Live from Outsourcing World Summit 2017 - The Evolution of Outsourcing

JW Marriott Hill CountrySan Antonio, Texas

February 19-22, 2017

The evolution of outsourcing: Or what is it going to look like tomorrow?

© 2017 IAOP. All Rights Reserved.

Introductions

Peter Ankerstjerne CMO and Head, Group Marketing | ISS World Services A/SDavid BrownPrincipal and Global Lead, Shared Services and Outsourcing l KPMG Calvin CrowderSenior Director, Global Real Estate | GoDaddy™Harpreet DuggalSenior Vice President l Genpact


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


Critical success factors

Speed is of theessence

Cost effectiveness& documentation is

(still) criticalTrust as an asset

Transparencyforevermore “KISS” wins


Emerging options

Network Sourcing

Mesh Sourcing

Crowd Sourcing

Solution Sourcing

Co-sourcing

“WHAT’S IN IT FOR WE?”

“Perverse Incentives”


Top 2017 user organization initiatives

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

22%

25%

26%

30%

22%

39%

54%

31%

56%

72%

18%

20%

20%

28%

28%

34%

38%

38%

60%

67%

2016 2015 Source: KPMG 2016 Q4 Pulse Survey


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*

98%*KPMG CEO survey

As a service economy, i.e., Platform as service25% of the world’s energy needs are set to be met by renewables in 2020

Virtual assistants

Cognitive computing and machine learning

Trends in Technology Transformation

The rise of robots will lead to a net loss of over 5 million jobs in 15 major developed and emerging economies by 2020One in three jobs will be converted to software, robots and smart machines by 202565% of today’s grade school children will be employed in jobs that haven’t yet been invented

Trends in Employment Transformation


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

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

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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%

Mission Critical Increasingly Important Emerging Not a Directive


Use of intelligent automation

Cognitive automation

Enhanced process automation

Basic process automation

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

15% 40%

29%

14%

30%

33%

24%

15%

43%

67%

No activity Self-education and planning Experimenting and running pilots Live implementations


Organizational and people impacts

Changing Behaviors Adopting and adapting

the new ways of working

Changing Perception

Overcoming the fear factor

Organizational & People Impacts

Leadership Vision Agreeing on future state

vision for the organization

Talent Pipeline Hiring, reskilling and

exiting talent

Culture ShiftNeed for agility and

innovation


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

SpeedPrivacy & 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


Outsourcing talent maturity

Do you agree that your primary service provider has the right talent to do the following? Provider Talent

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

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%

Strongly Agree Agree Neutral Disagree Strongly Disagree

HfS Research in Conjunction with KPMG, State of Business Operations 2017 N=454 Enterprise Buyers


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

JW Marriott Hill CountrySan Antonio, Texas

February 19-22, 2017

Thank you!

Live from Outsourcing World Summit 2017 - The Evolution of Outsourcing

Presentations & Public Speaking

Transcript of Live from Outsourcing World Summit 2017 - The Evolution of Outsourcing