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Outsourcing report: technology is a main driver

New study identifies top five outsourcing trends to watch.

A new report published by SirionLabs and The Shelby Group identifies the top five trends driving “outsourcing value optimization” in 2018. The report predicts that technology integration across functional silos, predictive analytics and the shift from traditional contract management platforms to performance focused systems are some of the drivers for how outsourcing services will be delivered and consumed this year.

The report outlines five key trends in the outsourcing ecosystem to address new challenges emerging from the shift towards services procurement that has surged ahead of goods and is now estimated by Forrester at 58% of the total procurement spend. The unrealized value in complex services engagements – estimated at 15% to 20% of all commodity value (ACV) – represents a significant challenge for both outsourcing customers and suppliers.

The top five trends for driving outsourcing value optimization, according to this report, are:

  • Role of Contract Lifecycle Management systems expands from managing contracts to managing performance: Trend cites that there is a clear departure from a narrow contract management focus to a broader view that combines contract, performance, financial, relationship and risk management.
  • Technology integration will drive outsourcing performance: An integrated view of outsourcing engagements by connecting functional silos will remove the inefficiencies and enable holistic management of outsourcing engagements.
  • A single source of truth between the customer and their outsourcing suppliers: A common data platform will increase alignment and shift the focus to performance instead of validation of data.
  • Technology will drive rapid adoption of SIAM (service integration and management): Technologies available today will facilitate the rapid adoption for SIAM as a framework with growing number of suppliers involved in delivering an end-to-end service.
  • Predictive analytics will enable real time interventions for optimizing outsourcing value: Enterprises will leverage comprehensive dashboards powered by advanced analytics to track and monitor outsourcing performance on a real-time basis.

Ajay Agrawal, chairman of SirionLabs said those trends will play a “positive role” in enhancing value realization for both sides in outsourcing.

“We feel that the rapid emergence of innovative and more powerful technologies in the procurement space is fueling these trends,” he explained. “In line with this, we are going to see Blockchain play a pivotal role in transforming how outsourcing is managed through its distributed ledger architecture creating a single source of truth between outsourcing customers and suppliers.”

 “Over the years we have been tracking the changes that have shaped the outsourcing industry, from macro trends like the global shift in labor markets to cross-sourcing across multiple suppliers and geographies,” John Dreyer, CEO of The Shelby Group. “This year, technology is at the heart of the trends driving outsourcing value optimization.”

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