Sourcing and Procurement
Current Trends in the Outsourcing Industry
Outsourcing as an industry is just a couple of decades old. The first instances can be traced to the late 80s. Since then companies have come a long way, now relying on BPOs to get most of their non-core services done (HR, Finance, Procurement and Fulfillment).
The digital business space was primarily serviced by marketing agencies carrying out digital marketing and other allied services. With the advent of platforms and programmatic, these services have been outsourced too to BPOs. Scalability and cost arbitrage helped outsourcing thrive.
Digital Transformation is the consolidated effort by an organization to transform (better organize) their business workflows to digital in order to make it faster and more effective. This can be implemented by various levers such as digitization, tech intervention etc. All these have an impact on the operations of the business as it's an org-wide initiative with impact in every department. Hence outsourcing is becoming a less preferred option.
However, today, there are three outsourcing industry trends that are driving businesses to re-look at captive models rather than outsource.
Key trends in outsourcing industry:
- Automation The process of making machines do all repeatable tasks thereby reducing dependency on humans - is a strong driver against outsourcing. This is mostly done by tech intervention which can be as basic as XL automation to something as robust as implementing a robotics platform. This ensures a decrease in headcount and creates avenues for people to diversify effort into other work areas which can give greater financial benefit to the organization.
- Data Ownership The USP of the digital medium is its measurability. A lot of data is being captured and used for various (typically) sales and marketing activities. However, the collection of this data also comes with its caveat of security and usage. With new initiatives like GDPR clients are becoming vary of data ownership in the outsourcing model. This is a primary driver to the decision making process. Owing to the above reasons, we are seeing a lot of shakeup and changes in the digital industry. Interesting times ahead.
- Outsourceability Grid As part of DBS' client-focused approach, we have created an Outsourceability grid that will help the clients view their processes or brands (in case of multiple brands) in a grid that accurately captures their stage in the outsourcing journey and helps them understand the benefits they can derive out of outsourcing. A brand or processes' place in the grid is a combination of its potential for getting outsourced and the operational challenges it currently faces. By filling up a simple questionnaire, the customer helps us gauge and measure these factors. Along with their response and some publicly available data, we configure the brand/process' place in the grid and showcase how each of them can derive benefits from outsourcing.