Live from Outsourcing World Summit 2017 - The Evolution of Outsourcing


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At Outsourcing World Summit 2017, the ISS CMO and Head of Group Marketing at ISS, Peter Ankerstjerne, presented together with David Brown, Prinicipal and Global Lead, Shared Services and Outsourcing at KPMG, Senior Director of Global Real Estate at GoDaddy, Calvin Crowder and Harpreet Duggal, Senior Vice President and Genpact - The evolution of Outsourcing - or what is it going to look like tomorrow.

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  • Introduction of people on the stage - Peter then to introduce client and either let them talk a bit about themselves, or Peter gives the background. Additionally state the purpose for them being on stage – maybe a brief on how Go-Daddy is looking at the outsourcing landscape and how digital labor fits into their strategy. Just a couple of minutes as we will dive in more details throughout the session.
  • Peter and Dave to frame the session with the discussion related to the title of the section –
    Join the conversation around the changing landscape of service delivery models, sourcing, automation and talent management. Weigh in on what the future workforce is going to look like and what companies should be planning to embrace the enabling technologies that will change them.
    Peter to take this slide and the details and drive the discussion around the landscape of service delivery models and Sourcing.

  • Peter to talk that in order for this to work these will need to be the key to future success
    Calvin should at this point discuss his involvement with outsourcing providers and how that relationship has changed and how he sees it changing over time.
  • Peter – I kept this in if you want to continue the discussion with Calvin around sourcing approaches. (I also left the notes from your previous session)


    Outsourcing is evolving, manifesting in different ways in order to accommodate new market needs and the growing complexity of the challenges that will continue to face businesses in the future.

    Each emerging approach is situated along the service provider relationship spectrum with varying levels of engagement and vested interest. On the one hand, service provider relationships will be increasingly characterized by a collaborative approach, and on the other hand, they will be driven by a demand for informal, yet practical and pragmatic solutions that are more transactional in nature.

    They do not represent well-defined, existing models in practice, but rather, emerging approaches to outsourcing that are gaining traction towards 2025, in some industries more than others. They are indicative of how the outsourcing market continues to develop, primarily from a relationship perspective.

    Buyers will be increasingly required to evaluate more thoroughly the extent to which and manner in which they want to use outsourcing

    Emerging sourcing approaches:

    1. Crowd sourcing describes the process of obtaining needed services and solutions by soliciting contributions from a large group of people through 3rd party platforms, rather than from in-house employees or service providers.

    2. Solution sourcing is a form of B2B crowd sourcing, where client organizations solicit solutions from a large number of external service providers, placing a strong emphasis on value-based business outcomes.

    3. Network sourcing is outsourcing that is centered around networks:
    - purchasing networks are business consortiums of two or more independent organizations that come together, either formally or informally, or through an independent third party, for the purpose of joining their individual requirements for purchased services to leverage more value-added pricing, service, and technology from their external service providers than could be obtained if each organization purchased the services alone. Here, purchasing networks buy services from a single service provider.
    - service provider networks are formal or informal business consortiums that give members the ability to leverage a community of industry professionals and experts to help solve any technical or business challenges they are facing in building their business, or meeting increasingly complex demands of client organizations. The ability to quickly and easily tap into a network of peers offers members unique insights and tools, and access to skills and resources. Here, single client organizations buy services from a network of service providers.
    - network to network (N2N) interactions occur when the two consortiums described above engage in the purchase and provision of services.

    4. Co-sourcing is a long-term, one-to-one business arrangement where a business function or functions are maintained through a combined effort by internal and external partners, both with a mutually vested interest in the outcome of the collaboration.

    5. Mesh sourcing represents a highly collaborative, networked eco-system approach to outsourcing and service provision – business interests and operations are meshed across several organizations to the extent that there is no longer a distinction between outsourcing and standard business practice.

  • Dave to introduce slide as the top trends for 2017 for the outsourcing space based on Organization discussion.
    Dave to ask Harpreet what he sees from the outsourcing perspective on the biggest initiatives that Genpact is being asked by their clients.
  • Dave to tie this up and discuss the impact that technology is having on the market and tie this into the impact that it is having on Outsourcing. This is the second highest trend we see for 2017
  • Dave and Peter – Another piece of research that drives the C-Suite needs and how outsourcing is adopting to meet this.
    Peter to ask Calvin about his partnership with service providers to address these areas.
    Dave to talk with Harpreet about how this is impacting Genpact and their relationships with clients.
  • Audience Participation - Ask a question to the audience – (show of hands – not polling). How many in the audience have started deploying Class one (RPA) solutions, Class two (Machine Learning), Class three (Cognitive). Peter and Dave to discuss the show of hands.
  • For all participants.
    Start with Calvin and have him talk about what the future of outsourcing means to them at GoDaday
    Harpreet what is the impact on skill development specifically at Genpact and your clients.
    Peter and Dave to discuss how they work with other clients to drive the Human Side.

    To understand an organization’s workforce of the future it is important to analyze the business strategy and current workforce performance. This includes looking at the impact of cognitive and robotic technologies, partnerships with service providers and an organizations overall skill development/vision.
  • Summary – How do you manage this Change or What is the biggest benefits of Digital Labor – slide on biggest concerns companies have about automation
    Ask the audience to give a show of hands for each of the risks on the slide.
    Then show the results from our study.
    All four talk through the risks one by one and talk through examples.
    Peter and Dave to summarize (Slide will be provided – Beyond the Bot)
    What are the key takeaways that companies need to consider when they are deploying an automation strategy.
    (5 things – included on the slide) Peter and Dave to talk to each one – all four to react with an example as needed.
  • Live from Outsourcing World Summit 2017 - The Evolution of Outsourcing

    1. 1. JW Marriott Hill Country San Antonio, Texas February 19-22, 2017 The evolution of outsourcing: Or what is it going to look like tomorrow?
    2. 2. © 2017 IAOP. All Rights Reserved. Introductions Peter Ankerstjerne CMO and Head, Group Marketing | ISS World Services A/S David Brown Principal and Global Lead, Shared Services and Outsourcing l KPMG Calvin Crowder Senior Director, Global Real Estate | GoDaddy™ Harpreet Duggal Senior Vice President l Genpact
    3. 3. © 2017 IAOP. All Rights Reserved. The future of outsourcing More lean and flexible, often with shared goals and risks Fewer defined commitments between employees and employers Closer to core business areas More agile and flexible organizational structures Sourcing reasons Sourcing areas Sourcing arrangements Sourcing impact on employees
    4. 4. © 2017 IAOP. All Rights Reserved. Critical success factors Speed is of the essence Cost effectiveness & documentation is (still) critical Trust as an asset Transparency forevermore “KISS” wins
    5. 5. © 2017 IAOP. All Rights Reserved. Emerging options Network Sourcing Mesh Sourcing Crowd Sourcing Solution Sourcing Co-sourcing “WHAT’S IN IT FOR WE?” “Perverse Incentives”
    6. 6. © 2017 IAOP. All Rights Reserved. Top 2017 user organization initiatives 22% 25% 26% 30% 22% 39% 54% 31% 56% 72% 18% 20% 20% 28% 28% 34% 38% 38% 60% 67% Shift back-office operations offshore/into lower cost markets Optimize global supply chains Engage in M&A or divestitures Find, attract and retain talent globally Improve global governance capabilities; reduce global risk exposure Deliver new/innovative products and services into the market; increase/improve R&D Redesign/re-engineer core business processes Optimize global service delivery channels; excel at global business services Invest in new/improve information technology Continue to drive down operating costs 2016 2015 Source: KPMG 2016 Q4 Pulse Survey
    7. 7. © 2017 IAOP. All Rights Reserved. Transformation is happening fast “Our view is ‘transform or wither,’ ‘transform or lose pace’.We take the perspective that the concept and the execution of transformation are never complete, because the marketplace changes, and so do the needs of our clients and customers — and the digital era just accelerates all of that.” Catherine Bessant, Global Technology & Operations Executive, Bank of America Percent of US-based companies undergoing business model transformation* *KPMG CEO survey As a service economy, i.e., Platform as service 25% of the world’s energy needs are set to be met by renewables in 2020 Virtual assistants Cognitive computing and machine learning Trends in TechnologyTransformation The rise of robots will lead to a net loss of over 5 million jobs in 15 major developed and emerging economies by 2020 One in three jobs will be converted to software, robots and smart machines by 2025 65% of today’s grade school children will be employed in jobs that haven’t yet been invented Trends in EmploymentTransformation
    8. 8. © 2017 IAOP. All Rights Reserved. How critical are the following C-Suite directives to your operations strategy? The C-suite is responding with new imperatives Source: HfS Research in Conjunction with KPMG, “State of Operations and Outsourcing 2017” Sample: n=454 Enterprise Buyers 20% 22% 24% 26% 29% 30% 31% 31% 42% 48% 46% 38% 55% 50% 45% 48% 48% 43% 19% 19% 17% 13% 17% 20% 15% 15% 8% 12% 12% 21% 5% 4% 5% 6% 6% 7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Invest in cognitive technologies and machine learning to reduce reliance on mid/high skilled labor Invest in process automation and robotics to reduce reliance on low-skilled labor Policies that restrict the hiring of people Improve the quality of operations talent Scalable / Flexible services Accelerate speed to market with new products Create real-time data that supports predictive, not reactive decisions Align middle/back office operations to improve customer experiences Drive down operating costs Mission Critical Increasingly Important Emerging Not a Directive
    9. 9. © 2017 IAOP. All Rights Reserved. Use of intelligent automation 15% 40% 29% 14% 30% 33% 24% 15% 43% 67% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cognitive automation Enhanced process automation Basic process automation No activity Self-education and planning Experimenting and running pilots Live implementations
    10. 10. © 2017 IAOP. All Rights Reserved. Organizational and people impacts Changing Behaviors Adopting and adapting the new ways of working Changing Perception Overcoming the fear factor Organizational & People ImpactsLeadership Vision Agreeing on future state vision for the organization Talent Pipeline Hiring, reskilling and exiting talent Culture Shift Need for agility and innovation
    11. 11. © 2017 IAOP. All Rights Reserved. Benefits of applying digital labor Cost Reduction • Enables opportunity to better manage labor costs • Decouples correlation between labor and revenue growth • Reduce need for seasonal labor force (during busy seasons etc.) Process Improvement & Efficiency • Leverage digitized process data to increase visibility & continuous improvement • Enable resources to focus on higher value- added activities • Lower the cost & risk associated with employee turnover Speed Privacy & Compliance • Limits human exposure to sensitive corporate data • Reduce human error in compliance tasks • Increase security & governance tasks without adding new human labor Quality & Accuracy • Reduce quality issues associated with manual data entry • Deploy new “no-labor” data integrity routines • Reduce the need for re- work • Can perform tasks 365 days a year at 24/7 availability • Accelerate completion rates certain tasks, compared to human labor • Rapidly scale up / scale down for changes in transaction volumes
    12. 12. © 2017 IAOP. All Rights Reserved. Outsourcing talent maturity Do you agree that your primary service provider has the right talent to do the following? ProviderTalent 19% 19% 20% 20% 20% 21% 23% 36% 42% 41% 44% 42% 43% 43% 35% 32% 31% 29% 30% 29% 27% 7% 6% 6% 6% 6% 6% 7% 2% 1% 2% 1% 2% 2% Contribute / align with corporate business strategies Improve quality of customer engagement Manage internal operating costs Manage productivity / operating efficiency Drive innovation into services Address requirements of digital technologies Increase scope or scale of outsourcing and shared services Strongly Agree Agree Neutral Disagree Strongly Disagree HfS Research in Conjunction with KPMG, State of Business Operations 2017 N=454 Enterprise Buyers
    13. 13. © 2017 IAOP. All Rights Reserved. What does the future look like? Closer collaboration with the client organization on larger and more strategic projects, delivering more value-added services and solutions Engagement in collaborative arrangements as consultants (not just service providers) Knowledge exchange will be a major enabler of innovation
    14. 14. JW Marriott HillCountry San Antonio,Texas February 19-22, 2017 Thank you!