The New Service Providers: 'Lift and Shift' Becomes 'Support and Drive Change'

The outsourcing industry took root and grew its first branches on the idea of transferring people, processes and assets from a company or other organization to a service provider. Sure enough, some in our industry still use the phrase “lift and shift” to describe the essence of the business model.

Yet there are many factors coming together to shift the industry away from the “lift and shift” approach.  Offshoring and service provider defined services (those that offer more or different services than the client currently has, or an “orange” to the existing client “apple”) are just a couple of many examples of how the industry has elevated its game.

If you're among those who buy the notion that we’re experiencing a new form of sourcing – less “out” and more “pure” sourcing based on long-term business goals – then I’d like to draw your attention to a very interesting requirement some sourcing clients have begun using.

Essentially, these companies are looking to select service delivery partners that are committed to doing more than just managing the scope of services under contract. They’re looking, instead, to select partners that will help the client accrue benefits “around the deal” by being agents of change to the business operations that are still retained by the client.This makes evaluating and selecting a service provider a whole different ball game: It’s considerably more subjective, with a focus on the degree to which the client has confidence in the conviction and ability of the candidate providers to make a real difference within the operations of the client.

Do the lowest-priced providers win these games? Rarely.It takes a courageous and visionary client executive to take up this sort of transformation, but we’re seeing it more than ever before.

Comments

[Dinesh Goel]

Hi Peter, Can't agree more with that view. I think the sourcing industry (including offshoring) is now slowly maturing to a point where Service Providers will start defining what the client should do for specific business or IT functions as opposed to historical way of just executing what the clients did or wanted them to do. Even improvement projects in the past have been directed by clients. I believe all that is set to change with Service Providers gaining maturity and the pace at which technology change is occuring. At that pace, its only Providers who can stay (at least the winners) ahead of the curve while clients focus on staying ahead of the curve in their core businesses. That equation will truly define the networked partnership between clients and providers. As with any change, it will be first tested and embraced by some courageous organizations and their success will pave the way for others to follow.