Unlocking Next-Generation Value through Technology-Embedded Business Process Services. Part 2

As we noted in part one Unlocking Next-Generation Value through Technology-Embedded Business Process Services | Part 1 The What and Why of this two-part report, the global business environment is experiencing major shifts as a result of combined economic, demographic, regulatory, and technological changes. Business Process Services (BPS) is caught up in the mix as these shifts disrupt existing business models and create new ones. Organizations expect their BPS initiatives to result in greater agility and speed, as well as to drive business outcomes, all on top of the traditional operational cost savings and efficiency.

Technology is both a catalyst and an enabler of this BPS evolution. As organizations explore ways to effectively leverage and embed technology in their BPS initiatives, there are three imperatives they must understand:

  • The technology spectrum available and the benefits of creating a technology-embedded BPS model
  • The way technology needs to fit into their overall BPS design and lifecycle, anchored in business outcomes
  • The best practices to implement these technologies

This research focuses on the second and third areas – how technology fits into the overall BPS design and how best to implement technology. (Please see part one of this report, Unlocking Next-Generation Value through Technology-Embedded Business Process Services | Part 1 The What and Why, for details on the available technologies and the benefits of creating a technology-embedded BPS model)

This research:

Contact Center Outsourcing Annual Report 2016: The Rise of Digital Contact Centers

Contact centers across the world are moving into the digital era with focus on enhanced customer experience in a multi-channel environment. This industry-wide change has led to service providers changing their value proposition from traditional FTE-based business to technology enabled solutions such as automation and analytics in order to stay relevant. With the market going through a period of transition, the global CCO market grew at a rate of 4% in 2015 to reach US$75-78 billion.

The changing landscape of the buyer requirements and evolving consumer needs for multi-channel digital experience has had an impact on the solution characteristics that exist in the CCO market currently – higher onshore delivery, multi-channel solutions, technology, automation solutions, value-added services, technology, and pricing model.

This report will assist key stakeholders (buyers, service providers, and technology providers) understand the changing dynamics of the CCO market and help them identify the trends and outlook for 2016-2017. In this backdrop, the report provides comprehensive coverage of the global CCO market including detailed analysis of the market size & growth, buyer adoption trends, CCO value proposition & solution characteristics, and service provider landscape. Some of the findings are:

  • The global contact center spend stands at US$ 300-320 billion, of which third-party outsourcing accounts for ~25%
  • Buyers’ expectation from service providers have expanded beyond cost containment and implementation to focus on pro-activeness, providing better insights, and innovation
  • Onshoring activity continued to increase in 2015 as buyers increased their focus on improving service quality and prefer agents close to customers
  • The adoption of multi-channel contracts is increasing with greater inclusion of chat and social media to address the evolving customer need for an integrated digital experience

Source: EverestGroup-Contact Center Outsourcing Annual Report 2016: The Rise of Digital Contact Centers – Clear Evidence that Real Change is Underway

Outsourcing is passé, it’s time to build a smart bot empire

Today robots pick-pack boxes in warehouses; assemble varied objects as small and delicate as smartphones and as large and complex as aircraft engines.

Automation is making rapid inroads into IT and business processes, transforming human to system and system to system interactions. This raises a pertinent question for customers-why outsource when you can automate to get the cost advantage?

Intelligent automation presents itself as the best-suited solution for majority of rules-driven processes being outsourced today (infrastructure management or IM, business process management or BPM and application management and testing) – redefining the offshoring versus on-shoring debate.

While there is a scope to bring down the headcount by over 50% and reduce costs up to 70% in an optimally automated IM contract, automation also poses a dilemma for enterprises–adopt a cost-effective automation fix to solve technology problems or choose an end-to-end automation solution which may require a higher upfront investment?

Robotic process automation and artificial intelligence (AI) are poised to redefine IT-BPM industry. Robotics has played a pivotal role in transforming the shop floor and assembly lines in the manufacturing sector.

Now, software robotics is gaining traction across healthcare, insurance, banking and BPM industries. Robots can automate workload of 1.5-2 full time equivalent (FTEs) jobs in IT-BPM industry and still generate net saving of $10,000 per job i.e. work delivered by 2 FTEs at a cost of $40,000 can be performed by a robot, generating net savings of $20,000 by year two of deployment.

Similarly, the AI technology has come a long way since 1997, when an intelligent machine defeated the world chess champion. Sophisticated robotic traders powered by AI techniques dominate the present-day stock exchanges, accounting for 70% of transactions in the US. AI applications will become pervasive across industries with evolving self-learning capabilities to further improve productivity .

While there has been a lot of rhetoric around the threat posed by automation to the traditional IT outsourcing model; it also presents an opportunity. As automation adds 10-20% cost savings beyond what offshoring already provides, enterprises will deploy saved IT budgets on other innovative technologies.

Such a trend has been observed in the past when lower offshore billing rates enabled enterprises to reduce their IT costs significantly while IT services spen ding continued to soar (2003-08, 2010-12).

That said, recent initiatives by Indian IT services providers vindicate that they saw this coming, and are taking a lead in innovation. Majority of the players have launched their automation platforms, made acquisitions, set up separate digital units and established partner and startup ecosystems.

Service provider (SP) initiatives are moving beyond automation-friendly services to nontraditional customer-facing enterprise applications to offer efficiency and cost benefits. For instance, AI platform of a tier-I Indian IT services player uses machine learning algorithms to create digital virtual agents for next-generation customer services solutions.

Advances in intelligent automation are ushering in a gradual shift from people-centric to technology-centric business models-debunking the idea that technological expertise of an enterprise is directly linked to its headcount.

In April 2012, a photo-sharing startup, employing 13 people, was acquired for $1 billion – giving it a valuation of ~$77 million/employee. Fast-forward two years, an over-the-top messaging company, which employed 55 people, was acquired for $19 billion ~$345 millionemployee.

Automation technology applications have so far barely seen the tip of the iceberg. Indian SPs should not fall prey to short-sighted approach that views automation cannibalising their existing revenue streams.

Unlike the software product industry, automation product landscape does not have globally recognised brands. This is a unique opportunity for Indian SPs to build indigenous platforms and products and dominate this space.

There is a wide held belief that while automation may disrupt jobs and businesses across industries, it will also fuel the demand for holistic SPs who can help clients with long-term solutions (product architecture and application design) as well as medium-term productivity enhancements through intelligent automation.

Source: tech.economictimes.indiatimes.com -Outsourcing is passé, it’s time to build a smart bot empire

EMEA As-a-Service Boom Contrasts Sluggish Traditional Outsourcing Activity

Information Services Group (ISG) (NASDAQ: III), a leading technology insights, market intelligence and advisory services company, today released the findings of its 2Q 2016 EMEA ISG Index™, which include, for the first time, a view on the growing As-a-Service market.

The EMEA ISG Index™, which measures commercial outsourcing contracts with an ACV of €4 million or more, shows that combined second-quarter ACV in the Europe, Middle East and Africa (EMEA) market fell by 18 percent year-on-year, to €2.2 billion. Traditional sourcing fell 28 percent to €1.6 billion, its lowest ACV in seven years, owing to a lack of large awards and a noticeable pullback in contract restructurings. The As-a-Service market, at €600 million, was up 38 percent for the same period.

Over the first six months of the year, the EMEA market generated €4.9 billion in combined ACV, flat with the prior year. Although traditional outsourcing values declined during this period, As-a-Service ACV grew 38 percent, reaching its highest point ever and passing the €1 billion mark for the first time. This growth was fuelled by an impressive lift in Infrastructure-as-a-Service (IaaS) activity, which rose 63 percent. Software as a Service (SaaS) logged a respectable 9 percent growth in the same period.
Globally, these As-a-Service activities now represent 36 percent of the combined market, having nearly doubled their share since early 2014. ISG predicts that this segment will continue to see accelerated growth in the months and years ahead, both globally and in EMEA, as clients leverage increased automation and continue to shift operations to the cloud. The Global combined market saw ACV of €6.4 billion awarded in the second quarter, down 2 percent from the prior year. At the half year, global ACV of €13.4 billion was up 10 percent compared with the first half of 2015, with record high As-a-Service values somewhat offsetting the sluggish performance in the traditional outsourcing market.

Market insights
By market, the Nordics led the way. In the first half, its traditional outsourcing ACV was up 25 percent over the second half of 2015, and more than doubled compared with the first half of 2015. France followed their lead, with values up 14 percent sequentially and up by one-third year on year as a result of some large contract awards. However, performance in the other sub-regions was lackluster.
In the UK, EMEA’s largest market, the figures revealed a surge in the value of traditional outsourcing of almost 40 percent compared with the admittedly soft previous half year period. Compared to the first half of 2015, ACV fell 11 percent as the result of a pullback in contracting activity.
Despite healthy contracting activity, which rose by a third for the half year, DACH’s traditional market ACV plummeted by 71% sequentially and 30% year on year as large companies in the region adopted a characteristically cautious approach to some of the newer transformational services in the market.

Sector breakdown
By industry, Financial Services remained the leading sector for both value and contracting activity. Its €1 billion ACV represented a decline of 17 percent compared to the first half of 2015, despite its number of contracts increasing by 17 percent for the same period.
Manufacturing had its strongest 12-month performance since 2011 and while slightly down on the prior period’s impressive performance, the first half picture was positive, up 34 percent on the previous year. Other industries fell short at the half year; with the exception of Retail, which was up slightly on a small base.

John Keppel, partner and president of ISG, said:
“EMEA’s traditional sourcing markets pulled back in the second quarter and came in at lower levels than projected, due to a lack of large deals and restructurings, and alongside some challenging macro-economic factors within the European Union. These factors, and notably the result of the UK referendum on EU membership, will continue to have an impact, although it is too soon to tell exactly what this will look like. We expect traditional market ACV for the year may come in slightly lower than 2015.
“At the same time, As-a-Service growth should continue along on a steep, upward trajectory as corporations in EMEA increasingly harness the flexibility and speed on offer.”

Source: sourcingfocus.com-EMEA As-a-Service Boom Contrasts Sluggish Traditional Outsourcing Activity 

IT outsourcing falls steeply in second quarter but IT as a service sees strong growth

Sales of IT as a service growth in Europe helped offset a huge fall in the total value of traditional IT and business process outsourcing contracts


The total value of traditional IT outsourcing contracts in Europe fell in the second three months of 2016, but IT as a service contracts saw significant growth.

The entire contract value in the Europe, Middle East and Africa region, taking into account deals worth €4m and more, was €2.2bn – 18% less than the same period a year ago.

At €1.2bn traditional IT and business processing outsourcing was down 28% in the second quarter of 2016, compared to the same period in 2016, according to the latest figures from ISG. In contrast, IT as a service total contract value in the region jumped 38% to €600m.

“The region’s traditional sourcing markets pulled back in the second quarter and came in at lower levels than projected, due to a lack of large deals and restructurings, alongside some challenging macro-economic factors inside the European Union,” said John Keppel, president at ISG.

“These factors, and notably the result of the UK referendum on EU membership, will continue to have an impact, although it is too soon to say exactly what this will look like.”

Keppel said ISG expects the total value of traditional IT outsourcing contracts in 2016 will be slightly lower than 2015. “At the same time, as-a-service growth should continue along on a steep, upward trajectory as corporations in the region increasingly harness the flexibility and speed on offer.”

As-a-service all-commodity volume growth is being driven by infrastructure-as-a-service (IaaS) activity, with total contract value rising 63%.

Software as a service (SaaS) increased by 9% in the same period. The sale of as-a-service contracts could be part of the reason that the value of traditional IT outsourcing contracts is falling.

The amount of money UK organisations spent on IT and business process outsourcing fell sharply in 2015, compared to the previous year.
A lull in UK outsourcing activity in the run-up to the election caused a 25% drop in spending across the Emea region in Q1 2015, claims ISG.
A report from sourcing advisor, Information Services Group, has reported a decline in the value of contracts during 2013.
SaaS is well established with companies such as Salesforce.com, Microsoft and Oracle all offering their software through the cloud with subscription models.

The IaaS market is seeing significant growth with the likes of Amazon Web Services and Microsoft, through Azure, winning contracts with customers of different shapes and sizes.

The ability to pay for computing resources when you need them, without up-front capital costs, is driving the adoption of IaaS.

Source: computerweekly.com-IT outsourcing falls steeply in second quarter but IT as a service sees strong growth

Outsourcing and Contingent Labor: CIOs look beyond cost savings towards gaining skills and flexibility

As IT organizations transform rapidly to a digital model through the use of cloud and Big Data, the practice of outsourcing is shifting, too.

On the one hand, outsourcing is booming: Half of CIOs (50 percent) will increase their investment in outsourcing this year, up 4 percent from 2015, according to the 2016 Harvey Nash/KPMG CIO Survey, The Creative CIO. And in the last five years the use of contingent workers has grown by 25 percent, while the number of IT leaders using flexible contingent labor for more than half of their technology team has grown.

At the same time, the traditional view of outsourcing is also changing. Outsourcing relationships have typically been used as a lever to reduce operating costs. However, these days more IT leaders are looking at outsourcing as a means to access needed skills and capabilities in a constantly-evolving digital world, as opposed to simply a way to cut down on costs. This comes as no surprise, as The Creative CIO found that almost two-thirds (65 percent) of IT leaders believe a lack of talent in areas such as data analytics and enterprise architecture will slow down their pace of change, up 10 percent over the past 12 months.

Around half of IT leaders see outsourcing primarily as a tool to free up resources to focus on the core business, up from 46 percent in 2015, The Creative CIO revealed. In addition, with a serious technology skills shortage, 45 percent of IT leaders also outsource to gain access to skills not available in-house, up from 41 percent last year; while the “save money” outsourcing rationale has stayed static, with 42 percent saying this is a main reason.

The Creative CIO also found that CIOs are exploring ways of creating innovative methods of working. That is especially true in the world of outsourcing: As revenue-generating projects move front and center, the contingent labor force is seen as a way to gain agility and flexibility, as well as a fast way to get workers on board.

Organizations focus on outsourcing for “make money” projects

Outsourcing has increasingly become about focusing on top-line spend based on larger strategies as opposed to operations spend, says Charles Arnold, principal at KPMG. “Save money” projects, he explains, have typically been about long-term operational issues such as running core data centers more cheaply or handling provisioning over multiple years. IT is increasingly focused on driving capabilities and with strategic projects that make money, rather than executing tasks that save money, he says.

Companies moving to cloud-enabled, virtual, multi-channel concepts, and away from legacy technology solutions drives the outsourcing trend. “Companies need to enable these platforms for growth — this is a required shift,” says Arnold, adding that doing so allows companies to engage in the projects that take advantage of new digital capabilities. For those projects, outsourcing by hiring contingent labor works very well. “This is where there is a dramatic increase in hiring contingent workers,” says Arnold.

“Make money” projects enabled by new digital capabilities could involve building new tools that don’t yet exist, based on larger digital strategies related to omnichannel or increased engagement. For example, a life science company’s end goal might be to allow patients to order prescription refills directly through the company rather than through a drugstore chain. The tactical project would be to build a smartphone app that allows patients to automatically refill their prescriptions directly.
“We’re not talking about long-term, keep the lights on work, which traditional outsourcing might address,” says Arnold. “This is a more strategic build, but in a singular project rather than as an ongoing operation.” Today’s CIOs, particularly ones that are top-line focused, are now looking to drive digital strategy and build the technical architecture that enables these projects.

Because these shorter-term projects turn more rapidly, companies can innovate using all kinds of labor services, including contingent workers. “The bulk of managed services agreements in recent years have focused on keeping whatever you’re already doing running,” says Arnold, “and saving money through traditional outsourcing was the play.” Now, he explains, there can be more flexibility — whether a company chooses a project-based consultant, a third-party contractor or a large-scale outsourcing provider.

The best outsourcing relationships blend cost savings and top-line results

Of course the best of both worlds is a well-structured agreement where labor resources for a project-based engagement come from the same managed service provider as the company’s traditional outsourcing efforts, but the behavior becomes very different in a project-based environment, Arnold emphasizes.

“It is critical to recognize the different ‘flavors’ of engagement with your provider. The type of relationships you have with their resources may differ for large-scale managed service outcomes vs project-based, singular deployments.” Either way, it’s about helping the company operate in an efficient and effective manner.

The organizations that succeed most with outsourcing are those that figure out how to blend the foundational efforts of running systems and creating platforms for innovative and creative work — that not only keeps costs down but also enables top-line results. According to The Creative CIO, today’s CIOs are under increasing pressure to help their firms become more agile, global and digital — delivering value but also growing profitably and keeping costs in line.

“The best outsourcing transactions enable both of these areas, whether they are all done in one service relationship or in a variety of partnerships,” says Arnold. “The question is how to architect your relationships so that you can get the best of both? You need to pick the right partners that can save you money and enable the efforts that drive toward making money,” he says.

Source: cio.com-Outsourcing and Contingent Labor

What is Hybrid Outsourcing & Why Should You Care?

I’m sure you’ve heard the adage that one of the keys to investing is diversification. Well, the same can be said for outsourcing. The three types of outsourcing – nearshore, offshore and onshore – all have specific benefits and each option is typically associated with expertise in certain skill sets based on the training available in that geography. A hybrid solution encompassing a variety of these outsourcing options can often provide you with the most optimal solution to align your company’s needs and goals with that of your outsourcing provider, while minimizing your cost outlay.

Valor views hybrid outsourcing as a best-sourcing model made up of the best combination of offshore, nearshore and onshore resources to best fit your specific needs and budget.

Advantages of a Hybrid Outsourcing Model

  • Low Cost – In addition to the traditional cost-saving benefits of outsourcing – such as eliminating costs of training, benefits and overhead – optimizing your mix of geographies and skill sets can help you improve operational efficiency and lower your costs.
  • Increased Effectiveness – Best sourcing matches cultural compatibility, skilled labor and cost requirements to align with your company’s specific goals and create the highest levels of productivity.
  • Scalability of On-Demand Labor – Utilizing a hybrid model provides maximum uptime and scalability – helping you extend your workday between multiple global locations. By eliminating capacity, location or time zone constraints, you are equipped with a virtual, on-demand labor force.
  • Single Source of Contact and Management – Having multiple, optimized outsourced locations doesn’t translate to more work and more management time on your behalf. Your outsourcing provider should provide a single source of contact to handle all the management, oversight and alignment between locations.
  • Standardized Processes – The cost of optimizing processes is greatly reduced since the hybrid model utilizes the same optimized and standardized processes throughout all locations.

Combining Offshore, Nearshore and Onshore for Optimal Results
Traditionally, outsourcing involved selecting the lowest cost location and many companies found themselves flying to many different locales to manage their portfolio of providers. The hybrid model gives you the same capabilities, optimized based on talent and cost, with just a single point of contact. An important consideration when looking for in a hybrid provider is that they employ a global methodology and framework for managing their clients, data, processes and employees. This provides consistency of experience throughout all locations and ensures the client will be able to easily scale and migrate resources to different locations as their needs change.

While traditional offshore locals will likely dominate IT services outsourcing due to their extensive labor pool, established infrastructure and cost structures, many nearshore outsourcing centers have developed a high level of proficiency in customer care, English language and robust IT infrastructure. These locals are closer to the U.S., so they also provide greater cultural alignment which can be an important factor when customer interaction is involved. Onshore resources provide a high level of talent and exact cultural alignment, but often come at a slightly higher cost. The key to the hybrid model is finding an outsourcing partner that is tightly aligned with your core values and goals, and will work to match those goals with the best combination of resources.

Source: ValorGlobal.com-What is Hybrid Outsourcing & Why Should You Care?

Finding the right balance between captive centers and outsourcing

Emerging technologies are changing the way companies calculate the right balance of outsourcing and insourcing
I’m sure it has not gone unnoticed by those who keep a close eye on the industry: Several large companies have announced they will set up or expand captive centers in countries like India to take on new work or, in some cases, existing work from their outsourcing partners. The companies are from a range of industries, including financial services, retail and oil, and gas.
Captive centers have long been considered a superior choice when the nature of certain work is proprietary, too complex to hand off to a third party, or requires a higher degree of control. It often means a company is weighing value over cost efficiency for a particular project or line of work.

So, does the recent move toward captive centers mean companies would rather manage the work themselves from remote locations than deal with commercial sourcing partners? Is insourcing is a new trend?

The history of offshoring

The offshoring industry first came into existence in the late 1990s when several large companies took steps to set up captive delivery centers (also referred to as global in-house centers) in Gurgaon and Bangalore. These were controlled experiments to explore “the art of the possible” before these enterprises scaled the facilities up to maximum potential. And, in so doing, they proved to themselves—and to the rest of the world—that globalizing services made the same kind of sense as the globalization of manufacturing had.

Before long, outsourcing entered its second stage as companies went in search of a reliable third-party provider ecosystem that could relieve them of management duties while delivering improved performance and productivity at a lower cost. This led to the breathtaking growth of the global services industry. The success of third-party global providers compelled the long-standing non-Indian providers to set up shop in India and the Philippines.
Meanwhile, captive centers also continued to grow in count and scale. It was clear the offshoring industry could support both captive and third-party sourcing strategies.

Finding a balance between in-house capabilities and outsourcing

Today, we are witnessing the third stage of the outsourcing industry in which companies are trying to strike the right balance between their in-house capabilities and their outsourcing contracts. Many companies have veered too far in one direction or the other—either outsourcing too many functions or trying to manage too much work via their own captive centers—and have suffered from a detrimental mix of cost, risk, value and control.

The trouble is that today the right balance is not an easy or static solution. What used to be an equation primarily based on labor arbitrage now has so many more variables at play, including cloud computing, automation and big data analytics. What might be an appropriate mix of outsourcing partnerships and captive centers this year may not provide the best outcomes in three years’ time. Industries, technologies and service offerings are changing rapidly, and no one approach will satisfy all enterprises.

All in all, these changes are positive for the industry. Service providers still have plenty of room to grow, and outsourcing buyers’ options will continue to expand. Of course, the onus will be on providers to innovate and solve complex industry problems to keep shifting the balance of their clients’ work in their favor. The more they focus on leveraging emerging technologies to solve business problems, the better positioned they will be to compete against captives.

Source: networkworld.com-Finding the right balance between captive centers and outsourcing

CIO job description: More security, more budget, more clout?

Craig Stephenson, managing director at Los Angeles-based executive search firm Korn Ferry, offers his rapid-fire take on how the CIO job description has changed over the past five years. In Stephenson’s view: The CIO’s purview keeps growing — along with the position’s clout.

For more insights from Stephenson on the changing role of the CIO, including the addition of CIOs to corporate boards, check out this companion video filmed at the recent MIT Sloan CIO Symposium in Cambridge, Mass.

How has the CIO job description changed in the last five years?

Craig Stephenson: The remit has grown, the responsibilities have increased [and] the touch points across the organization are significantly greater as well. So, if you take the operational aspects of the day-to-day to include infrastructure, resiliency, business continuity, those sorts of things, you [then] have technology strategy to include architecture and modernization efforts, where appropriate, on the digital side. You throw in data analytics, which some CIOs also have. Budgets have continued to increase, and I think it’s based on the confidence level of CIOs the last couple of years. Tenure’s up over the last couple of years. There seems to be stickiness for the function, and I think the function, in general, has actually increased in terms of importance. If they can get that customer piece down, I think they’re very well positioned.


Source: searchcio.techtarget.com-CIO job description: More security, more budget, more clout?

Outsourcing: Focus On Core Competencies

Outsourcing services is no longer a question of “should we or shouldn’t we?” but more a question of “how much should we outsource to improve performance, and with whom?” It’s about a clear focus on the core competencies of your organization, and identifying the best fit with service providers to meet your organization’s needs. Outsourcing provides flexibility and economies of scale for contracted products and services with a goal of reducing costs and improving efficiencies.

Credit: Digital Vision.

This approach requires an assessment of your current strengths and weaknesses – the core competencies and the critical skills needed to optimize performance. What is the true cost of acquiring these skills to achieve or exceed the level of desired performance? Service providers are increasingly business partners with shared responsibility and accountability for improved performance. Mergers and acquisitions in the marketplace have expanded their range of services and expertise.

Significant investments have also been made by service providers in IT platforms to expand the business intelligence that drives decisions at every level of the organization. This includes the introduction of artificial intelligence (AI) to platforms that can replicate human analysis and critical thinking. AI is a major disruptor that will provide transformational change in how FM is performed.

Best Of Breed

End users often use the term ”best of breed” to describe what they are looking for in their business partners for a wide range of products and services. It’s difficult to discuss outsourcing without invoking best of breed as a favored approach in the marketplace. Best of breed implies multiple sources of services and flexibility that enables the end user to change services and service providers to meet their changing needs.

While end users advocate “best of breed” as an a la carte approach to services, some of the biggest service providers are buying expanded expertise for a variety of services to provide a one-stop approach to meet this demand, including acquisition of benchmarking services, consultancies and more. The outcome of the service providers “one-stop shop” approach and the market’s desire for best of breed has yet to be determined.

Challenges To Best Of Breed

Multiple service providers collect information on multiple platforms that often speak their own language, making it difficult if not impossible to exchange information across companies and platforms. The lack of interoperability makes the “best of breed” approach challenging for all including the end user, often requiring considerable manipulation of data and analytics for decision making.Multiple platforms collecting data is an environment that demands standards to be effective. Common terms and definitions must be in place for this approach to provide the information needed.

Who drives the demand for standards? It’s the customer – end users who start with a requirement for standards in their RFPs. They follow them up with contracts that specify a standardized approach to collect and analyze the information derived from the data collected that transcends proprietary platforms. This approach provides multiple benefits including:

  • Effective risk management
  • Reduced operating costs
  • Competitive advantage – concentrate on what you do best
  • Single source of truth for information management

Workplace And Workforce Productivity

Outsourcing can provide a means to effectively address both the workplace and workforce productivity. Is the workplace providing the optimum environment for productivity, and does the contract provide for flexibility to address the changing needs of the workforce? Managing change and meeting expectations of an ever-evolving workforce is now a mandate in the work environment. There is more opportunity for advancement within companies and elsewhere, with top talent negotiating every aspect of their employment package. This includes the work environment whether a home-based office, remote assignment, traditional office or a blended approach.

Will these changes move the discussion more to a value-based versus cost-based approach for services? There will be continuing pressure to differentiate services and improve performance with qualitative and quantitative results. The game changer may well be end users who demand more control over their own data regardless of the platforms used.



Source:  facilityexecutive.com-Outsourcing: Focus On Core Competencies