Outsource Magazine Issue 25 - (Page 56)

This issue: View From The Top; member round-up; paThway; eVenTs Calendar National Outsourcing Association Chairman Martyn Hart explains why recent events have led to changes in the NOA’s forecast for the future… View From The Top Indian Providers Setting Up on Away Soil F ollowing on from the National Outsourcing Association’s 2011 predictions, dramatic changes in the outsourcing macro-environment have led to some noteworthy revisions . Two major issues dominate: rampant inflation and skills shortages in India; and the UK government’s increasingly progressive attitude towards outsourcing – as demonstrated by the Open Public Services white paper and the Cabinet Office guidance on offshoring. Full of promise and challenges, the stage is set for the next year to be a memorable one for all of us involved in outsourcing. Martyn Hart, Chairman, National Outsourcing Association (NOA) Soaring inflation and, therefore increasing staffing costs – India has the highest wage inflation of any Asian economy, expected to be 13 per cent this year. There are plenty of jobs available, but not a great deal of talent. This shortage of skills will lead to a slowdown in growth, and will lead to some Indian BPO companies setting up shop in lower-cost outsourcing destinations. Contracts It is clear that during these current austere times, tolerance of risk is attenuating. Many large end-users – such as National Rail Enquiries – are finding that multi-sourcing enables a more pragmatic approach to risk allocation, as well as increased exposure to a greater assemblage of expertise. Contracts also appear to be shifting from the previous trends of long-term megadeals to more flexible, short-term agreements. Outcome-based agreements are also becoming more popular. Public Sector Unveiling the Open Public Services white paper, Mr Cameron said it was about “ending the old big-government, top-down way of running public services, releasing the grip of state control and putting power in people’s hands.” This attitude will lead to an increase in local government outsourcing, as organisations will now be freed to find the best provider for the job, regardless of sector. The issuing of Cabinet Office guidance on offshoring is another clear indicator of this. Another public sector trend is the sharing of services. We are seeing an uplift in collaboration between neighbouring local authorities to leverage buying power and synergies in outsourcing deals, e.g. IT/call centre collaboration between local authorities and neighbouring emergency services sharing communications systems. Insourcing – Nearsourcing – Backsourcing – Homeshoring It’s coming home, it’s coming home, outsourcing’s coming home. “It’s cheaper to run a call centre in Burnley than Mumbai these days,” according to Nigel Eastwood, of New Call Telecom, which have recently backshored to home soil. Banking giant Santander has also announced that it will create 500 UK call centre jobs after customers complained of poor service at its contact centres in India. With better staff retention into the bargain – voice-based call centres in India have attrition rates of up to 25-35 per cent. Expect low-cost UK destinations like Scotland and Northern Ireland to make an impact in 2011/12. Social CRM In terms of outsourced contact centres, there is a continuing trend towards social media-based customer relationship management. This involves using social networking tools such as Facebook and Twitter to engage with customers, solve problems and steer debate. To stay in the game, suppliers will need to be able to supply credible social networking skills. To do that they need To find out more about the NOA visit www.noa.co.uk 56 www.outsourcemagazine.co.uk ●●● http://www.noa.co.uk http://www.noa.co.uk http://www.outsourcemagazine.co.uk

Table of Contents for the Digital Edition of Outsource Magazine Issue 25

News & Commentary
Making Contact
Taking the Chair
Clinical Outsourcing Strategies
New Worlds
To Share Or Not To Share?
Trends in Outsourcing Governance
The Next Big Idea
Smart Intelligence
Taking the ChairCracking the Wip
NOA Round-Up
Predicting Success
It’s Not The Contract.
Get Productive
Rigorously Agile
Good Relations
Knowledge Sustainability
Racking Up The Wins
Trust Me... I’m an Outsourcer
Head-to-Head
Top Ten
The Legal view
HfS Round-Up
Online Round-Up
Inside Source
The Last Word

Outsource Magazine Issue 25