Industrial Strength Services

One aspect of my job that I really enjoy is the amount of time I spend with the Service Providers in the global outsourcing industry. There's a growing universe of exceptional companies that are winning, delivering, and growing relationships with some very demanding clients.

In the spirit of being the most informed source of objective advice for clients, everyone at TPI is encouraged to remain connected with the ever-changing developments in our industry. That's a task easier said than done.

One of the more common themes we're hearing these days relates to "industrializing services" or "services productization". What this means, at least to me, is a focus on establishing defined service offerings, brought to market with defined terms.

Now, most people might ask "what's so novel about that"?  Well, the outsourcing industry has long been growing through a model called "lift and shift" - essentially having the Service Providers assume responsibility for a client's existing operations. That includes its systems, processes, and people.

With the acceleration of offshore delivery models, and the challenges experienced in achieving leverage through adopting so many disparate client environments, some of the leading Service Providers have concluded that the time has come to change the game.

I am especially intrigued by how receptive clients - within IT, HR, and other business process functions - have been to engage in Provider-defined solutions. Most experienced buyers of outsourcing, and especially those who have endured a first-generation "lift and shift" relationship, know that the outsourcing business model is predicated on the achievement of leverage. That means taking the resources devoted to a business operation from a 1-to-1 equation to 1-to-more.

I think that 2007 is the year that we will see several leading Service Providers win some sizable outsourcing deals based upon their conviction around solutions that THEY define, not operations that they inherit.