The role of outsourcing as a part of a service delivery model has typically been evaluated against the forces of Cost, Quality & Risk, with the cost usually being the dominant factor and the key driver of commercial structures, transformation expectations, performance assessment and success measures.
Cost issues have also been at the root cause of client/partner relationship issues, misaligned objectives and perceptions of outsourcing service provider failures. It is clear that COVID-19 will change the landscape of how outsourcing might deliver value and be assessed as part of the operating model of the future. The emphasis will clearly need to shift more from engaging vendors to drive cost down to mitigating risk and ensuring customers can continue to be serviced in their chosen way.
In the future, with a greater virtual and flexible workforce and greater use of automation in the customer journey, the cost-saving differential between inhouse and outsourced operations will be marginalised. But the risk issues of uncertain economic cycles, workforce ownership and overhead, highly volatile demand and increasing compliance, brand and consumer trust issues mean that the role of outsourcing will have a different, yet arguably more important role in the future.
This will require different thinking to the planning, designing, selecting, engaging and contracting of outsourcing partners.
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