The Hackett Group

Challenge

However, Offshoring and Outsourcing alone are not "silver bullets." Offshoring in combination with other transformation initiatives will drive performance optimization. Since the late 1990s, organizations in North America and Europe have outsourced a growing portion of their back office functions, like IT Infrastructure and Applications Development, Human Resources and Finance and Accounting. Most of these transactions represented a "Lift and Shift" strategy whereby current processes were moved from a high costs to a low costs geography but little or no transformation either preceded or followed the process transition. As expected, few of these transactions enabled company to achieve world-class performance. Hackett believes the next wave of Business Process Outsourcing, (BPO) transactions will encompass both a "Transform and Shift" and "Shift and Transform" strategies. This expected change in sourcing strategy will have a profound impact on how sourcing strategies are formulated and executed.

Transform and shift scenario 1: Offshore first
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World-class companies have continued to leverage technology and best practices to widen the gap between their performance and that of their peers. In recent years, world-class companies have shifted their focus to offshoring and outsourcing business activities to drive higher performance. Globalization provides the most compelling event in the SG&A world for the next 5-10 years. The impact of service globalization is of such magnitude that it will challenge the conventional wisdoms that have guided the way service delivery models for SG&A have been architected over the past two decades. Ensuring the correct mix of structure, people, performance and technology will result in the optimum balance of an effective and efficient global organization.

Hackett Solution

Hackett uses its market leading intellectual property on world-class performance and best practices and its deep knowledge of the BPO service provider capabilities to assist clients in selecting and contracting with the optimal BPO service provider that can enable the client to implement its transformation roadmap via a "Shift and Transform" sourcing strategy. Not only is more value derived from the project, but the actual project timetable can be significantly accelerated reducing costs and mitigating project risks for all stakeholders. Although the majority of the traditional sourcing advisors can assist their clients to execute a "Lift and Shift" outsourcing strategy.

Hackett advisors offer the optimum combination of in-depth functional, transformation and sourcing expertise. Our approach is to treat business process outsourcers as client partners and to work collaboratively with them, to drive innovative solutions through targeted workshops and to look at their transformation skills subsequent to replicating business processes in an outsourced environment. By focusing on successfully integrating retained and outsourced functions, we ensure that end-to-end processes are integrated and perform at world-class levels.