HfS Network

It's official: the outsourcing industry has voted out its name

September 05, 2012 | Phil Fersht

All the stakeholders in the outsourcing industry have finally spoken - 871 enterprise buyers, providers and advisors - in an unprecedented study of broad opinion as to whether it's finally time to drop the term "outsourcing" for business and IT services.  

HfS Research has reached out (see survey) to its unique community of services and operations professionals, and can finally reveal the answers we have long been searching for - that it's time to re-brand the industry formerly known as outsourcing, with 61% of the industry stakeholders voting to drop the term:

Half of the enterprise buyers responding have over $5bn in revenues, 73% are significant influencers, and most of them have many years of experience with "outsourcing".  HfS would like to thank all of you who took the time to share your opinions on such a pivotal issue.

What's immediately revealing is that close to two-thirds of buyers and providers are fed up with the term, and the fact it's almost impossible to remove the image that outsourcing is only about the offshoring of labor, as opposed to engaging with service providers to create business value.  The advisor community is evenly split, with a good number of them enjoying the fruits of advising on outsourcing transactions - changing the "O" word is bad for business for many of them.  Conversely, there are also many management consultants who would like to remove the term, as it often prevents them from having meaningful and productive discussions with clients, who run a mile when the "O" word crops up.

But what alternative terms have each stakeholder community suggested to replace the "O" word? And what will the termination of the "O" word mean to industry stakeholders?  Will they lose their identity, or is this the beginning of a new era?

Stay tuned... all will be revealed.  Right here!

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesGlobal Business Services

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1 Comments

6 Comments

  1. An industry with no name? The outsourcing industry votes out the “O” word but can’t think of an alternative&#8
    Posted Sep 07, 2012 05:03 PM | Permalink Reply

    [...] – let’s call it something else… with two-thirds of the buyers and providers voting to drop the term, all we have to do now is agree on a super cool new set of words, and the industry’s current [...]

  2. Marc Kauffmann
    Posted Sep 11, 2012 10:43 AM | Permalink Reply

    I believe that the term Smartsourcing represents the next generation of Outsourcing. It intimates cost reduction, innovation, and the intelligent use of progressive vendors.

  3. TimJ
    Posted Sep 12, 2012 03:38 AM | Permalink Reply

    Just plain "sourcing"is a good alternative. It encompasses outsourcing, in-sourcing, third party to third party, off-shoring, near-shoring, etc. It is neutral and doesn't carry the political baggage of "outsourcing".

  4. Maria K.
    Posted Sep 12, 2012 07:38 AM | Permalink Reply

    Marc, your suggestion is grand!

  5. April
    Posted Sep 21, 2012 12:53 AM | Permalink Reply

    I think it doesn't really matter. It's not the term or name that we should focus on but the quality or value that comes with it. But if it really does affect the people who runs the business whenever the "O" word is mentioned, then I guess changing the name is not a bad idea.

  6. Pradeep Nair
    Posted Oct 11, 2012 02:28 PM | Permalink Reply

    The differentiation between internal and outsourced has to narrow down or disappear. An external body of expertise comes in an serves a certain purpose, during longer term associations that external body has to be treated like an extension or a close partner. Outside the procurement and financials confines the word 'outsourcer' should not be used.

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