Strategy outsourcing to offshore locations is not new. This has been around for over a decade now and is seeing no decline in interest of all clients and vendors involved. However the way it is being done now has undergone a sea change in past few years. There are multiple changes that are swaying the contours of Strategy outsourcing to offshore locations. Here they are:
Move from a fixed cost fixed time (FTE) model to a more variable and more flexible model (Adhoc, Retainers): Strategy outsourcing started on the lines of business outsourcing in general more than a decade ago. Business outsourcing that relied on vendor proposals of fixed time, fixed people for a fixed fee found relevance in strategy outsourcing too. This has started to change slowly. Projects are now more outcome focused with flexibility in terms of pricing and effort. Clients increasingly ask for projects with specific outcomes to be delivered in specific timelines. This gives flexibility to client in terms of budgets, number of vendors used and to manage the complexity of simultaneously running multiple projects.
More complex assignments: As Strategy outsourcing developed on lines of Business outsourcing, activities that were core, were kept in-house and perceived non-critical activities were outsourced. Assignments related to list building, competitor and customer profiles and newsletters were first ones to go off the block. After repeated cycles of corrections in businesses, companies were left with Strategy functions’ size reduced as it was seen as discretionary spent by businesses; and hence cut during the recessionary periods. These cycles of corrections and hence reductions in Strategy functions’ size has led to lack of experienced and trained hands to deliver on complex strategy assignments. Also at the same time outsourcing vendors have slowly caught up on skills required for delivering on these projects. All this is leading to more and more complex projects getting outsourced. Projects related to M&A target, screening and due diligence, entry strategy plans, supply chain optimization plans, Sales enablement tools are slowly getting embedded in the lexicon of clients and vendors. It is recommended for clients to outsource critical projects as well; along with simpler assignments.
Bridging of trust deficit: As outsourcing services mature, reputed vendors with considerable experience enjoy complete trust of clients. Trust opens sharing of confidential information with vendors, which help them in creating strategies that are more attuned to business realities. It is recommended for clients to do business with partners of repute with considerable experience in Strategy outsourcing
Generalists to Specialists: As Strategy outsourcing is getting more and more complex with every passing year, there has been an increasing demand for industry and functional specialists. More and more projects are being awarded to specialists as compared to Generalists. Specialists understand the business realities faster and provide close to the ground research services
Recommendations and Business Impact: Assignments are now more focused on specific outcomes and hence clients demand business specific recommendations, Implementation roadmaps, Practical sales enablement tools like Battle-cards, Performance focused interactive and visual dashboards and Procurement support with cost advantages built in contract year on year. As an outsourcer, clients should demand clear set of outcomes or practical recommendations for strategy outsourcing work
Merging of multiple methodologies: Increasingly focus of research work is moving from methodology to specific outcomes. Something that used to be desk research once has transformed into a set of simultaneously employed tools to fetch information. This has forced vendors to try out new things like Primary Research, Specialist Panel Interviews, and Advance Analytics for research work that used to aggregation of information and data not too long back.
Increasingly it’s expected that Strategy outsourcing will develop in terms of breadth and depth of assignments with more outcome based contracts with pricing dependent on the specific outcomes and milestones.