In this special research report sponsored by Accenture, TechVentive chief executive Brian Sommer looks beyond the current popularity of shared services. As with any business model, Sommer argues, the shared services context is continuing to evolve as it morphs toward outsourcing.The latest development is bundled outsourcing, which entails outsourcing several business processes across multiple functions at one time to a single service provider. This evolution of the outsourcing is fast emerging as a strategy used by business and government executives to drive value into their enterprises while simultaneously shedding cost. As Sommers sums it up: “Shared services and outsourcing are two business models that recognize the power of scale. Combine them and even more opportunities are available for businesses.” This report examines not only the business benefits of bundled outsourcing but considers how companies should construct their road maps for implementing bundled outsourcing and how to conduct the all-important choice of third-party service provider.
I keep on seeing the debate in the media and political fields being restricted to the idea that outsourcing and offshoring is just relating to cost. No my friends, the argument has long moved on. Now the world is indeed flat and global supply chains are in clear evidence even in the banking industry.
Here's another idea. I see the main benefit of this as the next wave. What do I mean by this? Here is an example. Do you guys recall what BarclayCard banged on about when the e-commerce wave was peaking? you setup your e-commerce site, and we will give you a packaged bundled service toolkit, which includes card services, payment, audit, banking, technology, web tools, etc. etc. Just take that idea and blow it up to a much bigger global scale.
So we can go to say a bank in emerging markets in North Africa, South East Asia, Latin America), which has local presence but to build up the infrastructure and operations would be a pain. So a bundled offering would be something like payment services, plus our e-commerce offering, plus our harvest / symphony contracts with our partners. So to simplify massively, what the client gets is a one stop solution for his product structuring, processing, hosting, execution, etc. All he has to worry about is his client and the pricing. This is very simplistic, but there you go. At this moment this is relatively common in the asset management space but there is a very large space in the other financial industry product spaces.
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