The Search for Digital Solutions That Drive Down Costs

Tags: Logistics, Technology , Supply Chain

 Senior executives have set their sights on digital and automated solutions that drive down costs and plan to invest in a number of key areas over the next two years, according to the 2017 State of the Outsourcing, Shared Services, and Operations Industry report by HfS Research and audit, tax, and advisory firm KPMG LLP. Specifically, executives surveyed indicate they’ll invest in robotic processing automation (43%), analytics solutions (34%) and social, mobile, and interactive media (33%) to help propel their digital enterprises.   

“The Outsourcing and Shared Services industry is in a state of flux,” said David J. Brown, KPMG principal and share services and outsourcing advisory global lead. “Management layers have increasingly separate priorities and are morphing together as digital into a combination of business and technology drivers. The C-suite wants digitally driven front-office integration, predictive real-time data, and speed-to-market, while aggressively driving down costs.”  

The survey also found that replacing on premise software solutions with Software-as-a-Service (SaaS) platforms (32%), as well as training and workforce development, and change management initiatives (28%), ranked among the highest priorities of the senior vice presidents and vice presidents and below who were surveyed. Public cloud investments (30%), cognitive computing (28%), and hiring millennials (20%) rounded out the list. The Banking, Financial Services and Insurance (BFSI) sector is the top investor in RPA at 44 percent.  

"There has never been a time in the history of services when we've arrived at such a pivotal turning point,” said Phil Fersht, founder, CEO, and chief analyst at HfS Research. “What used to work for clients is now commodity, and those service providers wanting to avoid this downward spiral into transactional insignificance must make serious investments in their internal capabilities to partner with their clients. They must invest in more people who can work closely with their clients to implement real capabilities – rolling out automation roadmaps, designing digital business models, and working with clients to develop predictive data models and smart cognitive strategies."  

Survey Methodology

KPMG LLP and HfS surveyed approximately 454 enterprise executives (buyers) comprised of advisors/consultants (110); service provider executives (265) and others spread across North America (44%); EMEA (23%); Asia-Pacific (26%); and the rest of the world (7%).  Approximately 41% of respondents are senior vice presidents and above (including C-Suite). Fully 83% were from companies with revenues of $1 billion+ (36% $5 billion +) evenly distributed across Business Financial Services and Insurance; manufacturing; retail; healthcare and pharmaceutical industries.

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