What Changed? - Outsourcing

Please see below selected pre-2017 intelligence about outsourcing. This is a synthesis of major recent developments at competitors, business schools, thinktanks, media, commentators, and other key influencers in our external environment. New content is in bold.

 

May 2016

 

• According to McKinsey's 'Offshore Centers Can Offer More than Low Costs', published in the Harvard Business Review, offshore centres can create opportunity along four dimensions: 1) rapidly scaling up and establishing business decision support capabilities (e.g., pricing, consumer analytics); 2) realigning operating priorities to own and manage end-to-end processes in order to deliver superior end-customer experience; 3) identifying opportunities in the operations that impact top-line growth by extending services to new segments or building new services for the enterprise; and 4) continuing to push the envelope on cost efficiencies and productivity.

 

 

• Deloitte was recognised in The World’s Best Outsourcing Advisors for 2016 as ranked by the International Association of Outsourcing Professionals® (IAOP), which acknowledged Deloitte's deep experience and knowledge in Finance, Human Capital, IT and other frequently outsourced functions, as well as its ability to help organisations throughout the outsourcing and shared services lifecycle. Deloitte was additionally recognized for Sustained Excellence, acknowledging its presence on the list for six consecutive years. Deloitte earned perfect scores, and distinction as the Top Company, in three out of five major judging categories, including Programs for Innovation, Programs for Corporate Social Responsibility, and Customer References. It additionally earned distinction as the Top Company in the categories of Size & Growth and Awards & Certifications.

 

 

March 2016

 

• A new report contained data on trends in US reshoring and FDI (Foreign Direst Investment) by companies that have returned or added new US production from offshore. The combined reshoring and related FDI trends continued strong in 2015, adding 68,000 jobs and bringing the total number of manufacturing jobs brought from offshore to over 249,000 since the manufacturing employment low of 2010.

 

 

• Computer Weekly reported on KPMG taking more IT jobs offshore to India, explaining that KPMG is moving more of its UK IT team to India as it expands its agreement with Indian IT services firm Tata Consultancy Services. The company currently only has plans to cut contract staff in the UK. The latest move sees the firm increase its India-based IT team to 150 from 125. It will be almost the same size as the UK IT department, which has 155 staff. The remaining technical jobs are in the process of knowledge transfer, with Indian staff currently being trained in the UK.

 

 

 

January 2016

 

 

• India is still the number one country for business process outsourcing, followed by China and Malaysia, according to A.T. Kearney’s Global Services Location Index. In its latest Index, the consultancy explored the best value for money, talented and business friendly locations for outsourcing services, allowing companies to reduce costs for often repetitive and costly services.

 

 

• Raconteur published an infographic on the 10 new destinations for outsourcing, including Brazil and Malaysia.

 

 

 

December 2015

 

 

• Outsourcing is getting a makeover. No longer does a mere mention immediately conjure up images of call centres in faraway lands; rather outsourcing is increasingly showing its potential to provide value to businesses and boost the economy. Raconteur's new report mapped 10 top outsourcing destinations, including "nearshoring". It also examined the impact of robotic automation on the business process outsourcing sector and the selling power of added-value services.

 

 

• Meanwhile, a number of countries are catching up India and other traditional outsourcing destinations. Here is Raconteur’s pick of the newcomers.

 

 

 

November 2015

 

 

• KPMG’s recent piece, Bots in the Back Office: The Coming Wave of Digital Labour, explored the ‘withering’ BPO industry. KPMG’s report said, “The concept of labour arbitrage as the primary value lever of business process outsourcing (BPO) is dying. The geographic discussion is giving way to automation."

 

 

 

October 2015

 

 

• AJ Galdeano Consulting joined Ernst & Young, the EY member firm in Brazil, to expand its tax services, focused on accounting compliance and reporting as well as business process outsourcing. AJ Galdeano’s capabilities span accounting, treasury, tax and payroll functions to complement EY services offered across the Americas. AJ Galdeano will become part of the EY Brazil Global Compliance and Reporting team, adding 61 professionals in Sao Paulo and Rio de Janeiro while continuing to serve its 34 legacy clients including public companies, large multinationals and fund management firms.

 

 

 

September 2015

 

 

• Over the past decade, Poland, Bulgaria and Romania have sought to stem their brain drain and boost investment by offering accountancy and administrative services to companies based elsewhere. Services range from transactional, purchase-ledger and bookkeeping to audit and even debt collection. The trend is likely to gather pace, as offshore centres emerge in places such as the Philippines and Sri Lanka, offering greater scope in terms of timezone flexibility and wage costs, claimed the Financial Times.

 

 

 

 

April 2015

 

 

• KPMG International received top performer ratings for its shared services and outsourcing advisory capabilities on the International Association of Outsourcing Professional’s (IAOP) 2015 World’s Best Outsourcing Advisors list. Using a rigorous methodology that scored applicants on size and growth, delivery excellence, and programs for innovation, the independent judging panel – which includes IAOP buyer members – granted KPMG the highest possible rating for delivery excellence and size/growth, and a distinguished rating for its cross-client innovation programmes.

 

 

 

March 2015

 

 

• Over four fifths (83%) of senior outsourcing buyers say they have experienced innovation in their outsourcing relationships. More than four fifths (82%) also believe their current outsourcing suppliers actively encourage innovation and ideas, according to new data from sourcing advisor, Aecus.

 

 

• PwC’s Brazilian practice has sold its thriving outsourcing business to Dutch business services group TMF. The move to acquire Apriori is part of the group’s strategy to increase its representation in South America and to tap into the Brazilian outsourcing market which has been growing at around 6.5% a year.

 

 

• New PwC research suggested that organisations are increasingly looking to global markets for outsourcing as a means of reducing costs and increasing efficiencies. In order to receive assurance over their vendors’ operations, companies are demanding SOC (Service Organisation Controls) reports prepared by independent auditors.

 

 

 

February 2015

 

 

• The UK Quarterly Outsourcing Index, an in-depth examination of outsourcing practices in the UK, found the revived demand for repatriation and UK outsourcing was due to a “growing demand for multichannel customer services”, which was a common thread in 62% of contracts in 2014 compared with 40% in 2013. 

 

 

• For the tenth consecutive year, Accenture was named to the 2015 Global Outsourcing 100 list by the International Association of Outsourcing Professionals. The Global Outsourcing 100 is an annual listing of the world's best outsourcing service providers. The list is designed to serve as an essential reference for companies seeking new and expanded relationships with the best companies in the industry.