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Home > Business/Finance > Diversified Services > Business Outsourcing
The Future of Outsourcing
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| Published Date:
May 2006
Published By:
Datamonitor
Page Count:
43
Order Code:
R313-14518
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- DATAMONITOR VIEW
- CATALYST
- SUMMARY
- METHODOLOGY
- OVERVIEW ANALYSIS
- Outsourcing is misunderstood
- Outsourcing is growing as a business element
- Outsourcing is dynamic: there are many models from which to choose
- REVOLUTION IN OUTSOURCING: THE NETWORKED PHARMACEUTICAL MODEL
- CATALYST
- SUMMARY
- Pharmaceutical companies have been outsourcing core functions since the 1990s
- Proprietary and unique capabilities should be keep in-house
- Traditionally, sales force outsourcing has been a tactical decision
- Key drivers of the tactical use of sales force outsourcing
- The use of sales force outsourcing has been limited because of concerns over loss of control
- Pharmaceutical companies are increasingly using sales force outsourcing strategically
- Sales force outsourcing provides an opportunity to focus on core competencies
- Sales force outsourcing provides flexibility
- Identifying suitable CSOs and managing the relationship is crucial for success
- Identifying suitable CSOs
- Negotiating suitable outsourcing deal structures with flexibility and clear objectives and goals
- Effectively managing the outsourcing relationship with a CSO
- THE EVOLUTION OF THE GLOBAL CONTACT CENTRE INDUSTRY
- CATALYST
- What drives successful outsourcing? What drives successful offshoring?
- SUMMARY
- Despite negative publicity, contact center outsourcing is growing
- Why is outsourcing growing?
- Quality of labor
- Ample labor
- However, western domestic outsourcing is shrinking in face of new business realities
- Disappointing quantitative evidence confirms slowing western outsourcing growth
- Outsourcing is changing due to lower costs in offshore locations with strong quality levels
- Slowing growth in traditional offshore locations
- Exclusive nearshoring - closer proximity but higher prices?
- Profiting from 'BestShoring'
- INNOVATION IN FINANCIAL TRANSACTION PROCESSING ACROSS EUROPE
- CATALYST
- Will the next wave of outsourcing learn the lessons of the past? What drives successful transactional outsourcing?
- SUMMARY
- Third party processors have traditionally struggled in European card processing
- Local players have kept processing in-house or used a national club model
- Local players have been reluctant to work with US outsourced providers
- US players' lack of understanding of the local cards market was a key factor for this lack of success
- Furthermore, banks were wary of allowing US players access to their commercial customers.
- However, traditional business models are now coming under pressure
- European card issuers are increasingly seeking to differentiate their product offering from competitors
- There is increasing pressure to build economies of scale
- Banks increasingly operating on an international basis and need international service providers
- European initiatives are set to open up national processing markets
- While third party providers are improving their understanding and approach to the market
- Certain players have benefited from a partnership approach and adopting a strong local brand
- Strategic acquisitions have improved the product offerings and staffing of some processors
- As a result, Europe is witnessing a second wave of outsourced card processing solutions
- OUTSOURCING TO IMPROVE CUSTOMER SERVICE AND REDUCE COST-TO-SERVE
- CATALYST
- SUMMARY
- In contested mass consumer markets, managing Cost-to-Serve is a challenge
- Providing customer service to the mass market has changed with the advent of competitive markets
- The UK energy utilities have managed Cost-to-Serve to differing degrees of success
- Cost is a prime consideration but quality of service is also an important concern
- Cost-to-Serve advantages allow companies to price more competitively versus the market
- Infrastructure spending can deliver significant Cost-to-Serve improvements
- Within integrated service providers, the retail arm competes for scarce investment resources
- The full rollout of Project Jupiter will push Centrica from a market lagging position more into line
- Systems have been consolidated on a national logic, though certain companies may operate pan nationally
- Effectively designed infrastructure further facilitates outsourcing
- Outsourcing relies on having effectively consolidated systems
- BPO within mass market service providers is largely driven by cost saving rather than process improvement
- Centrica are to leverage their infrastructure investment to fully benefit from outsourcing
- Technology will determine by how much further the Cost-to-Serve can fall
- The envelope of outsourcing is yet to be fully explored
- Strategic decisions will be important in determining how far outsourcing rollout will progress
- Ongoing cost improvements will be technology driven, though regulatory requirements will also impact
- GROWING OUTSOURCING BUSINESSES: THE FLEET MANAGEMENT EXAMPLE
- CATALYST
- Will the next wave of outsourcing learn the lessons of the past? What drives successful B2B service management outsourcing?
- SUMMARY
- In Europe's fleet market, growth in outsourcing of fleet management services is slowing
- What is outsourcing in fleet management?
- What are the future prospects for fleet service outsourcing?
- Companies need to revise their service offering to raise levels of outsourcing
- Fleet service outsourcing with small clients remains low
- Outsourcing has achieved significant inroads with medium and large clients
- Mass market strategies provide growth potential
- Offer Pan European solutions to attract companies with international fleets for outsourcing
- Pan European solutions aid expansion into emerging markets
- Provide innovative solutions such as flexible leasing to attract niche clients with unique requirements to the market for outsourcing
- Datamonitor's conclusions on the future of fleet service outsourcing
- APPENDIX
- Definitions
- Outsourcing
- Further reading
- Ask the analyst
- List of Tables
- Table 1: The Nordic banks has established a strong presence in the Baltic states and Poland, 2006
- Table 2: A number of mid-sized European banks have established significant operations in Central & Eastern Europe, 2006
- Table 3: Cross-border mergers in Western European banking, 2004 - 2006
- Figure 17: Outsourcing of fleet management services has reached its potential with large corporate clients in Western Europe
- List of Figures
- Figure 1: The 'networked pharma' model
- Figure 2: Pharmaceutical business processes that are suitable for outsourcing
- Figure 3: The use of outsourcing provides pharmaceutical companies with greater flexibility to respond to fluctuating resource demands
- Figure 4: Price per hour of contact center inbound agents in various locations, 2005
- Figure 5: Selected gross office rents - selected cities, 2005
- Figure 6: Outsourced APs in Western Europe, 2005 2010
- Figure 7: Outsourced APs in the US, 2005 - 2010
- Figure 8: Indian and Philippine outsourced AP growth, 2005 - 2010
- Figure 9: The card processing value chain has two key parts: the issuing side and the acquiring side
- Figure 10: The European card processing market is fragmented, with a number of interbank processors and in-house systems serving the marketplace, 2004
- Figure 11: Pay now cards account for the largest proportion of payment cards transactions in Europe, 2000 - 2004
- Figure 12: Certain players are emerging as strong contenders in European card processing, 2006
- Figure 13: There is a spread of outcomes arising from UK utilities' attempts to manage the Cost-to-Serve
- Figure 14: Centrica's Project Jupiter system delivers a step change in Cost-to-Serve
- Figure 15: IT Spend has enabled parts of Centrica's business processing to be moved to lower cost centers
- Figure 16: Growth in full service operational leasing is slowing
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