As we noted in a recent article on this blog, many previously non-core activities (technology is the big one) are now viewed as being integral to most organisations. But at the same time, there’s a recognition that a combination of greater automation and the need for diverse and fast-changing skills will mean greater reliance on external support—and that’s a complete volte-face on the past, when core functions were kept in-house.
So, good news for outsourcing companies? Maybe, maybe not. Their problem, as most are aware, is that clients aren’t looking for 10-year deals in which entire business functions transfer to the outsourcer, who then—in theory—has the time to design a service that’s both better and cheaper for the client, and profitable for the supplier. I say “in theory” because, as everyone also knows, the reality was often different: Opportunities to think creatively about how people work were constrained by legacy technology and by contractual relationships that discouraged investment.