Cloud-Based Outsourcing Solutions on the Rise

Driven by the need for flexibility and speed, organizations will increasingly implement cloud-based outsourcing solutions in the coming year, according to results from a global membership survey of the International Association of Outsourcing Professionals (IAOP).

IAOP Chairman Michael Corbett shared findings from the association’s annual member survey, based on inputs from its more than 110,000 members and affiliates worldwide, during his keynote remarks to open The Outsourcing World Summit®.

Current social and economic trends, new outsourcing approaches, internal teams of skilled professionals and the continued development of outsourcing as a management discipline all are positive for the industry’s future, he said.

“We stand on the threshold of the Golden Age of Outsourcing,” Corbett said. “The components are all in place for 2011 to be the year that outsourcing becomes a truly global platform for real business transformation and sustainable growth.”

New Outsourcing Platform Emerging
Released in February, the survey (conducted with the support of Accenture) found that two-thirds of outsourcing customers have or will implement cloud or Internet-based, computing solutions.

Respondents said they plan to use cloud based outsourcing solutions to manage customer relationships, human resources, finances, and documents. They also plan to use it to process transactions and deliver other administrative services.

“Cloud based outsourcing is emerging as one of the biggest changes underway in the outsourcing delivery model,” Corbett said. “Speed and flexibility are the biggest benefit customers see in these solutions.”

The survey also found that outsourcing has expanded significantly as both a management practice and an industry over the past year and will continue its growth. Eighty percent of customers indicated their organizations plan to pursue more new outsourcing opportunities in 2011.

As business conditions continue to improve, companies are increasing their use of outsourcing to meet new challenges deeper in their organizations and to deliver better outcomes. Clients are looking for outsourcing providers to bring industry expertise, analytics, and innovation to the table, leading to better business insight and greater value creation, said Mike Salvino, group chief executive, BPO, at Accenture.

Increasing business flexibility was a top reason for outsourcing given by 59% of the members participating in the survey as was achieving long- and short-term savings. Using outsourcing to support future business opportunities is more important now to 62% of respondents, and accessing skills and talent is increasingly important to 40%.

The survey also found that outsourcing is increasingly driven by internal teams of professionals. Respondents said the number of outsourcing professionals working at their organizations grew by more than 40%, with wages and compensation also going up in many organizations.

“Outsourcing has itself become a recognized organizational competency,” he said. “Companies are beginning to make the necessary investments to build these skills across their organizations. This new breed of outsourcing professional is advancing management practices and processes that produce consistent, high quality outcomes.”

Another key finding is the continued push by outsourcing customers and providers to make their programs more socially responsible. The survey showed about 70% of members responding say that Corporate Social Responsibility (CSR) is an important to critical part of their outsourcing programs.