Category Archives: Outsourcing
As Facilities Management Outsourcing (FMO) arrives in manufacturing companies, a vigorous debate arises over where to draw the line of demarcation in manufacturing plants. This line refers to the separation between management and maintenance of the building itself — including the building’s electrical, plumbing and HVAC systems — and management and maintenance of the systems linked to plant operations. Because it is often impossible to completely segregate the two, this is a critical issue to think through when considering FMO … More
Implementing a global service delivery model typically requires rapid mobilization of resources. Historically, global service providers have relied on a variety of visas to meet clients’ demand for skills and aggressive deployment schedules. However, this approach is becoming increasingly untenable. Organizations in the United States planning significant change initiatives could see their projects delayed by staffing shortages due to current restrictions on visas for foreign workers. A contingency strategy is essential, therefore, to adjust for delays in bringing service provider … More
A recent survey of IT executives concludes that poor-quality service remains the biggest risk of IT outsourcing, even though, according to respondents, SLAs are becoming increasingly tighter. In analyzing the results of the survey, conducted by IDG, CIO magazine reports that, “Lax internal governance and an overreliance on contractual obligations may be to blame.” We couldn’t agree more. Clients (and their business stakeholders) frequently complain about services – even when service levels are being met and overall services appear to … More
That’s the provocative and interesting question posed by a recent CIO magazine article. If you listened to your business stakeholders, you’d sue them every time the smallest thing went wrong! In fact, while most companies never sue their outsourcer (whether onshore or offshore), many clients are unhappy, and that unhappiness is often caused as much by the lack of clear governance process as it by the provider’s service failures. Contract language to address major breaches is important, but most problems … More
TPI announced that we’ve accepted a seat on the Corporate Social Responsibility (CSR) subcommittee of the International Association of Outsourcing Professionals (IAOP). If you’re not yet a member or familiar with the IAOP, it is the global, standard-setting organization and advocate for the outsourcing profession. The CSR subcommittee is one of the most active bodies within the IAOP, leading discussion among members on how the outsourcing community can identify and address critical social, economic, and environmental issues on a global … More
The next generation of strategic sourcing solutions has enhanced greatly over the past few years, allowing purchasing teams to become more strategic within their company. By following best practices to drive user adoption of these tools, these teams are quickly gaining traction and increasing their sourcing credibility. Jason Treida, Chief Operating Officer of Iasta, will participate on a panel discussion about this topic at the 2011 Finance Transformation Conference in Dallas, Texas on September 22. The panel is titled, “Expanding … More
Look for interesting news in the TPI Momentum 2011 review of outsourcing spending. We looked at outsourcing trends in 27 vertical and 68 sub-vertical industries throughout 2010 and found that, while overall outsourcing spending increased by five percent, conditions were highly variable across industries – with spending up or down by more than five percent in over half of the verticals. Here are the TPI Top 5 highlights from this year’s report: 1. G2000 companies increase outsourcing spend. In 2010, G2000 … More
In July, we held our 2Q11 Global TPI Index conference call, during which we discussed noteworthy trends in the sourcing market during the second quarter and the first half of the year. Compared with the previous second quarter, the second quarter of 2011 offered some welcome lift in several metrics: Europe, the Middle East & Africa (EMEA) total contract value (TCV) was up by 13%, Asia Pacific TCV rose 55%, and Restructuring TCV grew by 30% year-over-year. However, a poor … More
A decade ago, the sourcing market share of Indian-heritage service providers was a puny 1 percent. Today, it is approaching 20 percent. Will an emerging group of Chinese service providers achieve similar growth and reshape global competition in the process? TPI has been working with the Chinese Ministry of Commerce (MOC) and the China Council on International Investment Promotion (CCIIP) since 2009 to accelerate development of the sourcing market and establish protocols designed to make the country more attractive to … More
In the late 1980s, the first wave of modern outsourcing realized the promise of specialization, labor arbitrage, risk sharing and scale efficiencies. From the late 1990s forward, the era of globalization saw the forming of the second wave of outsourcing with the rise of offshoring. Now, in the era of social networking, are we seeing the third wave of outsourcing with the emergence of crowdsourcing? Crowdsourcing is a means of tapping into the global talent pool wherein certain business requirements … More
A few weeks ago, Aon Hewitt announced that Russ Fradin, who led Hewitt since 2006 and is currently the Chairman and CEO of Aon Hewitt, will be leaving to become CEO of SunGard. Kristi Savacool, Aon Hewitt’s current chief executive officer of Benefits Administration, and Baljit Dail, Aon Hewitt’s chief executive officer of Consulting, were appointed co-CEOs of Aon Hewitt and will report to Greg Case, President and CEO of AON. Jim Konieczny, current chief executive officer of Aon Hewitt’s HR … More
“Be careful what you ask for” — it’s fortune cookie wisdom. We have many client situations where they want to know whether they are really getting the value out of their outsourcing relationships. They ask us to look at the situation from all kinds of angles: services, invoice and resource unit accuracy, risk, productivity and so forth. We do these types of assessments from time to time, and they almost always show that there is some value loss in the … More
By Cynthia Batty Something is changing in the outsourcing universe. We suddenly see companies that have never outsourced before are becoming deeply engaged in multiple concurrent outsourcing transactions. These companies seem to have an essential need to transform their organizations “overnight.” They are undertaking these transformations by outsourcing functions such as information systems, transaction processing, Finance & Accounting and Human Resources — all within a few months of each other. Companies that are rapidly transforming have learned from mistakes of … More
Does having no Internet for nine days take a country back to the Middle Ages? Maybe. Does shutting down the Internet country-wide disrupt outsourcing operations and create supply chain risks? Absolutely. Egypt hasn’t left the global headlines within the past week, and one reason is because the country cut off access to the Internet on January 26th in the wake of civil protests and unrest. The Internet went live again on February 3rd. The Government shut down the Internet to … More
Egypt wasted no time positioning itself as a center for outsourcing after India inspired other developing nations to become outsourcing hubs. In December 2009, in fact, Egypt was listed on Gartner’s top 30 countries for outsourcing. Shortly thereafter, Intel opened a production center in Egypt. According to an article by SourcingMag.com, a report by Arabian Business said that Egypt is up to $1.1 billion in outsourced revenue. By 2015, the country plans to exceed $3 billion in outsourced revenue by … More
