Service, rather than savings, will be aim for outsourcing in 2014

Gurjit Degun
19 February 2014

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19 February 2014 | Gurjit Degun

Buyers of outsourcing will focus on service rather than cost savings in the next 12 months, according to Deloitte’s support services predictions.

Oliver Hemming, strategy consulting partner in Deloitte’s business services practice, explained companies are now considering value to be measured on outcomes.

“This is putting increasing pressure on outsourcers to find innovative ways of delivering value to clients, while ensuring that contract margins are maintained,” he said. “Innovative service delivery will be crucial; however, minimising risk in such an environment will be a key challenge for outsourcers in 2014.”

Hemming expects a number of facilities management firms to build some international presence to provide multinational corporate clients with “joined up services”.

He explained companies that choose not to build a cross-border presence “will find themselves excluded from certain procurement exercises”. But those that decide to focus on local markets will have enhanced local relationships. “In the next 12 months, we expect to see many providers make a definitive choice between the two models,” said Hemming.

According to Deloitte, international markets are still seen as a primary driver of growth, mainly through mergers and acquisitions.

Hemming also said that data analytics is critical to managing business, efficiency and client feedback. “The usage, capability and availability of analytics will play a key role in deciding which organisations succeed and fail in the future,” he explained.

“The scope for using data analytics is being stretched with companies looking at innovative ways to manage workforce mobility, contract profitability and supply chains. Most have the data available – the challenge they face is having the resource, skill and time to utilise the data to help make business decisions.”

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