Keywords: outsourcing, business process outsourcing, Horses for Sources, BPO, outsourcing survey, outsourcing benefits, Phil Fersht

The re-naming of an industry

Blog Post | 10 September 2012

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Author: Anna Bowsher

A few weeks ago, I wrote a blog on Horses for Sources’ controversial survey asking whether the word ‘outsourcing’ should be dropped for good. Last week it was revealed that a huge 61% of industry stakeholders were in favour of a vocabulary shake-up.

There were 871 respondents in total, made up of 151 buyers, 418 providers and 302 advisors of outsourcing services. Half of the enterprise buyers who responded had over $5bn in revenue, 73% are “significant influencers”, and a majority had many years of experience with outsourcing.

That nearly two-thirds of these professionals are fed up of the term is incredibly revealing. With rapid developments in the technological market and the greater availability of skilled, low-cost labour in alternative locations, BPO providers have never had more of an opportune time to expand their business.

But how can we re-brand the industry to shake off negative connotations such as onshore redundancy and loss of departmental control, and re-shift the focus towards the substantial benefits that outsourcing can bring to a business?

A key problem with using one word to cover a variety of projects is that it is generic and misleading. As one commenter on the results noted, “Outsourcing describes an inconsistent set of services”. Partnering with an outsourcing provider, however, can allows businesses to take advantage of specialist knowledge and cost savings in one area (usually back office functions), whilst focussing a majority of their efforts on what they’re actually good at.

Phil Fersht, founder of Horses for Sources, said, “Today’s business leaders must be able to associate ‘outsourcing’ with business value creation and true value partnerships with service providers which are instituting new capabilities into their businesses”.

But it’s not just about the jargon. The report highlighted four key challenges facing the outsourcing industry that must be addressed before perceptions can be changed:

1. How can we overcome the singular focus on costs that strips the industry of its value?
2. How can we leverage outsourcing as one of a variety of vehicles to achieve business objectives?
3. How can many of the service providers invest smarter in their account management teams?
4. How can buyers and providers really partner to foster innovations into business process outcomes?

We’d love to hear how you have practically tackled these issues in your organisation– get in touch to share your opinions and stories. 

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