Exploring the Value Proposition for Impact Sourcing

Impact Sourcing, or outsourcing that benefits disadvantaged individuals, has a big role to play in promoting youth employment in developing countries. Supported by the Rockefeller Foundation, Accenture Development Partnerships investigates the value proposition of Impact Sourcing and makes recommendations for moving the initiative forward.

Impact Sourcing is outsourcing that benefits disadvantaged individuals in low-employment areas. It aims to provide higher-income employment and access to new income opportunities to individuals who might not otherwise be employed in this sector.

The current outsourcing market is estimated at $512 billion. While the majority of outsourcing services are delivered from India, a growing number of outsourcers are establishing delivery centers or otherwise sourcing labor from other low-income locations, such as the Philippines, Mauritius and Brazil. Other emerging markets, like Kenya, Guyana, Rwanda and Uganda, have included outsourcing in their national growth strategy. These countries are most likely to benefit economically and socially from sustainable job creation and growth. At the same time, Asia, Africa and Latin America will account for 97 percent of population growth over the next 20 years, making the developing world the largest source of potential future employees.

This study was undertaken by Accenture Development Partnerships with the support of the Poverty Reduction through Information and Digital Employment (PRIDE) initiative of the Rockefeller Foundation.

One of the greatest issues facing developing countries is a growing population in need of employment. To employ youth entering the workforce and help decrease youth unemployment by 50 percent, over 700 million jobs will need to be created by 2020.

Impact Sourcing can help by providing previously unavailable employment opportunities to talented resource pools.

The value proposition for Impact Sourcing is strong: it directly impacts those most in need. However the additive nature of Impact Sourcing means that clients can also benefit through a positive impact to their corporate social responsibility programs, and an outsourcing provider has new differentiated offerings to take to the marketplace.

Additionally, there appears to be strong potential demand from large, international companies to source a portion of their outsourcing portfolio from Impact Sourcing. Based on interview data from 322 Accenture client teams across 29 different countries and all industry verticals, the research finds that nearly 50 percent of these organizations would potentially support some form of Impact Sourcing for either Business Process Outsourcing, Application Outsourcing or Infrastructure Outsourcing services.

This growing client demand for Impact Sourcing results from:

• The changing delivery model.

• Continued cost pressures on corporations and governments.

• The expanded list of countries that can compete for outsourcing work due to increasing reach and decreasing cost of telecommunications.

• Increasing demand for digitized records in the public and private sectors.

• eGovernment trends.

In order to move this initiative forward and for it to gain momentum and become a vital part of the outsourcing sector, a number of actions need to be taken.

• Increase awareness of Impact Sourcing. Engage with professional organizations, particularly those in the field of outsourcing and engage with the existing outsourcing advisory organizations to spread understanding of the offering.

• Seek to scale Impact Sourcing. Leverage alliances with large-scale traditional outsourcers who have access to large client contracts, and focus Impact Sourcing operations with an intention to scale in areas with an established outsourcing center.

• Traditional outsourcers to increase Impact Sourcing initiatives. Impact Sourcing initiatives are being demanded by global clients and offer significant benefits to all ecosystem players.

• Recognize existing on-shore and off-shore opportunities. Impact Sourcing can also exist to support disadvantaged individuals within developed countries.

• Establish credible governance structures. To preserve the integrity of Impact Sourcing and ensure its core messages are not compromised, credible governance structures are vital.

• Expand the definition of Impact Sourcing. Impact Sourcing should include any focus on sourcing employees from uniquely disadvantaged groups, rather than only focusing on outsourcing.

• Promote and support Impact Sourcing initiatives. Monitor Impact Sourcing pilots to ensure they have the necessary support and backing from all players within the ecosystem.

• Test Impact Sourcing initiatives. Impact Sourcing can be supported and tested through varying initiatives offering different degrees of involvement, investment and impact.