When first introduced, outsourcing business processes provided companies with significant savings and efficiencies in the first wave of this strategy for cost containment and creating strategic advantages. In the next wave, lower cost labor and off-shoring of those processes took this practice to the next level by allowing companies to reap dramatic savings in salary and benefits related expenses. Automating those off-shore tasks and repatriating the activities associated with management and decision making is creating the third wave of transformation for the outsourcing industry.
Each wave has introduced considerable change and disruption to the business model that it replaced. Outsourcing itself changed the landscape forever and created giants such as IBM Global Services, Electronic Data Systems and others. Functionally specific models followed in areas such as Human Resources, Payroll, Application Development and others. The labor arbitrage advantages of wave two created current giants such as Infosys, TCS, Wipro and a host of midsize and smaller specialty IT and Business Process Outsourcing companies. At the same time, this second wave transformed the landscape of the original outsourcing world and companies such as EDS, ACS, Perot Systems and others were acquired or merged into other companies.
Here comes wave three! Disruption. Innovation. Advancement.
Like most technologically driven forces, this wave promises to be equally disruptive and hit even faster. New brands will emerge as leaders and former leaders will fall back to the pack. Eventually, for most companies it won’t be a matter of “Will I apply robotic automation to my business processes“, but “Which processes will I leave untouched by this innovation.”
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