Some two-thirds of enterprise outsourcing buyers are struggling to achieve any genuine business value beyond mere cost reduction and efficiency, according to an HfS Research survey.
The survey points to shocking shortfalls in investments enterprises are willing to make in the talent charged with managing and executing outsourcing relationships.
This HfS report explores the question of why many leading enterprises are trapped in a “talent paradox” and suggests steps to break free and manage outsourcing relationships for sustainable value.
The research suggests that:
Most governance team skill sets reflect yesterday’s tactical priorities, preventing many enterprises from realizing greater value from outsourcing.
Enterprises are not investing in training to develop and better equip outsourcing management teams.
Too many providers are not investing in training to develop their account management and delivery teams and treat their people as a commodity resource.
Collectively, the failure to invest in building skills is holding back value creation in outsourcing.
Some leading enterprises and quality providers are pointing the way forward: enterprises by recruiting transformational outsourcing leaders and providers by investing in “upskilling” and developing people.
The research confirms that governance leaders must shift their focus toward the development of their own staff and ensure they are engaging on an equal basis with the capable talent presented by their outsourcing service providers.
Based on the research, we recommend that enterprises:
Manage governance organizations like business functions.
Focus talent investments on enhancing core business skills, not replicating the provider’s skills
Carefully assess providers’ strategic talent
Re-define skill expectations for the retained team
Establish shared “stretch” goals that encourage the development and deployment of strategic skills, and review goals regularly.
Phil Fersht is the founder of HfS Research.
Tony Filippone is executive vice president of research at HfS.