Time to re-evaluate your outsourcing partner

Traditional outsourcing lacks Innovation

Businesses are getting remodelled rapidly with democratisation of decisions, overwhelming innovation in technology and digitisation, abundance of information, increasing power to customers – making traditional model of outsourcing based on time and effort applied is becoming redundant. However, companies are still managing their work in the same manner like a decade earlier using this obsolete outsourcing model. This means the service providers are unable to provide a cost advantage in the long run.

In an already crowded market, service providers today are facing tough competition  owing to price, increasing labour cost in countries like India and Philippines and little or no differentiation in the service has made vendors to look for companies that can provide innovative ways to manage the transactional work and at the same time help them in moving ahead in the value chain.

Presently, 49 percent of enterprise buyers anticipate to move to a “wide-scale transformation of business processes enabled by new technology tools/platforms” in just two years according to a KPMG study. This may be a fantasy for some enterprises, but one thing is sure that many of those operations leaders are failing to steer their enterprises away from legacy delivery models will get cast aside quickly in today’s tolerance-diminishing business environment.

However, Digital technology has made it indispensable for these companies to create a pay as you go/pay per use model. Right implementation of digital technology will completely automate the work or eliminate the work. In the same study, it was noticed that two-thirds of enterprises are falling behind in “digital” areas due to lack in the internal skills to change processes, automate them, analyse them, or come up with ingenious thinking on how to improve operations. Analytics and process automation technologies have emerged as critical technologies to drive better outcomes for clients. Close to half of buyers now see these two technologies as adding significant value in their outsourcing engagements.

Outsourcing providers need to evince their clients that they can provide more than just staff augmentation, meeting cost reduction goals and providing basic operational support. The new latent and unsaid directive requires them to be in a strategic partnership with their clients in an attempt to add valuable and niche skills, technological support & innovations and enhance analytical competence for their clients.


Author:  Debaleena Debnath
Debaleena is a digital media consultant @ speradigital.
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