest – whatever the metric, we are captivated by Top Tens.

And that's fine. Humans by nature look to place the world around them into a hierarchy.

But you don't have to be a statistics student to know that lists by definition are limiting and therefore limited in their ability to guide decisions. Think about all those "Top Stocks/Clothes/Gadgets You Must Buy in the New Year" lists plastered on magazine fronts at year end every year. Now think about how well those lists stand up to the whims of an extraordinarily diverse population over the next 12 months.

Which brings me to the headline of my blog, which you now know was made in jest. But this is no laughing matter. My company is data driven, so we understand and support the development of effective measures for the sourcing industry. But given our wide body of experience in a variety of sourcing situations – situations as diverse and unique as the world at large – we also know that best thinking critical to business decisions isn't captured in lists that purport to reduce to 10 lines all you need to know about your service provider, offshore locale or advisors.

Yet every day we are seeing more of these rankings lists produced in and around the outsourcing world. To the extent they garner headlines and further discussion about an evolving, global industry, they are helpful (albeit often misleading). But if they are the sole or main basis for a sourcing decision by an organization, then the organization and its clients aren't being well served.

For example, some rankings show that countries such as Brazil and South Africa are garnering more interest from corporations looking to source out select business services. Those are broad measures of interest, and valid ones. Whether they prove prescient only time will tell, and a whole lot of really relevant factors – local workforce quality, infrastructure, flexibility of government – will shape and shift the final results.

Other rankings, however, fall short by casting providers and advisors as being categorically better or worse than their competitors at managing business process, IT, HR or financial outsourcing. Among the problems with these rankings: They don't make any allowances for the very different circumstances of the organizations seeking sourcing relationships.

For example: If your company is a large multinational that already has multiple sourcing relations in place and wants to outsource an additional function, your needs and goals may be sharply different from an up-and-coming firm that's just dipping its toe into the sourcing water. The former may be comfortable dealing with a certain type of counselor that's demonstrably good at its job. The latter may want to be guided by a different set of advisors who are equally good at their jobs but better tasked to serve the needs of this type of client.

As for the Black Book of Outsourcing’s “rankings” of service providers, advisors and law firms, one must be wary of ordinal lists conceived from a “sampling” of 22,000 people. The industry doesn’t have 22,000 decision-makers informed enough to offer judgment. Further, a quick scan shows an uninformed intermingling of providers and advisors – a sign of confusion among either/both the survey-takers or survey-makers. Finally, the dramatic changes year-over-year on such rank-ordered lists – radical shifts in players, providers and advisors is an indicator that the ranking is not performance or capability-based, but rather evaluation-based. It’s easy to get a new list if one changes the rules – and changes the sampling techniques.

Indeed, the flaws I'm talking about here also get exposed in the fine print of many rankings, where we learn that any and all respondents' views are reflected in results, including multiple views from companies that end up counting for as much or more as the views of a real decision maker at another company. Thousands of responses without any polling control do not constitute a categorical portrait of any industry or its participants. All in all, broad and general rankings are poor, and often irrelevant, contributors to corporate sourcing strategies.

Anyway, the larger point – the one above all the noise – is one you've heard from me before: Sourcing has become part science, where the best deals have to factor in a whole lot of unique data specific to each client. The very particulars of your context matter most. The best provider is the one that takes the time to learn the most about your needs, which is not necessarily the same as the one at the top of all those lists.

Recognize lists for what they are: Fun reading, even a jumping off point – but not the basis for a major budget initiative that's going to go to your bottom line.

For nearly a year, I’ve been carrying around an article that was sent to me by a colleague. I seem to pull it out on every trip, reading and re-reading on planes and trying to assess whether it has anything to say about any of our clients.

Thomas Davenport's article, “The Coming Commoditization of PROCESS,” was published a couple of years ago in the Harvard Business Review. I've read it enough times that you don't have to, but should you be so inclined, it's here: http://harvardbusinessonline.hbsp.harvard.edu/hbsp/hbr/articles/article.jsp?articleID=R0506F&ml_action=get-article&print=true

Davenport's premise is that a broad set of process standards soon will make it easy to figure out whether a business capability can be improved by outsourcing it. Such standards allegedly also will make it easier to compare service providers and evaluate the costs/benefits of outsourcing. Eventually these costs and benefits will be so transparent to buyers that outsourced processes will become a commodity, and prices will fall dramatically.

Davenport writes that the low costs and low risk of outsourcing will then accelerate the flow of jobs offshore. He concludes that these changes are already happening with some business processes and eventually will spread across all commonly performed processes.

Hmm.

Despite the convenience that is implied by Davenport, that’s not what I hear clients are looking for. In fact, many have tired of the endless droning on about “best practice processes,” or “process reengineering,” or even “process portability.” One client recently told me, “Peter, your industry seems to be in love with its processes when what your clients want to buy are services.”

It's a notable distinction.

Let's put a real-world example under the microscope. For instance: Has the use of the Software Engineering Institute’s Capability Maturity Model really leveled the software development playing field? Granted, it’s been instrumental in improving the quality of software processes, and it’s a fine measure of legitimacy as a development organization, but do clients really select providers based on their CMM level? Not that I’ve seen.

Process standards are supposed to create confidence in the effectiveness of the end result. They aren't there as the sole criteria for selecting a service provider. It’s the services that really matter, and those services are distinct by virtue of the way in which they are delivered.

As we like to tell our clients, the how is just as important as the what in successful outsourcing.

My colleagues and I spend more of our time these days educating senior executives on the art of the possible regarding the service options for their back-office functions. Structural changes are what's wanted, and the subjects of offshoring agendas, shared services, capital-expense efficiency and the like are becoming common conversational fodder for corporate officers and directors.

As you can imagine, opinions vary widely on the appropriate course for any given organization. No one strategy is prominent, obviously, and we've seen companies in very similar situations choose very different directions.

But there are a couple of key factors that animate all these discussions, and I want to share them with you. These are the filters that are most critical to the executives charged with making the essential decisions on sourcing strategies.

Strategic Purpose: There must be a well-articulated reason for change, and the reason has to go to the core strategy of the firm. There's no shortage of people who feel compelled to say NO. True change requires top-down authority to make an affirmative decision.

Review of the Status Quo: How are the services organized and delivered today? What can that structure achieve for itself? Too often, this is an emotional topic that segues into perceptions. It's important to develop an informed and balanced baseline.

Point Solution or Holistic Overhaul: Are we trying to address a relatively small number of functions or overhaul the entire service delivery model? Many organizations end up with a basket of "point solutions" when what they really needed was a new framework for the entire enterprise.

Principles of Shared Services: Can the organization imagine operating with a model of internally shared resources along with an attendant governance structure to effectively manage the supply-and-demand tensions that can arise with shared resources? This is a rather big deal, often quickly touching upon the control and decision authority of executives.

Substance or Form: Is the transformation envisioned one of deep capability and cost improvements, or is it about refining an already well-understood model? This question addresses the trade-offs between risk and reward that are tolerable.

Time Horizon: While almost all such evaluations are motivated by relatively near-term ambitions, how prepared is the organization to phase in incremental improvements? For offshoring endeavors, the record shows that this is a very important question. Lack of thorough preparation can spell disaster, but applying a fair degree of prior experience can be an accelerator.

Viability: Does the organization have the raw capacity to change itself? To determine this, companies really need to know their own limits AND whether leaders will back up the planned changes. It's the "old dog, new trick" adage, and it's best to know the dog.

Compelling Financial Business Case: Is there a financial rationale, typically expressed over a multi-year time horizon, based on reasonable assumptions and the wherewithal to implement it.

Managing for Results: This factor is often least considered but also is often the make-or-break filter. Does the organization have the across-the-firm commitment to empower the new organization to succeed?

Most of you will recognize that these filters apply to a much broader range of organizational change than just outsourcing and offshoring considerations. Sometimes the evaluation concludes in an outsourcing direction – for a single function or a multi-process transaction. Sometimes the destiny is a captive offshore initiative. And sometimes the answer is to implement changes in internal structures, such as shared services.

What's striking to us is how often the outcome is not what was anticipated at the outset of the evaluation. Many organizations believe that their capacity for change is far greater than evidence would suggest.

I'm really interested in the questions being asked about productivity in outsourcing deals these days. I've noticed a pronounced cyclicality in the productivity-related queries from senior executives.

To be candid, most of the time we get asked how to measure the effectiveness and efficiency of an organization it's because someone wants to ward off "the man” who is looking for cost-cutting ammunition.

Then we seem to enter periods when executives (often, in the same companies) come looking for data on the productivity and performance of their internal-services departments for entirely different reasons – including to help them make the case for greater investments or for changed operating models.

The question we hear framed is, “Are our support operations contributing maximum value to our strategy?” As much as all of us would like there to be a readily available measure of productivity or efficiency, this is a complex topic that demands a fair degree of management judgment.

Most of our clients look to structure their support operations to meet a future target. They don’t want to organize for yesterday. That’s why measurement requires executives to be involved and vocal through the various possibilities of asset deployment, cost avoidance, return-on-asset strategies, changing workforce demographics, and the like.

We always give providers this advice: Don’t try to solve yesterday’s problems. Help clients achieve a new vision, because that's where you will break through and create real value. That means, among other things, evaluating current and projected volumes of work as well as degrees of automation, standardization and rework. It also includes quantifying AND qualifying the potential benefits of scale, transportation of work to lower-cost centers and the availability of specialized marketplace providers.

Net: Productivity ratios and metrics exist, but they alone won’t provide what the client really wants, which is the answer to the question of how their sourcing relationships can directly contribute to their organization's strategic agenda.