This article was first published in the April 2004 International edition of Accounting and Business magazine
That the global business environment is in a state of transition, and that outsourcing is a major contributing factor to that transition, should not be a surprise to anyone. What may be less obvious is that outsourcing itself is undergoing enormous change.
A perfect storm is brewing for organisations and professionals in every corner of a sector which is swiftly expanding and changing, due to the confluence of accelerating trends. Those trends encompass the proliferation of new technologies, the evolution of disaggregated organisations and the emergence of new sourcing destinations. They also include the development of unexpected capabilities in verticals and processes, better understanding among practitioners, greater sophistication on the part of providers, the rapid rise of new and potentially disruptive pricing models, and a snowballing quantity of data and quality of analysis.
The rate at which outsourcing’s complexity and sophistication is advancing is phenomenal, as is the pace with which outsourcing is breaking new ground in terms of functions. The drivers are numerous but at the fore stand increased technological capability and suppliers’ need for differentiation, competitive advantage and continued growth in an evermore crowded market. Having proved itself in the fields of IT and finance and accounting (F&A), a mature and sophisticated outsourcing model is now being applied to almost every aspect of business.
Key to this expansion is a growing understanding of what outsourcing is, and the benefits it can bring. Outsourcing has established itself as a viable model and been embraced by some of the world’s largest and most successful companies. It now has a seat at the table at the great organisational feast, and those in charge of organisational strategy can consider implementing it in almost every corner of their fiefdoms, from customer service and legal, through facilities and fleet, to recruitment, procurement and marketing.
Whether or not they do so, of course, depends on a welter of factors including each organisation’s core business – its ‘what we do’ – but the opportunity is undoubtedly there. It may be a case of horses for courses, but organisations considering the outsourcing route can at least be reassured that the horses in question are tried and tested – and in many cases thoroughbred champions.
Ensuring that the right jockeys are in the saddle is clearly crucial. The increasing complexity of the outsourcing model, the rapid change visible across the space, means that the role of the dedicated outsourcing professional has ever greater prominence. The basics of outsourcing may be simple, but the intricacies of, for example, carrying out a transformation, understanding the challenges involved, appreciating the relative strengths of the different solutions (and providers) available are unlikely to be grasped immediately by the layperson – or indeed by a seasoned professional with years of experience in their function of choice.
Outsourcing has grown into a multibillion-dollar industry in a comparatively short space of time. An understanding has developed that it needs to be populated and driven as such by professionals dedicated to their tasks rather than dilettantes, however capable.
This requirement for specific knowledge and skills has given rise to the evolution of outsourcing provision as a genuine profession. The extremely valuable career opportunities now on offer in the sector have been one of the most noteworthy developments in the space over the last few years. There has also been a proliferation of roles on the periphery of outsourcing, or dealing with specific aspects of it, which require significant expertise and may be considered to sit within the category of outsourcing professional.
A further development has been the emergence of a vast cohort of sourcing advisory organisations – from one-person-bands to some of the world’s largest consultancies – providing guidance on all aspects of the outsourcing process.
Greedy for talent
These developments have contributed to one of outsourcing’s biggest impacts on the business world at large (and the finance community in particular, given that finance has been at the forefront of the outsourcing revolution): an intensification of the war for talent, as the various participants struggle to recruit key enabling professionals.
As a result of my relatively privileged perspective I interview figures from right across the outsourcing space. Despite the ostensible and often very marked differences in their roles, what many of my interviewees – from group chief procurement officers to heads of shared services to IT directors – have in common, is that they consider the battle for talent one of their primary challenges now and going forward.
The compensation, incentives and career progression on offer within the industry are increasingly attractive, and the effort going into attracting the best people is becoming more intense. The outsourcing industry is eating into the talent pools available to a host of other activities and industries – and so ramping up the ongoing talent wars in those industries too.
Potential hires can see a dynamic, rapidly expanding space and the potential for rapid advancement which simply might not exist in more traditional areas of business. This is particularly the case for areas more recently coming into the outsourcing field of play, such as the legal industry, where long-standing career progression paths are being seriously disrupted (frequently to the great benefit of more proactive legal professionals) by the rise of legal process outsourcing.
And, of course, thanks to the maelstrom of disruptive forces highlighted at the beginning of this article, once within the outsourcing space, the opportunities for rapid advancement (and entrepreneurial success outside the confines of organisations in the space) abound more than ever.
What this all means is that the evolution and proliferation of the outsourcing model isn’t just exciting for organisations – it’s a potentially thrilling development for individuals too. Professionals with the right skills and the appropriate mindset now have a whole new arena in which they can ply their trade and flourish.
For finance professionals in particular, the huge array of F&A-focused outsourcing suppliers and advisers provide career opportunities aplenty, in fields which simply didn’t exist just a few years ago. It might require taking a step into the comparative unknown, especially when set against what can often be viewed as relatively conservative professions and organisations, but the outsourcing space can now genuinely be a land of opportunity for those professionals willing to take that step.
Outsource magazine and ACCA
This is the first of a quarterly series of articles from Outsource magazine, a leading channel for strategy and thought leadership.
ACCA has formed a relationship with the publication with the aim of promoting its outsourcing, shared services and finance transformation research. Editorial content will be shared and marketing support provided.
‘I’m delighted to be able to bring ACCA’s insights and research findings to the Outsource audience,’ says editor Jamie Liddell.