Points of View

Databook: The State of Outsourcing in 2011

The State of Outsourcing Study was distributed in an online format to a broad community of business and IT services industry stakeholders during July 2011, which included buyers, service providers and consultants.  The networks included the HfS Research community, of more than 60,000 subscribers and 120,000 regular web-visitors (www.horsesforsources.com and www.hfsresearch.com), the Sourcing Interests Group (www.sig.org), in addition to readers of Outsource Magazine (www.outsourcemagazine.co.uk), and SpendMatters (www.spendmatters.com). 

Respondents, incentivized by a free copy of the report findings, voluntarily submitted their answers on an online questionnaire that captures only one response per unque computer ID.  The responses of 1538 Buyers, Providers and Advisors of Outsourcing Services were received over the months of July and August 2011.

The results have proven that the initial goal of outsourcing – to drive out cost – has succeeded with flying colors.  However, the findings also point out that the sequential business needs that need to be addressed are falling short.  Providers cannot afford their clients to struggle.  After their transition to a working operational outsourcing model, corporate leadership isn’t going to keep reminding their shareholders about “that stellar 30% we took off the bottom-line three years ago.”  They are going to be looking for their next improvement metric.  And the only way to achieve that is to constantly look at harmonizing the process and enabling it with better technology.Outsourcing should provide an opportunity for buyers to take advantage of the talent acumen and IP their provider can deliver.  If buyers really do care about continuous improvement, then they will seek out a services partner who can prove – through multiple client experiences – that they have the discipline, culture, and motivation to work with them over the long-haul.

Outsourcing would appear to be entering a new era – one where organizations can no longer afford to ignore its benefits. Moreover, 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. 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. As we venture into unprecedented times of uncertainty that are bringing new challenges, 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.

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