The ability to develop some best-in-class processes as “Business Platforms”, whether they focus on horizontal or vertical process clusters, is becoming a real differentiator in the market, as buyers seek more standardized solutions from their outsourcing engagements. The gauntlet being laid out to providers, with these Business Platforms, is their ability to support their clients’ transitions quickly and inexpensively. Simply selling “products” is not the concept of business platforms – it is the provider’s ability to work with their customers to facilitate and support the ultimate business outcomes of managing the processes associated with the Business Platform offering.
Governments are very capable of passing measures very quickly to restrict outsourcing if things get really bad – and they won’t have any choice if the 99% demand it. All outsourcing stakeholders – buyers, providers and advisors – need to focus, more than ever, on helping organizations approach outsourcing as one supporting component of a holistic solution.
What is motivating buyers to outsource in this current climate? While eliminating cost is still is a huge fundamental, buyers are even more focused on achieving greater flexibility to scale their global operations as a prime motivating factor. Clearly, many executives are getting more experienced and skilled at driving an sourcing initiative, and are confident they can use the endeavor as a change agent to promote and implement much-needed change in their businesses.
Our new study that covered the intentions and observations of 534 buyers, advisors and providers with their sourcing strategies in the event of a “Double-Dip” Recession reveals one major shift in the industry: most buyers now recognize what their businesses need to improve to drive productivity, they simply are struggling to figure out how to marshall their internal and external resources to help them get there.
Our latest study shows that many buyer executives are, in actuality, in violent disagreement with many provider and sourcing advisor executives that they their business leaders are too “short-term focused”
Organizations have always been wary of outsourcing during recessions. While today it delivers cost-reduction to clients in spades (proven emphatically during our recent state-of-outsourcing study), many organizations have proven, in the past, to push it down the priority-list of radical cost-reduction measures, when they fear for their very existence. However, with the threat of a “Double-Dip” recession very much a grim reality, HfS believes this cycle is likely to be broken.