Observations from The Outsourcing Institute's Service Provider Summit, April 23, 2009, New York City
The Outsourcing Institute hosted an industry wide day of ideas and collaboration last week at the generous accommodations of the Law Offices of Kelley, Drye & Warren, Manhattan. The event attracted a well rounded consortium of outsourcing leaders; analysts and advisors; on-, near- and off-shore ITO, BPO and other providers; contract and negotiation experts; sales, marketing and branding specialists; relationship and governance leaders, and, of course, buy-side executives. Despite the lingering economic challenges which frankly everyone is tired of discussing, this was an energized, dynamic and optimistic group.
Current key buyer and market trends were presented by top researchers and analysts in the opening session, including the following. Sole source activities are up markedly year-to-date. Buyers are 'trading' scope increases with their incumbent providers in exchange for lower costs. It is becoming a great time to be a Tier Two provider as some of the largest outsourcers are having trouble shedding cost fast enough to meet buyer desires. This appears especially true for Tier Two's who can exploit domain expertise in BPO solutions (an area it was suggested they can often out execute the larger players).
Hot industries for outsourcing include Government, Pharmaceuticals, Healthcare, and Consumer goods. High activity functional areas are application development and maintenance, finance and accounting (particularly accounts payable) and IT.
A strong recommendation from the panel was for providers to concentrate on existing clients for revenue growth, especially where there are opportunities to provide client solutions that could create fast and measurable cost reductions. Deploying a proactive, consultative selling model when taking this approach was highly advised, rather than waiting for buyers to see the opportunities and ask for proposals!
There was encouraging news for emerging market providers as it was suggested buyers continue looking to these newer locales for solutions. (Providers, make sure you are sales ready with a compelling value proposition and clear differentiators.)
Speaking of Sales Ready, 3forward president Dan Hudson ran an afternoon breakout on Sales Best Practices that drew many Summit attendees. The topic, Old Rules, New Tools, generated some great dialogue with the many company and sales leaders on where they should focus their efforts. The presentation is available on 3forward's home page and even more recommendation are covered in Dan's recent blog post It’s Not Too Late to Start 2010 (Sales) Planning.
Of all the breakouts and topics of the day, the social networking panel that wrapped up the Summit seemed to be the hottest. Three leading practitioners in the 2.0 technology and marketing world, Jennifer Naylor, Vidar Brekke and Jeremy Epstein, provided simplified but powerful explanations of what social networking for the business-to-business world "Is and is not." Each offered a number of examples of the tools and platforms and plenty of recommendations on where to start. Their session concluded with these closing points:
ONE, the wave of change started by social networking has just begun and will flatten many industries, companies and processes – and dramatically transform many others – as it unfolds;
TWO, while many social networking tools do sit on top of 'low cost platforms' the process of participation requires a measurable investment in strategy, time and resources for it to succeed;
THREE, It's not a question of if your company should participate, it's a matter of when, where and how you decide to get started.
The NY Service Provider Summit was a great combination of skill sets, backgrounds, experience and chemistry. It was very well choreographed and moderated by Frank Casale, CEO and Founder of The Outsourcing Institute (OI) and industry expert Jerry Durant of IIOM. OI by the way has a newly established Facebook page where many of the Summit presenters and participants are continuing to share ideas and discussions. Feel free to drop by to get connected with this group and many others in the outsourcing community. We also invite you to browse 3forward's Facebook page and encourage you to join our conversations.
To all our fellow Service Provider Summit attendees, last week was a great reminder of how many excellent ideas are out there and whatever help, guidance or advice anyone needs is simply a click away. Don't be shy!