“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every
difficulty.” – Winston Churchill
These turbulent economic times are a growth opportunity for the outsourcing industry. We like
to say we are a good company in good economic times, but a great company in bad economic
times.
During the last economic slowdown, industry growth continued despite tighter budgets in the
commercial and public sectors – largely because BPO service offerings were valued and sought
after. Once again, there is a sense that enterprises have not only a hunger - some say even
desperation – to look for ways to save money in this economy.
This growth will lead to job creation in the outsourcing industry. As an anecdotal example, ACS
recently completed the hiring of more than 1,100 people in the Raleigh, N.C. area, over a four
month period. We expect our renewal rates to be at about 90% for the remainder of FY09, which
will also lead to job growth.
Companies that in the past have been hesitant to embrace outsourcing, are now likely to look at
new opportunities and will also be willing to outsource higher tier services. Companies are
looking at short term solutions that can bring savings in 30-60 days, because some firms may not
survive much longer. Once these new customers experience these new solutions and are
comfortable that they are not losing quality, but are saving money, they will see that what was
once viewed as a short term solution actually also adds long term value to their bottom line.
Again, creating new opportunities and jobs in the outsourcing industry.
The jobs will be located all over the world and will include, at home workers, rural sourcing,
domestic, near shore and off shore. Businesses will have to determine which model best supports
their needs and buffers their bottom line. Those decisions will vary by company.
Not every outsourcing firm will be as well positioned to seize this opportunity. BPO firms not
only have to offer a high quality mix of horizontal and vertical solutions, their diversity will have
to include a variety of alternatives to meet a customers needs such as location, cost and other
sensitivities. Companies that can offer experience, expertise and expediency will thrive in this
economy.
Many small to midsize companies may incorrectly believe they cannot afford outsourced
solutions. They may not be able to afford customized solutions, but Business Process Utility
(BPU) offers a standardized solution that may be a perfect fit for smaller businesses. This
innovative offering will also help grow the industry, possibly adding jobs.
BPU is an emerging trend—a faster, more economical level of outsourcing that can be applied to
almost any industry. Instead of creating a customized outsourcing solution, BPU applies existing
standardized systems designed by using best practices.
Implementation time is faster. In many cases, transaction-based pricing lets companies pay only
for what and how much they use. Economies of scale and standardization keep costs down.
Some BPU examples include payments such as loan processing, claims administration, toll ticket
processing, and payroll processing.
There is another scenario where the outsourcing industry will grow, but not create any net new
jobs. Asset acquisitions are gaining in popularity. BPO firms can take over the real estate,
personnel and other recurring costs, eliminating a variety of problems for a customer – an
inefficient process, an inexperienced work force, a facility that is not filled to capacity and other
issues – and make them our own. Depending upon the way the deal is structured, the customer
can also see an immediate infusion of cash as well as a long term solution that will generate
efficiencies and savings over time for the company.
Due to the current economic situation, the industry should expect more activity and larger deals.
That trend will continue based on the fact that we are also seeing a more aggressive approach
from customers. Even companies that are on solid financial footing can and are using the current
business climate as the rationale to make changes that while not essential to their survival, will
result in a marked improvement in their bottom line.
About Tom Blodgett
Tom Blodgett is Executive Vice President and Group President for ACS’ Business Process
Solutions line of business. Tom has nearly 20 years of senior management expertise in business
process outsourcing (BPO). Blodgett is a pioneer in the BPO arena. In 1985, his family founded
Unibase, a data entry company acquired by ACS in 1996. The acquisition expanded ACS’
capabilities in the relatively new BPO services market and created an entire service segment
dedicated to delivering superior business process solutions. His Business Process Solutions
group represents $1.3 billion in annual revenue.
About ACS
ACS touches millions of lives every day. As an outsourcing partner to some of the world’s most
complex corporations and governments, we focus on serving their business operations so they
can serve their clients.
As a FORTUNE 500 company with approximately 70,000 people, our presence is wide,
supporting client operations in more than 100 countries. But our contribution to our clients’
business success runs deep – by simplifying their business processes and improving their
information technology capabilities
You can earn more about ACS at http://www.acs-inc.com.