Perspectives

Avoiding the common pitfalls of outsourcing

Increase effectiveness of outsourcing agreements by balancing focus on contractual elements, and human capital and organizational elements.

Perspectives

Automate this

Both Robotic Process Automation (RPA) and Intelligent Automation (IA) have the potential to make business processes smarter and more efficient.

Analysis

Global outsourcing survey 2016

Step on it! Outsourcing makes a beeline toward innovation

The use of outsourcing is accelerating even as it radically reinvents itself to keep pace with changing technologies that enable outcome based business services. The quest to drive business value through outsourcing was once focused on cost-cutting—and this will remain a key motivation—but the results of Deloitte’s global outsourcing survey 2016 indicates that outsourcing is becoming a vibrant pathway for driving innovation into the enterprise.

Outsourcing accelerates forward

Our analysis of the global outsourcing survey 2016 indicates that the market for outsourced services will likely continue its rapid adaption to meet—and in many cases to anticipate—the demands of the customer. While the regulatory environment has changed quite significantly for some industries since our 2014 survey, there is still significant strength in the outsourcing market.

Today, customers are expecting innovative services from their managed service providers, especially since improvements from labor arbitrage and process improvement have largely been achieved. These transformational requirements are facilitated by advancements in technology and corresponding process shifts. Value, rather than cost, is the new watchword, and will likely be measured by how service providers help empower business growth through innovation. Our analysis of this year’s survey reveals key insights that will affect both customers and managed service providers alike going forward.

Key survey findings

More than one-third (35 percent) of survey respondents say they already measure the value of innovation in their outsourcing relationships. In response to the increasing emphasis on delivering value beyond cost savings, service providers are rapidly evolving into innovation centers with the aim of creating improvement opportunities for their clients.

Some companies, for instance, look to their service providers to help them capture and integrate marketplace advances, such as tapping creative methods for improving quality and enhancing the user experience, to propel competitive advantage at a velocity they could not otherwise achieve by themselves. The savviest organizations use their providers to help them find, filter, and manage the many transformative products and services the marketplace invents to improve business performance.

Disruption in the form of cloud-based services is just the start: we are on the verge of an entirely new model of service delivery comprising robotic and cognitive process automation, the “internet of things,” and digital IT management. This intersection of traditional outsourcing and the innovation storm could amplify value for those organizations that can correctly harness it, and this will likely lead to ever increasing uses of outsourcing, even as it reinvents itself.

To further explore the intersection of outsourcing and innovation and to learn more about the 2016 findings, download the infographic.

View the global outsourcing survey infographic

More topics

Services

Service Delivery Transformation

Outsourcing. Offshoring. Shared services.

John R. Tweardy

Information Technology Outsourcing Advisory Leader

Jean White

Leader | Service Delivery Transformation

Simon Tarsh

Outsourcing Advisory Services Leader

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