by Stephen Sheahan, Customer Solutions Executive
IBM Global Process Services HR, Learning and Recruitment Services
February 19, 2014
The IAOP Outsourcing World Summit closed with three special general session segments.
The first session, Corporate Social Responsibility in Action, Part 1, was structured as a game show with three judges awarding outsourcing work to two of four “impact sourcing” providers based on their responses to a series of questions about their practices and results. “Impact sourcing” is the term of choice to describe an arm of the services sector that intentionally employs poor or vulnerable individuals under one of three models:
- Non-profit providers operating BPO centers that employ disadvantaged people in locations not traditionally tapped by the outsourcing industry. One example is the U.S. non-profit Digital Divide Data, which has been operating for 10 years in Cambodia and Laos and for the past three years in Kenya.
- Established BPO providers subcontracting to impact sourcing providers, an arrangement typified by efforts in India to subcontract work to rural-based small impact sourcing providers. This effort has been supported by the NASSCOM Foundation to reverse a migration to large cities that had a monopoly on opportunity and to provide work to communities of disabled people.
- Direct employment of poor and disadvantaged people by major BPO providers who implement special outreach and training programs and establish sites in non-traditional locations to establish and maintain pipelines for the skills they need and to grow their business in those areas.
Services provided by the impact sourcing sector are weighted toward data processing and analysis, including data capture, data mining, and large content conversion or digitization projects. But the sector also provides BPO services such as accounting, document management, and even contact center.
The four impact sourcing providers who “competed” for the work were impressive in their accounts of what they have been able to achieve – not just for their workers – but for their clients in terms of near-zero attrition rates, very favorable pricing and consistently exceeded quality requirements.
Impact sourcing is beginning to appear as a component of the social responsibility scrutiny that clients and advisors apply to prospective providers. And with six of the world’s fastest growing economies located on the African continent, this topic deserves attention from global providers who seek to grow at or faster than market pace.
I had interesting exchanges with Jag Dalal and IAOP President Michael Corbett about domestic applications of this kind of global initiative, and both were supportive of the ideas that there are opportunities in the U.S. to use sourcing techniques to alleviate poverty and that such initiatives would also be likely to undermine resistance to outsourcing where it continues to be confused with offshoring.
The second session, Corporate Social Responsibility in Action, Part 2, Best Practices Trends, and Priorities, was a panel discussion that included representatives from the client, provider, and academic communities. This discussion focused more broadly on social responsibility metrics ranging from diversity to greenhouse gas emissions, which clients are increasingly monitoring with respect to their suppliers and potential suppliers’ compliance status. Here’s some information on IBM’s global corporate social responsibility programs: http://www.ibm.com/ibm/responsibility/
The final segment, a Great Minds Town Hall, was another discussion with a larger panel of clients, advisors, providers, and academics who responded to questions that were tweeted from the audience and appeared on a screen in the ballroom. Most of the questions solicited forecasts for the future direction of the industry. The key takeaways (opinions which appeared to be well supported by credible sources) included:
- There will be an increased emphasis from customers on effectiveness (rather than efficiency) and the achievement of business outcomes beyond cost savings.
- Multi-sourcing across a pool of suppliers will continue, with fewer deals being awarded to only one provider.
- While we won’t see a return to the large deals of the past, today’s smaller deals will grow to mid-sized ones as clients look to a lead provider to help them manage “the messy middle” by integrating related services from multiple sources through subcontracts or vendor management arrangements.
- Population demographics will geographically shift the availability of skills. By 2040, half of the populations of the U.S. and Western Europe will be over age 50 while the reverse will be true of India and Brazil.
- More and more, clients will work collaboratively with their providers to solve problems, disclosing more information in the process than they have in the past.
- The migration to “SMAC” (the accepted acronym for “social, mobile, analytics, and cloud”) will continue to generate a great deal of activity over the next few years — especially cloud. Witness the U.S. government’s mandate that 15 percent of its applications be cloud-sourced and the struggle that all of our government agencies are having trying to bring that about.
- SMAC will continue to realign influence within the C-suite, as it is CEOs – not just CIOs — who are driving its adoption to solve business problems.
The 2014 IAOP Outsourcing World Summit will be held in Phoenix, Arizona, from Feb. 16-18. This year will be a tough act to follow.