36


Wave1: Y2K


In the late 1990s, the rush to comply with Y2K requirements led to organisations evaluating alternative operating models which would help them with the necessary resources for addressing the immediate challenge of Y2K remediation. This opened up the opportunity for outsourcing service providers to penetrate client organisations and prove the merits of an “outsourced model”.


Wave 2: Emerging technologies


The end of the Y2K problem coincided with the emergence of e-commerce and other new technologies. Outsourcing models enabled the provision of required resources for these new technologies, resulting in it becoming even more mainstream.


Wave 3: Economic arbitrage The economic downturn of 2007-08 forced organisations


to cut costs, while innovating to keep the “lights on”. This also acted as a further boost for outsourcing partnerships.


Wave 4: New socio-economic circumstances


While the industry has not till late seen disruptive factors, the new political environment is posing a challenge for the industry. Populist governments have grown protective of the labour market, and are discouraging immigrant visa applications. At the same time, governments are also monitoring the movement of jobs and offshore companies that “move jobs offshore”. In Europe, Brexit has further caused uncertainty on the economic prospects of the region and reduced the openness of trade agreements.


In this new environment, organisations are facing a dilemma of designing their future operating model. The “Outsourcing Ratio” has peaked, and is likely to decline in the near future. Clients, however, cannot afford to retract from the outsourcing journey because it will have


www.ibsintelligence.com © IBS Intelligence 2017


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52