IAOP Offers Predictions for the Future of Outsourcing
December 27, 2007
Outsourcing will continue to be a promising venue for organizations seeking streamlined operations without significant overhead. This is true not only for contact center operations, but other back office and front line tasks that can be assigned outside of the organization in order to promote efficiency and lower overall costs.
The International Association of Outsourcing Professionals (IAOP) recently released its predictions for the coming year. Key trends that the organization has identified include socially responsible outsourcing, global competition for talented employees and a power shift among outsourcing players.
IAOP Chairman Michael Corbett and Managing Director of Thought Leadership Jagdish Dalal identified the top five outsourcing developments to watch for in 2008. These developments include socially responsible outsourcing; increase in demand for outsourcing professionals; global talent wars; power shifts from dominant players; and globalization.
Outsourcing is expected to be increasingly recognized for the value it brings to communities around the globe. Companies engaging in the practice will be acknowledged for being good corporate citizens.
“With the shaky U.S. economy, presidential elections looming and a heightened awareness of how everyone’s actions impact the environment, outsourcing is poised to go politically correct in 2008,” Corbett said in a Thursday statement.
Corbett also predicts that companies providing, using and advising on outsourcing will become known for adhering to and advancing the highest ethical standards, contributing to communities, bettering the environment and expanding career opportunities and training for employees.
The IAOP also predicts that outsourcing professionals will be sought after, valued and compensated for their important role in business. Today, more than 150,000 professionals are involved in the $6 trillion global outsourcing industry, and this number is expected to continue to grow.
“The C-level suite is recognizing the importance of outsourcing,” Dalal said, in Thursday’s statement. “More and more outsourcing professionals will sit at the executive table with senior executives and define the very shape of business.”
A major challenge for both outsourcing service providers and businesses building their internal capabilities as outsourcing increases will be attracting, developing and retaining talented employees.
“The global talent wars will further widen the economic gap between the cost of talent management and expected cost baseline,” Dalal added.
Leadership in outsourcing is also expected to move from a small group of U.S.-based service companies who have dominated the industry since its inception, to include foreign companies that are growing, such as TCS, Infosys and Wipro.
“The landscape is shifting, with large U.S. companies becoming major ‘offshore’ players while offshore players are establishing U.S. footholds through acquisitions and by establishing their own facilities,” Corbett said.
Organizations will race to build their global talent portfolio, although the best will all have their basics in place by the end of 2008. The IAOP believes that any company not already well into the outsourcing game is at serious risk in today’s economy.
“Although the ink may be barely dry on the first revision of Tom Friedman’s book, The World is Flat, the globalization end-game is already in sight,” Corbett said.
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