Business satellites

At this point I would like to introduce the concept of ’business satellites’. I believe that the concept could be applied to organizations of almost any size and any description.

The business satellite concept will not be necessary for an organization that:

  • can honestly claim that its non-core functions are competitive now and will remain so in the future;

  • despite past changes which might have involved the releasing of middle management, they can justifiably claim that there is sufficient growth potential in its non-core functions to attract the best qualified staff;

  • can guarantee that the next technology project will be implemented in a competitive timeframe, at a competitive cost, will meet the targets set for it and will provide a competitive advantage for many years ahead;

  • will shortly re-engineer its non-core functions in such a way that a long-term competitive advantage is assured;

  • will meet development needs by ensuring that the highest quality of staff is always available for such work;

  • can ensure that where outside specialist help is required, this will be of the highest possible quality, will be cost effective, will avoid or limit internal disruption and will produce results that guarantee a competitive advantage for many years to come;

  • will use the best service provider available for any outsourcing arrangements which will result in providers making substantial service improvements, costs savings, continuous improvements in a situation where the organization is a key client and each month the provider strives to do even better than in the previous month.

I suggest that any organization that cannot be positive about the issues detailed above could benefit by setting up a business satellite (BS) programme. Before I describe a BS programme in detail, I want to explain my thinking a bit more.

  1. I am not saying that organizations should dispense with management techniques such as business process re-engineering. I believe these techniques have played and will continue to play, a valuable part in modern business. I am, however, saying that you should both understand their limitations and your own success rate at handling past projects of this type.

  2. I am not saying that organizations should ignore the potential for improvement offered by the implementation of ERP systems and other technology developments that might integrate the business processes. Far from it, the logic of developing integrated systems has been apparent for a very long time. The trouble is that ERP systems are probably still at a development stage comparable to that of the motor car in the 1920s, with the mechanics and drivers belonging to an even earlier era. I accept that as they exist, they cannot be ignored, and that most sizeable organizations have to bite the bullet and buy them. It is, however, essential not to consider them the ultimate solution to the competitiveness problem. Management does not solve its competitiveness problem just because an ERP implementation has been completed.

  3. I am not arguing against the use of management consultants. Without doubt the dramatic benefits, in terms of performance improvement, achieved by some major organizations probably would not have been possible without help and advice from these specialists.

  4. I am not making the BS suggestions as a means of holding back the tide of change. I accept that more and more people will work for themselves in various types of contracting roles in the future, but I don’t necessarily think that this heralds catastrophic short-term changes in the way organizations are managed. I accept the concept of the virtual organization – but I doubt that many of the organizations already in existence today will have achieved virtual status by 2020.


management does not solve its competitiveness problem just because an ERP implementation has been completed


In summary, no human being can see what the future will bring, but we have to make decisions that constitute our best estimates. Forecasts of the future may be useful in concentrating the corporate mind on the competitiveness problem, but without positive action they cannot be a solution to the problem. All the usual solutions start from the assumption, which is normally correct, that the situation is desperate and that this, of necessity, requires a major firefighting exercise. Very few people could justifiably claim that their internal projects and outsourcing arrangements are the result of a carefully thought out long-term plan.

forecasts of the future may be useful in concentrating the corporate mind on the competitiveness problem, but without positive action they cannot be a solution to the problem


Is there a way of dealing with the competitiveness problem that allows for long-term planning and an easier alternative path to salvation? The BS programme looks for this easier path.

A BS programme is based on the following principles.

  1. Most organizations will want to perform core functions in house but will be willing to consider the advantages of passing non-core functions to specialists in those business areas.

  2. In-house performance improvement projects for non-core functions tend to fall short of meeting the targets set for them.

  3. However beneficial outsourcing might be in theory, it is not easy to be sure that the service provider will remain committed to ensuring the best possible service for each and every client.

  4. The greatest chance of outsourcing success is likely to arise in situations where both client and service provider have a financial interest in making the arrangement work. This must go far beyond simply meeting the contracting details in order to obtain a specified fee. In most cases some form of joint venture will be necessary.

  5. The technology factor is the key element in maximizing the performance of non-core functions.

  6. The development of BS programmes should not result in too much extra pressure, financial or mental, being placed on management. In any commercial environment the best way to avoid pressure is to plan ahead. With BS planning ahead is straightforward, because having accepted that it is the technology element that is causing the problem, management is free to create one or more parallel IT organizations to duplicate and later take over the functions controlled by its current information systems. The time from creation of the BS to its takeover and control of existing systems can be flexible. A BS could therefore be set up for a function that is currently being subjected to a performance improvement project or is already outsourced.

  7. Being empowered to do your own thing and working for an organization in which you have a financial stake is an ideal incentive for producing excellent work.


The following theoretical example illustrates how BS programmes might work.

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