The concept of “capability” has long been used in strategic analysis to establish defensible leadership. What are the capabilities that are being established by leading service providers and customers? How do you assess the difference between hype and substance?
Of all the jargon and buzzwords beloved of IT professionals – “the cloud”, “SaaS”, “web 2.0” and an infinity of others – “Big Data” is the most alluringly easy to misunderstand. Whilst big data systems do entail a large volume of data, the real benefits come from the speed (or ‘velocity’) of accumulation, and the array of different types of data (or ‘variety’) that are collected and analysed.
HR is one of the most commonly outsourced functions, as it involves both complex and time-consuming tasks. Outsourcing HR services can have a positive impact on an organisation, effectively saving money whilst simultaneously increasing the quality and efficiency of the company’s HR and payroll. Outsourcing results in more final output but requires lower input costs than in-house HR.
Automation is unquestionably the flavour of the month in business chatter today. Robotic process automation (RPA), and a storm of other smart automation approaches like Artificial Intelligence, are being pitched and perceived as the NEXT BIG THING, akin to the emergence of outsourcing some 30 years ago, and offshoring 15 years ago.
The traditional view of outsourcing has tended to see cost reduction as one of the primary drivers for any customer. The idea that the ‘total cost of ownership’ of a particular business function over the term of the outsourcing contract should be lower is very often part of the business case. Similarly, seeing outsourcing as a means of transforming a collection of assets on the balance sheet into a recurring service charge, and reducing (or at least apparently reducing) capital costs is another common refrain at the outset of deals.
The “invisible hand” of the market could be giving you a sharp slap more often than not, according to the Nobel laureates George A. Akerlof and Robert J. Shiller.
It wasn’t all too long ago that pricing models offered by information technology outsourcing (ITO) services and firms fell strictly into the “static” category. In fact, thinking of these agreements as anything but fixed or rigid in nature simply didn’t make much sense based on the layout of the outsourcing landscape. Customers requested a certain type of IT or software development and service providers fit this requisition into an inelastic pricing structure that had little room for change or adaptability.
Robots hit the headlines over many national and industry outlets this week. The clincher statistic, as reported by Bloomberg, The Times, and most of the international press, is that over five million jobs will be lost by 2020 as a result of developments in artificial intelligence, robotics and other technological change.
As we enter a new year, it’s always fun to gaze into our crystal balls and anticipate the key trends and forces that will shape our industry in the coming year. Granted, given the pace of change and disruption that has come to characterise the outsourcing space, the business of prognosticating is becoming an increasingly risky one. That said, here are some thoughts and observations – in no particular order – from Alsbridge regarding what to expect in the coming twelve months.