Third wave of outsourcing coming
by: Johns
Total views: 7
Word Count: 298
Even as large global corporations transition to the second wave of outsourcing, the technology sector is heading towards the Third Wave in the making, according to The Hackett Group.
The Third Wave, which would mean a transformation and scale-up much different from the labour arbitrage market, would come up much faster than one anticipates and has the potential to challenge labour and cost arbitrage model. Some of the services providers in India and Eastern Europe could potentially find the going tough.
The President of The Hackett Group, Mr Wayne M. Mincey, said: “As offshore market matures, transformation and process improvement are likely to play a key role in business process sourcing decisions. The ability to provide transformational services and support provides a significant opportunity, and possibly the greatest threat that offshore markets like India will face in the coming 5-10 years.”
Bigger savings
The findings of Hackett’s research shows that while the potential for companies to reduce costs by offshoring back-office operations is dramatic, companies can potentially increase these savings by over 50 per cent by selectively integrating process improvement capabilities into their globalisation initiatives.
Addressing a press conference here, the Chief Research Officer of The Hackett Group, Mr Michel Janssen, said as opposed to ‘Lift and Shift’ model where companies simply move current processes offshore, the emerging model seeks to transform the way services get delivered and has the potential to bring higher savings. These would be more so in the areas of finance functions, human resources and process related business.
Over the past five years, much of the first wave of offshoring has focussed on the low hanging fruit of basic transactional processes that could simply be moved offshore for labour arbitrage. But in the second wave, there is greater opportunity and the necessity to integrate transformation into offshore initiatives.
About the Author
Read full article here: Offshore Outsourcing World. We are in offshore business and we are here to provide latest information on offshore outsourcing.
Rating: Not yet rated
![[Valid RSS]](valid-rss.png "Validate my RSS feed")
