Insurance:<\/strong> New compliance measures (Solvency II, ObamaCare) causing unprecedented administrative cost and workload; Shortage of risk analysts and actuaries to take on the higher level work.<\/p>\nThere are just a few examples of major industries, being shaken to their very foundations, where we can discuss secular shifts driving unprecedented demands on organizations to remain competitive. HfS believes it is no coincidence that it is these industries that are today the most aggressive with embracing third-parties to redefine their global operations?\u00a0 Secular changes drive bolder, more radical behaviors, and it is already clear that a more aggressive approach to outsourcing is high on these organizations\u2019 agendas.<\/p>\n
Industries that have already experienced much of their secular changes in the past are more focused on investing in shared services frameworks<\/span><\/p>\nThese businesses are typically reactive to market conditions and often radical long-termism doesn\u2019t fit as well with their mentality, especially when faced with uncertain times ahead. In addition, many of them have already shaved their operating costs to the bone, hence digging out new productivity benefits via outsourcing is often challenging \u2013 and mistakes can prove fatal in a low-margin business.<\/p>\n
\u00bb\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Industries such as retail<\/strong> and manufacturing<\/strong>, one can argue, have already been through their secular shifts over the last three decades or more.\u00a0 While they have had to experience much fundamental change, for example mass globalization of markets and volatile changes to consumer spending behaviors, the very essence of these industries is still the same \u2013 their organizations are focused on inventory management and supply chain optimization, maintaining operating margins and accurately predicting demand. \u00a0To them, outsourcing has always been an option, and has been readily explored over the years to find more pennies to save. So while economic conditions may have been vicious, focus on short-term cash-flow has clearly been the priority for many in these sectors, and radical overhaul of operational infrastructure clearly not an attractive option.<\/p>\n\u00bb\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Utilities<\/strong> are also proving to be more conservative with outsourcing, with a strong shared services focus.\u00a0 While many of the large utilities organizations have been among the earlier adopters of hybrid outsourcing and shared services models, many of them have not felt such secular change as many of those industries that were more dramatically impacted by the 2008 crash and many of the fundamental shift mentioned above.<\/p>\n\u00bb\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 While there are many active outsourcing engagements \u2013 both existing and new – in telecom <\/strong>and wireless<\/strong>, HfS sees more these engagements as relative small in scope as these firms opt for more incremental, conservative ventures into outsourcing.\u00a0 For example, several major telecom firms are evaluating smaller BPO initiatives in areas such as sourcing and transactional accounting, and still prefer to engage in several smaller multi-vendor engagements in the ITO space.<\/p>\nHence, it\u2019s no surprise that these organizations are more conservative with their long-term operational planning.\u00a0 Moreover, many have proven to be heavy outsourcing adopters in the past, and we expect these sectors to remain focused on maintaining their outsourcing initiatives, but with a large proportion opting for a more reserved approach, with increased focus on improving, and in some cases expanding, their internal shared services competencies.<\/p>\n
The Public Sector: Facing up to unprecedented challenges<\/span><\/p>\nOne industry which is going through more secular change than any today is the Public Sector<\/strong>.\u00a0 Quite simply, national and local government bodies are under unprecedented pressures to drive austerity measures and make long-term plans to drive new productivity programs.\u00a0 This explains why 55% of public sector bodies actually foresee some moderate increase in outsourcing activity over the long-haul.\u00a0 Huge political bodies, such as the US Navy, NASA, the UK Inland Revenue and National Health Service \u2013 and even the FBI \u2013 all outsource elements of their operational support functions to varying degrees. With increased onshore delivery resources becoming available from several providers, this could well turn out to be a surprisingly large growth sector for outsourcing.<\/p>\nThe Bottom-line: New fundamentals are creating new rules to manage one holistic and comprehensive outsourcing and shared services strategy<\/span><\/p>\nOutsourcing is entering a new era \u2013 one where organizations can no longer afford to ignore its benefits. As these radical and secular changes to many of our core industries take hold, business leaders simply cannot overlook the competitive advantage outsourcing offers: enabling them to focus on developing competitive advantage.\u00a0 These secular shifts are threatening the survival of many businesses, but at the same time are opening up major opportunities to build smarter, more globalized and leaner organizations. Business leaders can no longer afford to cling to many of the methods of yesteryear to steer their organizations, and this data points to a more bold, radical approach to embrace the benefits of global sourcing.<\/p>\n
However, most smart organizations are no longer evaluating shared services and outsourcing strategies in silos; while these initiatives are singularly successful at providing benefits to that individual function, our research has shown that these initiatives have failed, in many situations, to improve comprehensively the broader corporate strategic objectives of these organizations.<\/p>\n","protected":false},"excerpt":{"rendered":"
Our recent State of Outsourcing study, conducted with the Outsourcing Unit at the London School of Economics, has revealed that…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,81,832,830,842,837],"tags":[303],"organization":[],"ppma_author":[19],"class_list":["post-1398","post","type-post","status-publish","format-standard","hentry","category-business-process-outsourcing-bpo","category-it-outsourcing-it-services","category-sourcing-best-practises","category-sourcing-change","category-state-of-outsourcing-2011-study","category-the-industry-speaks","tag-enterprise-irregulars"],"yoast_head":"\n
Which industries are more inclined to outsourcing versus shared services? - Horses for Sources | No Boundaries<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n