IAOP European Summit - Cost and Talent

Palladium and Serviceframe have been exhibiting at the IAOP European Summit in Barcelona. We have been lucky that Barcelona is a city that starts late - as we have had a couple of long, detailed and very interesting days - which only spill out into the city as it starts to get moving somewhere between 9 and 11pm!

One of the hot topics this week been using outsourcing to access talent. It has shown up a difference between clients andservice providers. While the service providers have presented strong cases for harnessing global talent, and focussing on moving up the value chain, the clients still maintain a primary focus on cost reduction.

This was expanded by research presented by the Offshore Research Network, showing that clients considering offshoring consider cost far above any other factor. Client currently involved in offshoring still maintain cost as the primary drive - but it is closely followed by other factors including quality, innovation etc.

This provides the outsourcing advisor community with a challenge. How do we help clients considering offshoring to choose the right partner, and to structure the right deal? It seems that it is almost impossible to sell offshoring on anything other than a cost reduction business case - but we also know that once the deal is in place, the significance of delivery ability increases.

One option is to find providers who can flex cost and quality as the client evolves. This takes maturity in terms of contracting, and the scale to be able to operate, and switch between cost arbitrage and value add.

The Nirvana is to find a provider who can deliver both quality and cost reduction. We see this happening on a small subset of providers who can tap very specifically into a vertical - providing sufficient scale to generate real economies of scale, and real world class service into a specific niche. These are few and far between, but provide a truly innovative, partnership approach. For more details please feel free to contact me directly - daniel.berman (at) palladium.ie