
Service providers are in pole position to provide the value clients need, however, there needs to be some give-and-take on both sides to move beyond mere “augmentation”

Secular changes to industry environments are crystallizing options for businesses and driving more radical and actionable behaviors from executives under pressure to deliver continual productivity improvements. The radical impact outsourcing can potentially have on business performance is clearly becoming more attractive to those businesses in the throes of tackling fundamental challenges and opportunities to their business environments.

After many lost nights’ sleep trying to seek out that elusive morsel of innovation, it has finally dawned on us: where better to look than the Magic Kingdom? So after writing a personal letter of apology to both Jeb Bush and Mickey Mouse (was an easy copy/paste) we are delighted to announce that HfS is making an Orlando tribute tour to SSON’s magical 16th Annual Shared Services & Outsourcing Week

The Phoenicians were among the greatest entrepreneurs of their time who dominated the trade of the ancient world and founded colonies throughout the Mediterranean. We will never see the likes of them in the modern business world, where a nation of business hungry folk could possibly develop their own real estate within today’s Global 2000 organizations through savvy barter of their own wares. Or will we?

The BPO industry has been going though an incredible evolution since the first major deals was cast, barely more than a decade ago, that it’s high time we took stock and take a good look at the phases – or generations – through which our industry has progressed. And there are few people who have lived and breathed these generational shifts more closely that Accenture’s BPO leader, Mike Salvino.

Our core mantra at HfS has always been to tackle the issues and complexities of global sourcing through the eyes of the buyer. One analyst who has spent nine years of his life doing just that, leading BPO governance for the $62 Billion healthcare payor, WellPoint, is our Governator himself, Tony Filippone. No single person in 2011 has written to – or talked with – more buyers about their governance challenges, and we are delighted to reveal to the world today his elevation to Executive Vice President of HfS’ research team.

TCS’ insurance services delivery subsidiary, Diligenta, has become wedded to in a 15-year, $2.2bn, 1900 employee life and pensions BPO engagement with the UK’s Friends Life. This represents the largest life and pensions BPO engagement by a considerable margin, eclipsing the $1.1bn Prudential contract awarded to Capita in 2007. We believe this move from TCS signals a sea-change in the industry with regards to the growth strategies and ambitions of the leading BPO providers.

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.
So how do you take shared services leaders and blend their expertise with the outsourcing governors? How do you go from fragmented service delivery with multiple points of contact, to a global governance model with a rationalized and centralized administration of third-party service providers?
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.
Deborah Kops bemoans why today’s service providers are so male-dominated