Like the Bob Dylan song, “The Times They Are a-Changin’.” Think back to a couple of decades ago when it was easy to describe outsourcing in simple terms: Have a service provider handle your typically non-core processes in exchange for lower costs and somewhat improved results. In fact, we had some folksy terms to describe that: “mess for less,” and “lift and shift.”
Then we added a small wrinkle to pricing and asked providers to bill based on processed transactions rather than a set of savings against the baseline. Again, we had a nice term for that too: “buy by the drink.” Businesses, customers and providers alike were happy with the results and the outsourcing profession grew.
Next came the concern of just providing steady-state service. Customers began asking for improved performance at a lower cost and sought innovation that would make a difference to their top line, not just cost savings. Throw in that service providers needed to improve their delivery methods to increase their profits and shareholder value and you had a real catalyst for change. Automation and re-engineering became the weapons of choice and we saw incremental improvement in the environment and a gradual change in the outsourcing profession.
Now we have a sea of change coming to technology and the business environment. New concepts in process automation, data analytics and cloud-based software services are redefining how customers demand services. This digital transformation has altered how businesses provide their products and services to their clients. We have, what I call, a “transaction-based ecosystem” for businesses.
In this environment, processes look much different than they have in the past. No longer can one take a sub process and outsource it without directly impacting this ecosystem. The Internet of Things (or in this context the Internet of Business) has changed expectations for customers – consumers and businesses alike.
For example, this digital transformation has dramatically reduced the needs for call center and customer service process handlers. If this seems hard to believe just look on a business website for a phone number to call for service, you need detective skills to find it! We have seen news about businesses bringing outsourced work back in-house, altering their contracts to accommodate the new environment. And new, more agile service providers are making noise in cognitive automation.
Combine this digital transformation with the newer technology of blockchain and cloud computing, and service delivery platforms of outsourcing providers will be changing dramatically.