These are Practicus’s thoughts on the five big disruptive ideas that will have increasing prominence this year for businesses and professionals involved in global sourcing.
There are many disruptive forces, for example, fluctuating oil prices, regional disputes, terrorism, climate change and emerging currencies. Based on our research and ongoing review of broad global publications, our five big ideas are the ones that appear to be gaining the most momentum. Reflecting upon these five today - and what they may mean to you and your organisation - will ensure you are in a much better position for tomorrow. Here they are...
Everything as a service
According to CISCO, the internet of everything is the "networked connection of people, process, data, and things". Possibly this is the next iteration of SMAC (social, mobile, analytics, cloud), which was last year's theme. Nevertheless, it is the continuing prominence of digital disruption. For traditional organisations, the challenge is how to respond and leverage, for start-ups, well it is all blue sky – hence this introduces the new paradigm - “everything as a service.”
The UK’s daily publication The Telegraph, reported in December 2014 that a quarter of the world will be using smart phones by 2016. And over 50% of those users will be in the Asia Pacific countries like China, India, Indonesia and Australia.
Today, services are being broken down and distributed digitally. Practices which we once considered were core to the firm are now distributed globally. In the weekly publication of The Economist (January 3rd-9th 2015), the front page cover’s headline was “Workers on tap” referring to the new global phenomena for bringing together computer power with freelance workers to create highly adaptable services.
Collaboration, Multi-Partners, outcome-based and vested relationships
As the business ecosystem is being opened up through technology, the complexity of stakeholders is also increasing and so is the challenge of how we collaborate. Kate Vitasek, author, educator and architect of the Vested business model encourages firms to look at partnering in a different way – certainly not from the master / servant of old and the client / supplier of today. There must be a win-win across all these relationships whether that be business to business (B2B), or business to individual (B2I). Today, business is about collaboration not transactions.
New regions and new players
The exciting thing with Everything As A Service is that it allows new opportunities. We have seen the recent growth of South Africa as a BPO location. While we are now seeing countries like Vietnam and Cambodia offer significant value propositions in comparison to traditional countries like India, China and The Philippines.
Furthermore, small nimble players are targeting specific niches. One example is a company in southern India that has targeted social media management and is now supporting clients globally.
These newer players are challenging the status of the more traditional service providers and their entrepreneurial nature generally allows entrepreneur-to-entrepreneur (E2E) dialogue and relationship building.
Automation and robotics
Al Gore’s book The Future – Six Drivers of Global Change targets outsourcing and “robosourcing” as two of the major global disruptors. As one travels across the Sydney Harbour Bridge, the toll collectors are now gone - and they have not been offshored either.
What about when you go to your local supermarket to check out your groceries, or to check in your baggage at your next flight? What if your business or profession relied in some way on these services that are no longer required?
This is happening everyday – it is understanding the phenomena and turning what may be a barrier or threat to an opportunity that is required today.
Ethical supply chains and impact sourcing
Some time back visiting a global service provider's operation in India, this author was assured of the socially responsible practices that this firm was embracing. Yet, while the author sat in the staff canteen at lunch time, the location allowed him to look through a door way into the back of the kitchen where the meals were being prepared. He perceived what he believed were children working in the kitchen. When he quietly inquired as to the relationship the global service provider had with the canteen operators, he was informed that the canteen was outsourced.
Although ages couldn’t be confirmed, the question he had was what would the end customers do if they thought there was a risk that child labour was involved at some point in the supply chain – how would they re-act?
About the Author
Dr. Ross McKenzie
Practicus Outsourcing Capability Leader
Ross has over 25 years’ experience in implementing and optimising shared services and global outsourcing capabilities. He is currently also the chairman of the Fair Trade Group.
- Ambrose, C & Cohen, LR 2010, IT Score overview for IT sourcing and IT vendor management, Gartner, viewed 10th May 2012, <http://www.gartner.com/id=1433814>.
- Gore, A 2013, The Future, Random House, USA.
- Kate Vitasek, Karl Manrodt, 2012 Vested outsourcing: a flexible framework for collaborative outsourcing, Strategic Outsourcing: An International Journal, Vol. 5 Iss: 1, pp.4 – 14
- The Economist, January 3rd-9th 2015
- Willcocks, LP, Cullen, S & Craig, A 2011, The outsourcing enterprise: from cost management to collaborative innovation, Palgrave Macmillan, Basingstoke, UK
CRITICAL SOURCING QUESTIONS
- Are the right insights shaping your decisions?
- What skills do you need for tomorrow, today?
- Is your strategy really driving your execution or is it the other way around?
- Are you ready for the “As A Service” World?
For help with all these questions and more contact Practicus, call +61 2 8281 5000