Future of Sourcing - Survey https://futureofsourcing.com/tags/survey en What Procurement Pros Need to Know About Trends in Marketing Spending for 2020 https://futureofsourcing.com/what-procurement-pros-need-to-know-about-trends-in-marketing-spending-for-2020 <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/2020%20Marketing_Budgets_Sarah%20Scudder.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/2020%20Marketing_Budgets_Sarah%20Scudder.jpg" title="What Procurement Pros Need to Know About Trends in Marketing Spending for 2020" class="colorbox" rel="gallery-node-1639-Jy6qvngyDv4"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/2020%20Marketing_Budgets_Sarah%20Scudder.jpg?itok=y0Y3z1LB" width="624" height="325" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div>With the fourth quarter of 2019 now underway, many companies have already started developing their marketing plans for 2020. A major aspect of the planning process will be setting the overall marketing budget for next year and allocating the budget across marketing channels, tactics and other spending areas.</div> <div>&nbsp;</div> <div>Ideally, marketing procurement professionals will be involved in the planning process and to participate effectively they will need to have a solid understanding of current marketing trends, including those relating to marketing spending.</div> <div>&nbsp;</div> <div>Three recent research studies provide important insights about how marketers have been spending their budget and where spending may be headed in 2020.</div> <div>&nbsp;</div> <div>&bull; <a href="https://cmosurvey.org/results/" target="_blank">The CMO Survey (August 2019)</a> by Duke University&rsquo;s Fuqua School of Business, the American Marketing Association and Deloitte</div> <div>&nbsp;</div> <div>&bull; <a href="https://www.gartner.com/en/marketing/research/cmo-spend-survey-2019-2020" target="_blank">The Annual CMO Spend Survey 2019-2020 (October 2019)</a> by Gartner, Inc.</div> <div>&nbsp;</div> <div>&bull; <a href="https://www.bdo.co.uk/en-gb/insights/industries/technology-media-and-life-sciences/martech-2020-and-beyond" target="_blank">Martech: 2020 and Beyond (October 2019)</a> by WARC and BDO (with interviews by the University of Bristol)</div> <div>Collectively, these studies identify three macro spending trends that marketing procurement professionals need to keep in mind for 2020.</div> <div>&nbsp;</div> <div> <h2>Marketing Budgets</h2> </div> <div>The research indicates that marketing budgets in 2019 have been relatively healthy, and marketers are generally optimistic about the prospects for marketing spending in 2020. The CMO Survey found that current (2019) marketing budgets, on average, represent 9.8% of company revenues, up from 7.3% in the August 2018 edition of the survey. On average, respondents expect their marketing budget to increase by 8.7% in the 12 months following the survey. While this doesn&rsquo;t cover all of 2020, it indicates that marketers expect budgets to grow during the first part of next year.</div> <div>&nbsp;</div> <div>Gartner&rsquo;s CMO spend survey found that 2019 marketing budgets will average 10.9% of company revenues, down from 11.2% in 2018. Gartner&rsquo;s survey also found that most CMOs are confident about budget growth in 2020. Sixty-one percent of the respondents expect their marketing budget to increase next year.</div> <div>&nbsp;</div> <div style="margin-left: 40px;"><strong>Key Procurement Takeaway</strong> &ndash; Most marketers are naturally optimistic, and therefore the expectations for budget increases next year may be a little overdone. In its survey report, Gartner observed that many economists have noted that global economic growth is slowing and is likely to remain slow in 2020. So, marketing procurement professionals should prepare for some level of marketing budget uncertainty in the coming year.</div> <div>&nbsp;</div> <div> <h2>Technology Spending Remains Robust</h2> </div> <div>Marketing has become increasingly dependent on technology over the past several years, and that is not likely to change in 2020. Therefore, spending on marketing technology is likely to remain robust next year.</div> <div>&nbsp;</div> <div>Gartner&rsquo;s CMO spend survey found that on average, marketers are spending 26% of their total budget on technology. To put this in perspective, the survey indicates that on average, marketers are spending as much on technology as they are on media, and they are spending more on technology than they spend with agencies (26% vs. 22%)</div> <div>&nbsp;</div> <div>In the WARC/BDO survey, respondents from North American companies reported spending 30% of their 2019 marketing budget on technology.</div> <div>&nbsp;</div> <div style="margin-left: 40px;"><strong>Key Procurement Takeaway</strong> &ndash; For most of its history, much of the conversation about marketing procurement has focused on its role in sourcing agency services and managing agency relationships. This is understandable because in many larger enterprises, agencies have traditionally represented one of the largest components of external marketing spend. Over the past few years, however, spending on marketing technology solutions has grown to rival agency spending in importance. Therefore, if they haven&rsquo;t already done so, marketing procurement professionals will need to become proficient at sourcing technology solutions, particularly cloud-based SaaS solutions.</div> <div>&nbsp;</div> <div> <h2>Social/Mobile Still on a Roll</h2> </div> <div>Spending on social media and mobile marketing is likely to continue growing in 2020. The CMO Survey found that on average, marketers are currently spending 11.9% of their total budget on social media marketing, and survey respondents expect that percentage to increase to 15.3% of the budget over the 12 months following the survey.</div> <div>&nbsp;</div> <div>According to The CMO Survey, spending on social media has grown steadily since 2009 even though survey respondents have not believed that it makes a significant impact on company performance. Since 2016, the survey has asked participants to rate the contribution of social media marketing to company performance using a seven-point scale, where 1 = &ldquo;not at all,&rdquo; and 7 = &ldquo;very highly.&rdquo; In the eight surveys conducted over that four-year period, the average rating given by respondents has ranged from 3.1 to 3.4.</div> <div>&nbsp;</div> <div>Spending on mobile marketing exhibits a similar growth trajectory. The CMO Survey found that on average, marketers are currently devoting 12.8% of their total budget to mobile marketing, and survey respondents expect that percentage to grow to 21.8% of the budget over the five years following the survey.</div> <div>&nbsp;</div> <div style="margin-left: 40px;"><strong>Key Procurement Takeaway</strong> &ndash; Marketers are firmly committed to both social media and mobile marketing, and that commitment is likely to remain firm in 2020. Over the longer term, mobile marketing could become more important than social media marketing. Recent <a href="https://s3.amazonaws.com/media.mediapost.com/uploads/SlashtechFutureOfMarketingReport.pdf" target="_blank">research by the New York chapter of the American Marketing Association</a> indicates that U.S. marketers may be over-investing in social media because the use of some social networks appears poised to stall or decline.</div> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/marketing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Marketing</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/budget" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Budget</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/cost" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Cost</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/research" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Research</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/survey" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Survey</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/study" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Study</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="What Procurement Pros Need to Know About Trends in Marketing Spending for 2020 - Future of Sourcing" addthis:url="https://futureofsourcing.com/what-procurement-pros-need-to-know-about-trends-in-marketing-spending-for-2020"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Tue, 19 Nov 2019 21:04:32 +0000 Sarah Scudder 1639 at https://futureofsourcing.com https://futureofsourcing.com/what-procurement-pros-need-to-know-about-trends-in-marketing-spending-for-2020#comments Come see us again: why customer service matters in healthcare https://futureofsourcing.com/node/690 <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/xJay-Manahan-July-2015-2-420x215.jpg.pagespeed.ic_.PWgLawX01b.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/xJay-Manahan-July-2015-2-420x215.jpg.pagespeed.ic_.PWgLawX01b.jpg" title="Come see us again: why customer service matters in healthcare" class="colorbox" rel="gallery-node-690-Jy6qvngyDv4"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/xJay-Manahan-July-2015-2-420x215.jpg.pagespeed.ic_.PWgLawX01b.jpg?itok=C9GPj-O_" width="420" height="215" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The notion of healthcare quality being measured only based on the level of medical care given to patients is on its way to a complete disappearance. From our position in the healthcare contact centre space, we have been witnessing more and more organisations focusing on the patient experience to gain and maintain a competitive advantage. This evolution toward value-based service benefits the patient, the healthcare provider and the payer. Value-based models encourage healthcare providers to deliver the best care at the lowest cost. In turn, patients receive a higher quality of care at a better value.</p> <p><strong>The patient experience does matter</strong></p> <p>Patient experience is much broader than the care itself. It refers to the quality and value of all of interactions - direct and indirect, clinical and nonclinical - spanning the entire duration of the patient/provider relationship, which represents a continuum of interactions. Understanding patient experience is a key step in moving toward patient-centred care. By looking at various aspects of patient experience, one can assess the extent to which patients are receiving care that is respectful of and responsive to individual patient preferences, needs and values. Evaluating patient experience along with other components such as effectiveness and safety of care is essential to providing a complete picture of health care quality.</p> <p><strong>Measuring patient satisfaction: how to do it and why bother</strong></p> <p>You can’t know what patients are thinking unless you ask them. Physicians and practices often believe that they know everything about their patients and their needed care, but they are simply incapable of accurately assessing their patients’ perceptions of their received level of care: what is important to them or how well they are delivering the care experience.</p> <p>It is no longer a surprise being approached by big medical groups and hospitals asking us to implement a 360-degree view of their patients’ base. Since patient satisfaction is driven by positive encounters across all touch points with the organisation, it is becoming imperative to proactively measure the satisfaction level throughout the entire patient experience using two methods:</p> <ul> <li> Surveys</li> <li> Social media monitoring</li> </ul> <p>Surveys are sent to every patient’s mobile phone in the form of a friendly message right after every hospital visit. Also, patients are being directed after every phone call with the hospital call centre to an IVR simplified survey. Moreover, to increase the scope of the feedback, surveys are regularly sent via email to measure specific performance aspects of the hospital, the expectation of the patient being the recipient of the service and foremost, their satisfaction level.</p> <p>Social media is mainly used as it provides patients with a low-effort and positive emotion channel experience. As it is vastly used for bold expression, monitoring social media in the search of “negative” as well as “positive” comments are the main task of a software that is specifically designed to send crawlers, as they are technically called, to spot where the name of the hospital was mentioned. It then classifies the comment, based on the verbiage, measuring the overall positive sentiments versus the negative ones, and give scores accordingly. In many cases, the call centre would instantly rescue the patient, by immediately intervening to solve the problem that just been expressed via the social media engine.</p> <p>The fruit of all the efforts comes in the form of the dashboard access offered to the leadership of the hospital where it gives them a full view with a simplistic scoring to how they are perceived by their customer patients. A deeper layer of the reporting could reveal the satisfaction level of patients towards hospital departments, functions and even to the level of specific activities.</p> <p>Such analytics are priceless in terms of identifying the DNA – so to speak - of every customer patient, with a highlight on their loyalty, value and potential. Those are all measurements that you may only hear about in a typical commercially aggressive business. Had it been appropriate, you would hear after every health visit a friendly and caring voice saying: "Come see us again!"</p> <p><strong>We’re not robots, we’re human</strong></p> <p>Healthcare providers are striving to enhance their patient experience by understanding patients’ expectations, listening to their preferences, measuring service quality, and providing feedback and tools for improvement, while maintain their cost structure. It is a terrible pain that we often hear from our clients, and outsourcing the whole function is rising as the panacea. A functional call centre is the health system’s most valuable point of contact for retaining patients and for acquiring new ones. In today’s economy, outsourcing the entire function allows providers to focus on patient care, which is core purpose of their mission.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/survey" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Survey</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/data-analytics" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Data Analytics</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/customer-service" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Customer Service</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/social-media" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Social Media</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/business-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Business Management</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Come see us again: why customer service matters in healthcare - Future of Sourcing" addthis:url="https://futureofsourcing.com/node/690"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div> Tue, 02 May 2017 16:09:43 +0000 Ossama Hanna 690 at https://futureofsourcing.com Why the rise of robotics is forcing a rethink in BPO https://futureofsourcing.com/node/773 <div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">Recently, Genfour conducted a survey amongst UK and US business leaders on their views about robotics and automation.</p> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">The findings revealed that half of the respondents believe AI and robotic process automation (RPA) will have a significant impact on the BPO industry, with organisations taking ownership of automation projects directly, or via specialist RPA providers.</p> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">Add this to a post-Brexit environment, whereby many UK firms are already looking to move their customer service centres back to the UK simply because they can now reduce cost and improve productivity without making a huge investment, the question is being asked: &quot;Is the BPO market an industry in crisis?&quot;</p> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><strong>Relocation and Losses</strong></p> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">With this transitioning of services back to the UK, many companies are capitalising on the momentum by implementing intelligent automation (robots, cognitive systems and AI) in order to become more productive, as well as using local talent to manage this automation. Leveraging new technologies such as RPA and AI to engage with customers as the first point of interaction, these organisations will be able to focus their people on creating value-adding tasks rather than the mundane, repetitive jobs.</p> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">For BPO providers to compete, automation has to be at the heart of the next generation of service support. Only this week, RBS announced it is finishing a long-term contract with ITO provider Infosys due to its lack of speed and agility to support the IT transformation at its new venture. The project failure has perhaps&nbsp;played a part in the ensuing &ldquo;ramp down&rdquo; of 3,000 staff at Infosys. If the BPO adoption of automation doesn&rsquo;t happen quickly enough, we can expect to see more stories like this appearing in the coming months.</p> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><strong>BPO vs RPA - By Department</strong></p> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">At the heart of their transformation, multi-function BPOs need to figure out how they can compete effectively and build completely new solutions, which intelligently incorporate man and the machine, but are also quick to deploy. BPOs can no longer look to deploy and roll out in twelve months. Robotics can be implemented and rolled out in months, which beats this hands down. There are also specific benefits depending on business function:</p> <ul style="margin-top: 0px; margin-bottom: 1.714285714rem; margin-left: 0px; line-height: 1.714285714; list-style-position: outside; list-style-image: initial; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"> <li style="margin-left: 1.714285714rem;">Robotics technology gives the power back to the customer&rsquo;s business - RPA only needs basic set up to get it working, from this point IT can largely step away. Less work is required at the IT infrastructure level and more work being done on the RPA/user interface layer. There is no doubt that IT departments will begin to work closely with boutique tech firms to set up, enable and monitor their robots and will be less reliant on large ITO companies.</li> <li style="margin-left: 1.714285714rem;">HR departments will relish at the thought of managing and developing their companies workforce rather than managing long-winded processes &ndash; like criminal checks, employment checks, bank setup, etc. &ndash; all of which can be managed by robotic processes.</li> <li style="margin-left: 1.714285714rem;">Finance departments, similar to IT departments, will be more capable of managing and controlling their corporate finances in head office as RPA offers greater levels of compliance (basically 100% compliance), up-to-date information, instantaneous access to information and the ability to move data hubs back onshore.</li> <li style="margin-left: 1.714285714rem;">Procurement, operations, marketing - all core operations in today&rsquo;s modern business - stand to benefit from automating repetitive processes, through RPA and AI, that are currently being managed by people in BPO businesses.</li> </ul> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><strong>Disruptive Innovation&nbsp;</strong></p> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">Essentially, automation tools are by their nature disruptive when it comes to BPO because they do not require a centre of offshore workers to manually process things like invoices, manage systems or handle repetitive tasks. There will of course be exceptions where the cost benefit of automating a process simply doesn&rsquo;t exist, but if the demand or need for those processes suddenly spikes, the capacity to scale up a purely-human centre is very limited (time and cost to recruit, train and manage people). RPA, on the other hand, enables businesses to simply &lsquo;switch on/off&rsquo; robots to manage the peaks and troughs in demand.</p> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">The project charter and process of setting up RPA is largely the same as hiring a BPO firm: the customer maps out their systems, tools, processes, etc. and then the BPO organisation builds the operating model around the brief. The BPO firm has designed its resourcing model, its toolkits and its technology around the traditional view of BPO and over the past 5-7 years has invested heavily into technologies that better enable this human-led model to run more smoothly. However, these technology investments have not considered RPA or automation &ndash; let alone cognitive computing or AI (outside of workflow tools that schedule and push work to people). Hence, a large portion of profoundly expensive technology simply will not be relevant for the autonomous enterprise of tomorrow.</p> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><strong>The Brave New BPO</strong></p> <p style="line-height: 1.714285714; margin-top: 0px; margin-bottom: 1.714285714rem; color: rgb(68, 68, 68); font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">What does this mean for the future of BPO? The trajectory towards building agile, lean digital businesses means a new type of &lsquo;BPO&rsquo; firm will have to emerge as its own entity (not a subset or partner of the traditional BPO offering). This new BPO will align with specialist tech providers, process engineers and business architects to help business leaders fundamentally reimagine their business with automation at the core. This new BPO is not interested in running a 100,000-FTE centre, rather it will enable a 100,000-person business (its customer) to run fluidly, seamlessly &ndash; shaking off the shackles of the past ways of working and liberating its people to add value &ndash; both to the business and the communities that surround the business. Offshore may become onshore, the workforce may be robotic, but either way the future will be simpler, more intuitive, cost efficient and agile.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/business-process-outsourcing-bpo" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Business Process Outsourcing (BPO)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/brexit" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Brexit</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/innovation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Innovation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/strategy" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Strategy</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/survey" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Survey</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Why the rise of robotics is forcing a rethink in BPO - Future of Sourcing" addthis:url="https://futureofsourcing.com/node/773"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div> Tue, 23 Aug 2016 13:05:01 +0000 James Hall 773 at https://futureofsourcing.com Brexit: a complex future for UK procurement and the supply chain https://futureofsourcing.com/brexit-a-complex-future-for-uk-procurement-and-the-supply-chain <div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The result of the EU referendum will undoubtedly have a profound and long-lasting impact on the entire UK population and is likely to be something that is truly generational. Whether we voted for Remain or for Leave, however, Brits now have to assess where we are and how we maintain our position in the global economy.</p> <p>As we are all aware Leave campaigners claimed that import costs will be significantly reduced (by as much as 8%) as we move to being a zero-tariff regime. Whilst I would agree that this is a possibility, it is also true that import costs are equally likely to rise or stay the same. The dichotomy between the two positions and what will actually happen brings into sharp focus the lack of detail, clarity and certainty of what is going to happen over the coming months and years.</p> <p>What we do know is that until Article 50 has been served, and within the two-year negotiation time frame, things are not likely to change dramatically, but it is important that we begin to plan for the future, whatever agreements are finally put in place.</p> <p><strong>Opportunities and Risks</strong></p> <p>The drop in the pound, should it remain at this level or somewhere close, provides us with both risk and opportunity. Buying goods and services may be more expensive from our overseas suppliers but the export market will be looking at this as a significant opportunity.</p> <p>UK-based delivery centres may at present mainly serve demand from the home nations but if the pounds remains low, coupled with the skill base we have and the relative availability of foreign languages in our cities, there is potentially a positive outlook in providing these services to countries outside of the EU.</p> <p>The immediate impact of the Brexit decision has been that the cost of the products and services we buy has dramatically risen with the weakening of the pound. The government now needs not to focus just on the negotiation with the EU, but also to develop and&nbsp;deliver non-EU-based trade deals with other markets including China, India and the US, in order that we have multiple trade streams outside of the EU block. If we can bring some of our historic civil service acumen and legacy to bear it is likely to add significant leverage to our EU negotiating position.</p> <p>For the foreseeable future many of our imports will continue to come from the inside the EU and this situation is unlikely to change. Given the complexity of the situation it&rsquo;s also&nbsp;almost certain that the UK will not immediately move away from the international agreements that the EU has &ndash; and certainly the legislation in place is not going to be unwound anytime soon.</p> <p>Part of the complexity of unwinding this morass of legislation is the sheer volume of laws passed by the EU; between 1993 and and 2014 there were a total of 49,699 laws and directives enacted and whilst a majority of them are not directly applicable to the UK they are still in force across other EU markets. The impact of this situation is that if the UK is looking to trade with the EU these laws have to be taken into consideration when developing any form of trade agreement.</p> <p>This position is compounded by a lack of availability of Whitehall trade negotiators. At a recent UCL Constitution Unit seminar where they assessed the impact of the Brexit on Whitehall and Westminster, it was noted that a vote for Leave and the subsequent trade negotiations are likely to cause an enormous headache for Whitehall. Sir Simon Fraser, former Permanent Under-Secretary at the Foreign &amp; Commonwealth Office remarked that as it stands the UK government currently employs very few trade negotiators, given that the function has been long outsourced to Brussels</p> <p><strong>Migration</strong></p> <p>What is certain to add more costs to business following the Brexit decision will be the associated decrease in migration. The palpable level of tension within the migrant population is already rising and this uncertainty will either drive people back to their home country and/or, more likely, discourage new migrants from entering until the situation is resolved.</p> <p>This shift in balance of the mobile and migrant working population will lead to a clear increase in costs for products and services that depend on low-skilled migrant labour (everything from contract cleaning to logistics and construction). This is a scenario that over the coming months and years may drive inflationary tendencies in areas of UK outsourcing that rely on this demographic.</p> <p>Our recent monthly tracking poll of 500 global procurement professionals found that three quarters (79.5%) said they&rsquo;d rather the UK stays part of the European Union, 78.6% said they thought the procurement industry would be a harder sector to work in and 98% felt that leaving the EU would have a negative impact on procurement career opportunities in&nbsp;the UK.&nbsp;The referendum result clearly went against this sentiment and only now will we really see its impact on both the procurement and outsourcing industries.</p> <p>Looking to the future, and as the visibility of trade deals with both the EU and other markets becomes clear, it suggests that the level of complexity in delivering multinational procurement and outsourcing deals is only going to get harder.</p> <p>The UK government, procurement trade bodies &lsquo;and&nbsp;individual companies need to urgently look at the risk and agility of their supply chain as well as putting in place alternative sourcing methodologies that look towards reducing cost as a protective mechanism.</p> <p>The development of these types of solution and the strategies underpinning them will not remove this short-term uncertainly; however, putting them in place will mean that by the time the clock on Article 50 has finished ticking, solutions should be in place to ensure business continuity and control of costs for the UK economy.</p> <div>&nbsp;</div> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/brexit" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Brexit</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/currency" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Currency</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/negotiation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Negotiation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/offshoring" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Offshoring</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/politics" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Politics</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/sourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sourcing</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/strategy" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Strategy</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/survey" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Survey</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/trade" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Trade</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Brexit: a complex future for UK procurement and the supply chain - Future of Sourcing" addthis:url="https://futureofsourcing.com/brexit-a-complex-future-for-uk-procurement-and-the-supply-chain"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Thu, 07 Jul 2016 19:19:37 +0000 Milan Panchmatia 725 at https://futureofsourcing.com Shoring up the boardroom https://futureofsourcing.com/node/971 <div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Crisis is now an everyday occurrence, and is a risk that can be mitigated but never truly eliminated. In a world that seems to be increasingly prone to crises of every conceivable type, a recent survey from Deloitte &ndash;&nbsp;<em><a href="http://www2.deloitte.com/global/en/pages/risk/articles/a-crisis-of-confidence.html" target="_blank">A Crisis of Confidence</a></em>&nbsp;&ndash; finds a broad &ldquo;vulnerability gap&rdquo; between the awareness of threats and the preparations to actually handle them. The report draws on the views of more than 300 board members from major companies representing every major industry and global geographic region, with annual revenues that ranged from US$500 million to more than US$20 billion or equivalent. Some of the challenges identified should give all senior executives pause for thought about their personal and organisational level of preparedness should a crisis hit, and there are clear signposts that there is more to do before companies can really profess to being &ldquo;crisis-ready&rdquo;.</p> <p><strong>Defining Crisis</strong></p> <p>The first key challenge to address is the definition of a crisis. It&rsquo;s not at all uncommon for businesses to equate crisis management with business continuity management. Although the two things are related, in many respects such an attitude risks an overinflated sense of security simply because the company&rsquo;s business continuity plan is robust, tried and tested. Business continuity tends to focus on incidents that affect processes, facilities or systems. The resultant mitigation plans are often equally linear, specifically designed to, as the name implies, provide continuity until normal business can be restored.</p> <p>However, a true crisis has the potential to be much broader, strategic and much more ambiguous. At its worst, a major crisis can threaten the very existence of even the largest of companies and, whilst such events are thankfully rare, their potential impact should drive all boards and senior executives to prepare for them. Dealing with a complex crisis demands strong, decisive leadership ready to take tough decisions often under real time pressure and with less than fulsome information. It requires an ability to deal with ambiguity and demands good co-ordination, organisation and communication.</p> <p>Even traditionally strong and effective teams can be sorely tested when the crisis spotlight shines brightly. Human behaviours can change, especially if the leadership team or elements within it are under job threatening pressure. At times like this, prior preparation is critical in getting through tough times and, hopefully, emerging stronger from the crisis experience at least in the longer term.</p> <p><strong>Feeling Ready versus Being Ready</strong></p> <p>The Deloitte report highlighted that whilst 79% of board members believed their organisation would respond effectively if struck by a crisis tomorrow, only 49% said that their company engages in monitoring or internal communications to detect trouble ahead. Just under half (49%) said their company has playbooks to deal with likely crisis scenarios and, more starkly, only 32% said their company engages in crisis simulation or training. Perhaps most strikingly, 73% named reputation as a key vulnerability but only 39% said their business had a plan to deal with it. This area alone should prompt action amongst executive committees and boardrooms. Some 30% of those surveyed with experience in past crises said that their reputations recovered in less than a year. A further 16% estimated that reputational recovery would take four years or more. The key to this is to really understand the stakeholders and have clear plan of action to communicate with them from the outset.</p> <p><strong>Leadership, Leadership, Leadership</strong></p> <p>The damage done by a serious crisis can be deep and long lasting. Responding to and recovering from such a crisis requires direct and strong leadership from the company&rsquo;s top team. Consequently, leadership must be a core competency for CEOs, senior executives and board members. This competence can only come through training, rehearsals and direct experience of crisis situations. Equally, whilst a board might well operate at relative distance from the day-to-day management during business as usual, it must be prepared and capable of operating much closer to the coal face in times of crisis. It is imperative that the board and the C-suite are able to operate as a coherent body and they must be sufficiently in touch throughout the organisation to be able to sniff out trouble even when the upward reporting is telling them that all is well.</p> <p>Regulatory and legislative changes, such as the Senior Managers&rsquo; Regime (SMR) in the banking sector, are already driving changes in board and C-suite behaviours and that must be a good thing. However, for understandable reasons crisis management is often not on the top of their agenda and, as a direct consequence, training and rehearsal for crisis situations is routinely delegated downwards rather than remaining a top level focus. This risks leaving key members of boards and executive committees less than well prepared to face the challenge of a full blooded corporate crisis when it comes to call. At that point, downward delegation is no longer an option and only high-quality top-level leadership will do.</p> <p><strong>Transferring Anxiety into Action</strong></p> <p>Another key finding of the survey is the &ldquo;vulnerability gap&rdquo;, whereby board members see the threats to their organisations but recognise that they are not ready to handle them. This gap varies markedly from company to company, depending on the threat. However, across a sample of twelve potential crisis types there was always a gap between perceived vulnerability and preparedness. Whilst 63% of those surveyed felt vulnerable to a terrorist threat or man-made disaster, only 18% said they had a formal crisis plan to cater for one. Corporate reputational risk is cited as the biggest vulnerability (73%) but only 39% have a plan to mitigate the risk.</p> <p>The good news is that a small number of relatively small and easily achieved steps can sharply reduce this gap and take an organisation from being crisis vulnerable to crisis ready. Planning, training, communications and validation encompass a wider range of more detailed steps that build maturity in crisis readiness. As the risk of crisis cannot be eliminated entirely, it is equally important to consider how to respond to and recover from crisis events across the full spectrum of severity. As ever, the devil is in the detail but, in the teeth of the storm, clarity around roles and responsibilities, communications and support mechanisms are key to survival. In the crisis aftermath, holding a post-event review and ensuring that the resultant lessons are learned for the future are crucial steps towards emerging stronger.</p> <p><strong>Last Word</strong></p> <p>The perspectives and concerns of those surveyed in&nbsp;<em>A Crisis of Confidence</em>&nbsp;are illuminating and should offer a clear warning for all senior executives across all sectors. Hope is never a strategy, certainly not when it comes to crisis management. Closing the vulnerability gap and making your organisation more crisis ready is a clear leadership responsibility. A few simple steps can make all the difference when the inevitable crisis comes to your door.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/risk-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Risk Management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/strategy" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Strategy</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/research" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Research</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/survey" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Survey</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/leadership" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Leadership</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Shoring up the boardroom - Future of Sourcing" addthis:url="https://futureofsourcing.com/node/971"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 22 Jun 2016 13:06:28 +0000 Bob Judson 971 at https://futureofsourcing.com Why today’s business leaders must collaborate, not compete https://futureofsourcing.com/node/942 <div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>&ldquo;Eat or be eaten&rdquo; &ndash; for centuries, this &ldquo;law of the jungle&rdquo; was the law of the business world, too. Beating the competition delivered power, money and influence. From the Square Mile to Wall Street, survival of the fittest meant there was only room for one victor at the top. The digital revolution changed this. Measuring success in today&rsquo;s business world is no longer by the job or task performed for money. We value successful leaders for their contributions to the world as a whole and the manner of its making. What we do and how we do it matters. By joining forces as a united front with like-minded professionals, we widen our stride and deepen our impact. Today, collaboration rather than competition is the name of the game.</p> <p><strong>How Collaboration Disrupted the Workplace</strong></p> <p>Today&rsquo;s business world is moving away from jobs or tasks performed for money to the world where how we contribute as important as what we provide. The digital revolution transformed the business community as we know it. From PCs to email to smartphones, instant access to effectively unlimited data means the world is literally at our fingertips, moving at light speed. Even a decade ago, the exceptional stood out because of what they knew and how they applied it. Today, the unique stand out because of their ability to harness their connections to deliver meaningful, impactful change.</p> <p>When we do remarkable work, on purpose, and excel at it, then we also create a different future built on the value we bring. Careers are driven not by a desire for a big paycheck or plush spot in the executive suite, but our passions and talents. Our personal mission becomes our guiding light. When collaboration serves as a greater driving force than competition, collectively we can unite to do the extraordinary.</p> <p><strong>How the Collaborative Workplace is Changing Business</strong></p> <p>A collaborative rather than a competitive workplace has two critical implications for today&rsquo;s businesses and workforce. That means outsourcing work to the idea place, the place where the skills are truly honed. It means collaborating, not instructing, sharing goals and visions and being open to two-way influence and design, for mutual benefit. It requires a different form of loyalty, and that&rsquo;s transforming businesses and how they operate.</p> <p>Firstly, Millennials feel little loyalty to their current employers, according to Deloitte Touche Tohmatsu Limited&rsquo;s fifth annual Millennial Survey. Nearly half of all Millennials plan to leave their current employer within the next two years. Why? They are steering their careers by values and not roles. Millennials are acting differently to their older peers. From the employers they choose to the assignments they undertake, Millennials seek meaningful work. People and purpose matter more than profits. Millennials want to collaborate rather than compete.</p> <p>Businesses that refuse to transform into a more collaborative model driven by purpose-aligned work will struggle to engender loyalty with Millennials. That might lead to high staff turnover and a creative brain drain. Businesses must create the right environment to nurture talent that is aligned with purpose. That means designing more portfolio-based work schedules, and short-term (yet purposeful) engagements will become the norm.</p> <p>Secondly, individual workers must recognise that collaboration is also changing how businesses value industry expertise and skill sets. In this enlightened environment, the successful are working in an ultra-narrow niche. For example, rather than becoming a good general lawyer, they are choosing to work as something like &ldquo;the country&rsquo;s most skilled entrepreneurial investment contract lawyer&rdquo;.</p> <p>Expertise on its own is nothing. It merely denotes knowledge of how a particular skill works in specific circumstances. What makes expertise compelling is a connection with the authority of not any expert in the field but by being&nbsp;<em>the</em>expert in the field. Thought leadership and personal branding &ndash; both with individuals and businesses &ndash; are essential to standing out in a crowded marketplace, gaining referrals and strengthening credibility.</p> <p><strong>How to Build Authority in a Crowded Marketplace</strong></p> <p>How do you move from being competent to being&nbsp;<em>the</em>&nbsp;only business (or person) with a highly specific skill-set? The answer lies in profound clarity, exceptional strategy and remarkable implementation.</p> <p><em>Profound Clarity,</em>&nbsp;a crystal-clear understanding at every level, comes from being supremely capable at every aspect of the business, both now and with the vision of what it will become. Someone who is unable to articulate their skills, experience, or passions in a way that others immediately understand loses attention quickly.</p> <p><em>Exceptional Strategy</em>, the design of which ensures that change is both managed and leveraged, comes from a complete understanding of the vision, purpose, and pace of the organisation. It also is essential for all the enterprise&rsquo;s collaborative teams and partners.</p> <p><em>Remarkable Implementation</em>&nbsp;derives from sourcing the expertise, applying skills at the perfect moment, and managing risk and external factors. That comes from proper planning and a robust and considered strategy.</p> <p>Business owners who seek to stand out must concentrate on building the environment where this way of working flourishes. Institutional barriers pose a tremendous challenge. The structure of many businesses has not caught up with the shift to a collaborative workplace driven by purpose rather than profit.</p> <p>Yet today&rsquo;s business structures continue to be derived from complex legislation and regulation. These structures are top-down models that prioritise advancement within the corporate structure. Business leaders must be willing to flatten traditional hierarchies to foster innovation, creativity and collaboration. The best will go further and create a community of networked businesses which will provide additional value to customers that isolated companies cannot compete with.</p> <p><strong>Final Thoughts</strong></p> <p>Remarkable people have a profound clarity. The biggest returns come when this clarity is applied strategically &ndash; creating positive, sustainable businesses that add critical value to a collaborative community.</p> <p>Together, people with purpose and the companies that support them are changing the world. They will leave a tangible legacy that shines across generations. Businesses that choose to stand for people and purpose rather than just profit will attract an enthusiastic community, focused on sustainably creating meaningful value for all.</p> <p>Will you strive for the clarity, focus and skills this new world demands, or will you only settle for gradually being sidelined?</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/collaboration" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Collaboration</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/leadership" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Leadership</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/millennial" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Millennial</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/survey" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Survey</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/research" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Research</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Why today&amp;rsquo;s business leaders must collaborate, not compete - Future of Sourcing" addthis:url="https://futureofsourcing.com/node/942"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Thu, 12 May 2016 13:41:23 +0000 William Buist 942 at https://futureofsourcing.com EMEA outsourcing is off to strong start in 2016: ISG https://futureofsourcing.com/node/932 <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/xJohn-Keppel-Jan-2015-2-420x215.jpg.pagespeed.ic_.ujZ3E5YRqp.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/xJohn-Keppel-Jan-2015-2-420x215.jpg.pagespeed.ic_.ujZ3E5YRqp.jpg" title="EMEA outsourcing is off to strong start in 2016: ISG" class="colorbox" rel="gallery-node-932-Jy6qvngyDv4"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/xJohn-Keppel-Jan-2015-2-420x215.jpg.pagespeed.ic_.ujZ3E5YRqp.jpg?itok=XnYNQ45X" width="420" height="215" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>We&rsquo;ve just published the latest Outsourcing Index from Information Services Group (ISG) (which measures commercial outsourcing contracts with an annual contract value (ACV) of &euro;4 million or more), and found that the Europe, Middle East and Africa (EMEA) region got off to a strong start in 2016, with double-digit growth in both contract value and volume, reaching &euro;2.25 billion in the first quarter, an increase of 19 per cent over the same period in 2015.</p> <p>The region also saw a 28 per cent increase in contracting activity over the same prior-year period. The EMEA results mirrored the global market results, which saw ACV reach almost &euro;5 billion, up 20 percent year-on-year, and volume grow by 32 per cent.</p> <p>Restructuring drove the market in EMEA, with ACV rising 115 per cent while the number of contracts grew by 91 per cent, making this the second most active quarter ever for restructurings in the region. The value of new scope contracts fell, but with 97 deals signed, activity remained close to the 100-contract level &ndash; the sign of healthy contracting activity.</p> <p>Both information technology outsourcing (ITO) and business process outsourcing registered gains in the quarter, with ITO up 20 per cent year-over-year, reaching almost &euro;1.5 billion in ACV from 115 contracts. The boost marked a return to form for ITO, led by applications design and maintenance work and contracts bundling applications with infrastructure.</p> <p>The increased ACV and contract activity in the first quarter are a welcome contrast to 2015&rsquo;s sluggish start and suggest a healthy market flow for the region. The strong year-on-year growth in ITO value and volume suggests that technology solutions continue to have a positive impact in many areas, even as work increasingly is moved to the cloud.</p> <p>BPO started the year with its best first quarter since 2012, soaring over last year&rsquo;s first quarter with a 41 per cent rise in ACV. Most of this increased value came from a large award in Facilities Management and notable strength in contact centre, finance and accounting, and multi-function contracts. The number of BPO awards also saw a healthy increase, up 15 per cent compared with the first quarter of 2015.</p> <p>The notable value and volume gains in BPO, along with the surge in restructuring activity, reflect growing demand for business outcomes in outsourcing and the opportunity for organisations to digitise and make room for new technologies.</p> <p>Looking at each market individually, first quarter ACV and contract numbers in the UK grew by around 10 per cent year on year. Following two very soft quarters at the end of 2015, outsourcing activity in the UK has returned to historical levels. It remains to be seen whether this recovery is the start of an upward trend.</p> <p>DACH, however, posted its lowest ACV in more than eight years. Despite this ACV decline, the 29 contracts signed was up 32 per cent year on year, pointing to increased contracting activity at much smaller values and a sign of increasing maturity in the DACH market.</p> <p>Following an especially weak start to 2015, France rebounded somewhat in the first quarter as ACV increased by 33 per cent, albeit off a small base. The number of contract awards doubled year on year, returning the French market to more typical contracting levels.</p> <p>The strong year-on-year ACV growth in the Nordics was fuelled in part by a large deal between Volvo and HCL, though a 200 per cent increase in contract numbers made this the second best quarter ever for outsourcing activity in the Nordics.</p> <p>In other markets, ACV in the Benelux countries dropped sharply this quarter, while Southern Europe moved up by a triple-digit percentage.</p> <p>By sector, manufacturing stood out. Its ACV increased by 177 per cent year on year. Although the Volvo/HCL deal contributed to this rise, the doubling in the number of contracts signed in the sector underpinned the solid results. Likewise, telecom also saw large awards such as the IBM-Telefonica finance and accounting deal, and the number of transactions grew, up 67 percent compared with the same period a year ago.</p> <p>While ACV in financial services dropped 30 per cent against the values posted in a stand-out 1Q15, the number of contracts increased, with noteworthy deals including HSBC-Jones Lang Lasalle&rsquo;s facility management transaction and Accenture-RSA&rsquo;s insurance BPO deal.</p> <p>Looking forward, we expect a more difficult year-over-year comparison in the second quarter of 2016. Longer term though, ACV levels should remain in positive territory for the year due to the market&rsquo;s fast start in 2016. We see consistent demand in the UK and pockets of increasing long-term demand across several of the smaller EMEA markets.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/outsourcing-index" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Outsourcing Index</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/europe" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Europe</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/research" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Research</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/survey" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Survey</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/business-process-outsourcing-bpo" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Business Process Outsourcing (BPO)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/information-technology-outsourcing-ito" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Information Technology Outsourcing (ITO)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="EMEA outsourcing is off to strong start in 2016: ISG - Future of Sourcing" addthis:url="https://futureofsourcing.com/node/932"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/europemiddle-eastafrica" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Europe/Middle East/Africa</a></div></div></div> Tue, 03 May 2016 18:50:19 +0000 John Keppel 932 at https://futureofsourcing.com Delivering contracts with teeth https://futureofsourcing.com/node/901 <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/xEversheds-Mar-2016-oNexus-1-420x215.jpg.pagespeed.ic_.jzEiGDfr_A.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/xEversheds-Mar-2016-oNexus-1-420x215.jpg.pagespeed.ic_.jzEiGDfr_A.jpg" title="Delivering contracts with teeth" class="colorbox" rel="gallery-node-901-Jy6qvngyDv4"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/xEversheds-Mar-2016-oNexus-1-420x215.jpg.pagespeed.ic_.jzEiGDfr_A.jpg?itok=jV18Jqvb" width="420" height="215" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>All too often, businesses are faced with bold promises about the services they will receive from their outsource providers; they are drawn in by the &ldquo;ideals&rdquo; pitched to them and ultimately, find themselves disappointed with the outcome as those services fail to live up to expectations.</p> <p>This is a dilemma that arises time and time again for organisations that procure outsourced services. Outsourcing is undoubtedly a powerful tool for improving performance, driving business change, and achieving efficiencies within an organisation. However, it should not be forgotten that any deal requires significant up-front investment from the buy-side organisation, including the costs of undertaking transition and transformation, the need to reconfigure the retained organisation, and other deal costs. What happens if the outsourced services just aren&rsquo;t cutting the mustard?</p> <p><strong>The survey</strong></p> <p>In light of this, it is paramount to the buy-side organisation that any major outsourcing contract includes sufficient levers to incentivise good supplier performance. Deal teams spend a huge amount of time forming, negotiating and then drafting outsourcing contracts. Where is this time best spent?</p> <p>It is a question that our clients often ask us. To help obtain quantitative data on the subject, we ran a survey to collate information on which contractual provisions included in outsourcing agreements are actually being used by customers at the coalface, to ensure that their suppliers perform.</p> <p><strong>What we found</strong></p> <p>It is clearly a topic that generates interest and respondents were keen to provide real-life examples of outsource relationships where particular contractual provisions have been used to great effect, and equally those that have not had the value that organisations expected when the contract was signed.</p> <p>The survey demonstrates that traditional contract levers, the &ldquo;push factors&rdquo;, to ensure suppliers perform remain crucial and are being well used on a day-to-day basis by sophisticated buyers of outsourced services, such as service credits, remediation planning and loss of exclusivity.</p> <p>However, the buyer community is equally aware of the benefit of using and relying on softer tools, such as escalation processes, governance structures and relationship management to help incentivise good supplier performance. These &ldquo;pull factors&rdquo; need to be hardwired into any significant contractual arrangement, rather than being left to be discussed after signature. Each contract must have the relationship at its heart, through a strong governance structure, constant senior engagement from both sides, a reporting structure that delivers an understanding of whether business requirements are being met, and also an ability to reward good performance where there is a tangible upside for the customer&rsquo;s business.</p> <p>An ability to be flexible is also essential to a successful contract from the customer side. Continuing with this theme, the survey also demonstrates an openness on the part of the buyer community to revisit the contract terms, if deemed necessary to improve performance and embed confidence in the buyer&rsquo;s organisation. The types of changes being considered include renegotiating the charges, adjusting the charging mechanism to better compensate for fixed costs, re-baselining, pushing out certain SLAs, amending the scope of the services being provided and also extending the transition period. Nevertheless, these steps were still seen as &ldquo;unwelcome&rdquo; and &ldquo;rare&rdquo; and there &ldquo;needs to be a benefit for both sides in the new terms&rdquo;, with perhaps &ldquo;a marginal increase in rate, subject to increased contract performances&rdquo;.</p> <p><strong>The push factors</strong></p> <p>Service credits, as well as a right to terminate in part, are both viewed as very helpful tools to deliver performance. The tool that the highest percentage (21%) of respondents concluded was the &ldquo;most helpful&rdquo; tool was termination in part &ndash; an interesting statistic. It is a right that is often considered and may be included in outsourcing contracts but often without full thought being given to the consequences. For this to be a right that works in practice, it is essential that the contract clearly identifies those parts of the contract that can be terminated and crucially, that it is clear what the impact is on the charges and wider terms that are relevant for the retained services. Without this, the right does little more than trigger a change control discussion.</p> <p>&nbsp;</p> <p><a href="http://outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource1-550.jpg" rel="attachment wp-att-20190"><img alt="EvershedsOutsource1 550" height="435" pagespeed_url_hash="335041500" sizes="(max-width: 550px) 100vw, 550px" src="http://outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource1-550.jpg" srcset="http://archive.outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource1-550-300x237.jpg 300w, http://archive.outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource1-550.jpg 550w" style="line-height: inherit; height: auto !important;" width="550" /></a></p> <p>&nbsp;</p> <p><em>Service credit regimes</em></p> <p>In the additional commentary provided by respondents, service credits come up time and time again as a helpful way to raise supplier performance. Despite this, they are not seen as the perfect solution. 85% of respondents agreed that service credits are helpful, but crucially they do not encourage suppliers to perform above and beyond the relevant service level. The mechanism also needs to be thought through: for example, 83% agreed the service credits should, for example, be incrementally increased for repeat failures in meeting service levels. In addition, there is a risk that suppliers are not focused where they should be where there are &ldquo;badly aligned SLAs&rdquo; that &ldquo;drive wrong behaviours&rdquo;. An earn-back element of a service credit mechanism was also seen as attractive, as only 11% of respondents did not agree that suppliers remain incentivised when they are allowed to &ldquo;earn-back&rdquo; service credits through improved performance.</p> <p><em>Remediation planning and audit reviews</em></p> <p>11% of respondents regularly use the contract remediation planning process to tackle supplier under- performance and over 50% apply the process from time to time. A number of respondents noted the importance of being able to deal with under-performance via a &ldquo;root cause analysis&rdquo; from the supplier.</p> <p>Overall, over half of the respondents regularly conduct audits of their suppliers and a number of respondents separately identified that an &ldquo;ability to increase oversight&rdquo; where a supplier is not delivering had proved to be helpful. This said, over 20% never use the audit rights &ndash; a high figure.</p> <p><strong>The pull factors</strong></p> <p><em>Senior escalation</em></p> <p>The chart below shows how escalation has been used by respondents. Feedback from the survey respondents stresses the importance of using the contract escalation processes, with a common message being that it is key to &ldquo;work closely with the supplier at a senior level&rdquo; and &ldquo;senior level escalates&rdquo;, &ldquo;senior management escalation&rdquo; and &ldquo;escalating the issue to a Director within the supplier organisation&rdquo; all being the ways in which respondents identified they had resolved a recent problem with supplier poor performance. However, what is also clear is that &ldquo;senior management had to be really engaged in the issues and could not just have a superficial understanding&rdquo;.</p> <p>Over 70% of respondents indicated that they have employed some form of escalation in over 10% of their contracts.</p> <p><a href="http://outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource2-550.jpg" rel="attachment wp-att-20191"><img alt="EvershedsOutsource2 550" height="211" pagespeed_url_hash="755603837" sizes="(max-width: 550px) 100vw, 550px" src="http://outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource2-550.jpg" srcset="http://archive.outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource2-550-300x115.jpg 300w, http://archive.outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource2-550.jpg 550w" style="line-height: inherit; height: auto !important;" width="550" /></a></p> <p>&nbsp;</p> <p><em>Amending contract terms</em></p> <p>67% of respondents would agree to amend terms for a supplier in order to improve performance, though the additional commentary indicated that this option perhaps only came into real consideration when other options had been exhausted, and where there was a genuine belief within the buyer organisation that the supplier was not able to conduct its business in a profitable way.</p> <p><em>Payment incentives</em></p> <p><a href="http://outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource3-550.jpg" rel="attachment wp-att-20193"><img alt="EvershedsOutsource3 550" height="478" pagespeed_url_hash="1176166174" sizes="(max-width: 550px) 100vw, 550px" src="http://outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource3-550.jpg" srcset="http://archive.outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource3-550-300x261.jpg 300w, http://archive.outsourcemag.com/wp-content/uploads/2016/03/EvershedsOutsource3-550.jpg 550w" style="line-height: inherit; height: auto !important;" width="550" /></a></p> <p>&nbsp;</p> <p><strong>Additional commentary</strong></p> <p>Many respondents were vocal around the importance for a contract to recognise the relationship element of an outsourcing arrangement, such as:</p> <p>&ldquo;Continual working together and review of performance, using relationship and<br />communication as opposed to contractual remedies.&rdquo;</p> <p>&ldquo;By close and continuous contract management, regular reviews, a careful use of change control and constant senior engagement in reviewing performance.&rdquo;</p> <p>&ldquo;Close working relationship that recognises the supplier&rsquo;s and client&rsquo;s needs and ability to conduct business in a profitable way.&rdquo;</p> <p>&ldquo;More to do with supplier relationship management than contractual stick and carrot &ndash; if relationships are good, this fosters a better working environment and improved performance.&rdquo;</p> <p><strong>Conclusion</strong></p> <p>In conclusion, it remains the case that having a number of levers in an outsourcing contract to incentivise good performance from your suppliers is paramount. Although it is accurate to say that this survey demonstrates that certain provisions are more favoured by the buyer community, what is also clear is that having a range of options available to an organisation at any given time is very beneficial; the solution is very much dependent on the particular facts at the time and there is no particular contract tool that will be sure to fix all problems. There must be sufficient tailoring to a particular transaction and the contract must be able to deal with the multitude of types of breaches or poor performance issues that can arise in an outsource relationship.</p> <p>Secondly, building and maintaining a strong relationship with your outsourced supplier is equally as important, and the contract must provide a strong framework for doing that. What is key is that the contract hard-codes this relationship element into the contract terms.</p> <p>Finally, buyers can look outside of the immediate contract terms to drive better performance. A number of respondents pointed out the benefit of having alternative suppliers in place; holding back on further work to a supplier that is not delivering on the existing contract; and also not being as open as it could be to providing support to a supplier where that supplier is hoping to win work from other potential clients. It is important that buyers consider these levers as part of their wider vendor management strategy, which needs to sit alongside the approach taken on each outsource contract.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/negotiation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Negotiation</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/contract-construction" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract Construction</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/survey" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Survey</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/strategy" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Strategy</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Delivering contracts with teeth - Future of Sourcing" addthis:url="https://futureofsourcing.com/node/901"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Fri, 01 Apr 2016 12:52:19 +0000 Simon Gamlin 901 at https://futureofsourcing.com https://futureofsourcing.com/node/901#comments