In my previous post on the new generation of F&A outsourcing, I talked about the industry-wide transition from complex contracts with top tier companies, to smaller contracts delivered offshore, on-shore and near-shore. This trend is corroborated by a recent report by Information Services Group (ISG) that noted that while global outsourcing activity rose sharply in the fourth quarter of 2013, the contract values fell as a result of smaller deals.
While the deals may be smaller, the expectations are not; increasingly, companies look to BPO to provide sophisticated, integrated services that reach far beyond simple cost savings.
According to ISG President John Keppel, “In this post-recessionary period, we are beginning to see changes in demand for sourcing. Used principally as a tool for exploiting rapid cost-savings potential during the recessionary period, sourcing is now being used for strategic advantage as enterprises begin to move into growth modes.”
Forward-Looking, Fully Integrated
Cost reduction is still fundamentally important to outsourcing clients. But it’s no longer enough to satisfy them, or to differentiate providers. The quest to achieve ever-cheaper labor supply by moving jobs to low-cost centers is more than outdated; it’s simply unsustainable. (Read more here: The Rise of the Machines: Don’t Worry Be Happy)
Rather than focusing on labor arbitrage, companies stand to benefit greatly by automating and standardizing operations, and incorporating fully integrated outsourcing solutions.
As Keppel points out, “Those providers that embrace automation and standardized solutions to drive down operating costs will be the ones best positioned for growth, as margins, rather than revenues, become the new benchmark for success.”
Delivering on Promise
Here at Sutherland, we have the tools, platforms and technology required to automate tasks and functions, enabling client partners to reduce human error and increase efficiency, while freeing up top talent from performing mundane tasks.
If you would like to learn more about our fully integrated services, schedule an appointment today. Comments? Questions? I’d be happy to answer.