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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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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!