Issue link: https://www.e-digitaleditions.com/i/138053
Market Report Companies are surprisingly insecure about the quality of their talent. Barely one-third of enterprise outsource buyers believe that their talent responsible for managing the service relationship have the ability to drive innovation and define business outcomes beyond cost and efficiency. that outsourcing is much more than a transactional contract. It is an ongoing partnership that requires leadership, insight, and collaboration between an enterprise customer and its outsourcing provider in order to create real business value. Too many outsourcing relationships continue to focus on solving yesterday's challenges, namely driving out labor costs, mitigating risks, and achieving a basic level of operational performance. A Major Paradox to develop these capabilities internally. Only 45 percent of The study reveals that organizations are not blind to the companies have formal training programs in place for their importance of certain skills to achieve outsourcing success. In outsourcing management teams in continuous improvement, fact, two highly strategic business skills emerged among the top and only one-quarter train their people in analytical skills. This five objectives of today's enterprises: defining business outcomes has also proven to be a challenge for outsourcing providers. Only beyond cost reduction and efficiency, and influencing executives. 40 percent of providers have formal training programs for their The business objectives that have increased most in importance staffs to develop industry skills and only about half train their include improving analytics, defining business outcomes, and people in relationship management. driving innovation. Sound familiar? All of these are critical to the • The lack of career paths for outsourcing management staff successful realization of value from HRO. leads to increased attrition, lack of motivation, and/or half- However, the executives surveyed in this report said their teams are hearted performance. Collectively, the failure to invest in most proficient only in tactical skills, such as contract negotiations building skills is holding back value creation in the outsourcing and adding additional volumes to existing services. This is because industry. Only 34 percent of outsourcing management companies have appointed outsourcing governance leaders who staff reports being satisfied with their career development tend to be operational managers with experience in managing opportunities. large departments of operational personnel. They follow rules and processes to ensure a function operates efficiently, rather than These findings serve as a wake-up call for buyers and providers seeking to align outsourcing relationships with corporate growth alike—particularly for HRO professionals—at a time when the objectives and business outcomes. outsourcing industry has evolved from a tactical cost-reduction exercise to a powerful enabler for achieving strategic business Despite the gap, some enterprises are leading the way by recruiting outcomes. Some enterprises are only just waking up to the reality transformational governance leaders. Successful firms emphasize JUNE 2013 | www.hrotoday.com [13]