Key outsourcing trends you have to know

 

According to an Economist article from 2018, outsourcing accounts for 6 per cent of GDP in America, 11 per cent in France and 16 per cent in the Netherlands.

In the U.K. the reputation of outsourcing took a huge hit last year when one of its giants - Carillion - collapsed overnight. It intensified a debate on whether the old concept of outsourcing has run out of steam.

Efficiency is key

An EY study, states that cost savings are now a given factor when it comes to outsourcing deals. Increasingly companies are looking for business partners, to evolve and drive efficiency and development in bigger ways.

One of the growing trends of outsourcing is that, as organizations build trust with their providers, parts of the business that were once considered too core to outsource, will begin to move to providers.

This especially goes for second-generation outsourcers that feel comfortable outsourcing non-core tasks to specialised service providers they know they can trust.

Single or multiple service providers?

Outsourcing services to multiple providers can cause double-work and lack in transparency in who is doing what or who is responsible for what.

Splitting services across multiple providers can also make it more difficult to achieve cost savings due to lack of integration and in the long-term, it could also slow down change management because parts of service delivery are disparate.

Conversely, working with an Integrated Facility Service provider the responsibility of all supporting service functions is in the hands of the outsourcing partner.

The Integrated Facility Service provider manages all service deliveries, administration, training, operational management, integration, innovation and provides strategic support to the client organization.

This means that instead of having several external service partners working with various service deliveries, everything is integrated into one solution.

This gives rise to economic benefits and cost-efficiencies, due to multitasking of employees, integration of back-office functions, volume discounts, training volumes, and so on.

The future looks disruptive

There may be uncertainty over the future of outsourcing but there are success and visionary stories.

A Deloitte report and survey published last year claimed that "traditional outsourcing was dead" and a "disruptive outsourcing model" driven by cloud and automation was emerging.

Most respondents (out of 521 leaders from organisations of all sizes across America, Asia and Europe) to the Deloitte survey agreed that they had to change their outsourcing strategy.

This is taking place now as organisations embrace disruptive solutions.

In the Deloitte survey 93 per cent of leaders are considering or adopting cloud solutions, for instance.

The old outsourcing model was typically used to improve back-office operations through cost reduction and performance improvement.

Now, the model is changing and competitive advantage is on the rise, as more providers vie to become increasingly agile, flexible and sophisticated in technology - a trend that looks set to intensify in the future.  

Would you like to learn more about The Future of Outsourcing? Download the ISS White Book: The Future of Outsourcing now!