Why Outsource?

Mowing the lawn, housework, car repair and general maintenance. The aforementioned essential domestic tasks are likely performed in millions of households around the world.  But who is actually doing them?

Busy schedules, long work weeks and family obligations have led many of us to outsource these time consuming chores.   Maybe we simply don’t enjoy taking on these responsibilities or, worse, perhaps we lack the basic ability to complete them. Either way, millions of people rely on resources outside the home to perform tasks we rarely consider one of our core competencies. Limited by time, we earn our living doing what we do best and outsource the services we are less efficient at accomplishing. All the more reason to increasingly outsource as our lives become more complex.

Equally so, in business.

outsource graph

Last year, the Everest Group, a management consulting and research firm that advises clients on the development and execution of  business services and global IT strategies, provided market insight indicating an accelerating growth of outsourcing, partly due to increased activity in newer services segments.

Why are companies delegating processes to third party vendors? Outsourcing allows businesses to keep focused on their core business, lower their administrative expenses and increase their operating income.

Ranking highly among frequently outsourced business processes is supply chain management, often not a core competency for numerous enterprises. Driven by high potential for cost reduction, flexibility and execution of best practices businesses are increasingly leveraging BPO (Business Process Outsourcing) services, such as Accenture, IBM and SDI to gain competitive advantage.

Further fueling and facilitating this growth are digital platforms.

In its Technology Vision 2016 report, Accenture, a global professional services and consulting company, forecasts that 25% of the world’s economy will be digital by 2020. TMT Industry Insider, providing a succinct summary of the report said, “The global consulting firm contends that we are witnessing a major technology revolution, specifically a digital revolution. It’s a revolution of emerging ‘digital platform’ comprised of cloud services, artificial intelligence, cognitive computing, predictive analytics and intelligent automation.

These platforms transform and replace traditional business processes in areas such as finance & accounting, HR, marketing, procurement, supply chain and more. To quickly leverage these digital solutions, companies increasingly look to outsource traditional in-house functions to third party providers in what are referred to as BPO transactions.”

Not surprising. Digitization facilitates the execution of seamless business processes.

In a joint effort, Supply Chain Digest and JDA Software deconstructed the supply chain process to identify which sub-processes gained the greatest value from digitization-related technologies.  As represented in the visual below, published as Supply Chain Digest’s graphic of the week,

graphic week

supply chain visibility – the ability to track products or services from the point of origin to final destination –tops the list. Advanced analytics is a near second. The proliferation, availability and analysis of raw data allows companies to swiftly make better business decisions.

At SDI, leveraging these innovative technologies and techniques is a priority. As you focus on your business strengths let us partner with you to proficiently improve your bottom line.