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Survey Reports on State of Outsourcing and Shared Services Market

KPMG Global Advisory and HfS Research reported in a joint survey that the outsourcing and shared services market continues to be in a state of change in 2017, pointing to a combination of business drivers and technological advances as the cause.

The global business services (GBS) model (which delivers core business processes such as finance and accounting, human resources, information technology (IT), sourcing and procurement, and internal customer care to organizations) is the most prevalent model in organizations with revenues greater than $5 billion, and shows sustained growth. Smaller companies continue to adopt more centralized operating models.

According to enterprise leadership, the top four investment priorities are robotics process automation (RPA), customer-centric digital enablement (social/mobile/interactive), analytics solutions, and the replacement of on-premises solutions with SaaS platforms. Large companies are leading the way with RPA adoption across business processes, looking to suppliers for solutions, and showing that they are willing to invest in new technologies.

Despite the focus on market changes, some survey findings are consistent with past findings. Cost reduction remains the number-one directive with respect to outsourcing and shared services strategies among companies of all sizes and regions, and IT continues to be the largest business function using an outsourcing model. However, overall outsourcing has increased since 2013, with sales, marketing, and procurement seeing the largest increases. The survey also found a continuing disconnect between management levels, including differing opinions on the effectiveness of outsourcing.

The survey also covers a range of other topics including industry-specific changes in operating models, insights on outsourcing and shared services use, and the state of off-shoring and near-shoring use.

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About this Author

Emily Lowe, Corporate finance Attorney, Morgan Lewis
Of Counsel

Emily R. Lowe represents clients in commercial transactions, with a focus on the acquisition, use, protection, development, and commercialization of technology and biotechnology. Emily helps domestic and international companies commercialize their products through various commercial vehicles, including manufacturing and supply agreements and distribution strategies, and development and licensing agreements.

Katherine B. O'Keefe, Morgan Lewis, Technology Lawyer

Katherine B. O’Keefe is part of a team that handles critical commercial transactions that enable our clients to run their business operations effectively. The team is focused on technology transactions, including licensing, services, and alliance deals that involve emerging technologies such as cloud computing, software as a service (SaaS), and data analytics. Our technology, outsourcing, and commercial transactions lawyers assist clients in managing their online presence, from website development, hosting, and maintenance; to privacy and use policies; to data breach and retention issues.