4 January 2012:
As the global economy begins to show signs of improvement, manufacturing companies are shifting their focus to growth while still keeping a close eye on costs. No longer are organizations just looking for low-cost transaction processing or sourcing; they also want solutions that can deliver business outcomes and effectively support them in addressing their challenges. Increasingly companies are turning to Business Process Outsourcing (BPO) to help them achieve both goals, through labor arbitrage and economies of scale, together with optimized common processes and improved service levels.
Manufacturers historically have outsourced non-core processes such as human resources and finance, and in recent years have extended their outsourcing activities to areas like procurement and supply chain. Many companies are now beginning to further expand their outsourcing to higher-value services such as product design and innovation; marketing, sales and service management; and even social media.
To better understand emerging trends in BPO in the manufacturing industry and to identify areas with new growth potential, Capgemini conducted research looking at the practices of leading companies operating in segments such as aerospace and defense, automotive, high tech and industrial products. The research is designed to help manufacturing organizations identify functions to evaluate in their own operations where BPO can assist in optimizing their bottom line and improving the top line.
Steady Growth Expected for BPO Market The global BPO market is expected to grow at an average of 6.5% CAAGR until 2015.1 This is driven both by the continued growth of the traditionally outsourced areas of finance and accounting, human resources and customer service functions, and the rapid expansion of new scope areas such as supply chain management, product design and innovation, and marketing support. To get a more detailed view of what this growth will look like, our research evaluated current and emerging BPO trends within the manufacturing industry using our “Networked Value Circle” model (see previous page).
The research focused on five functional areas: finance and accounting (F&A), product design and innovation, supply chain management (SCM), marketing, sales and service (MSS), and human resources (HR). The study highlighted the following:
- In F&A new offerings like decision support and financial planning and analysis will fuel growth in the coming years.
- The product design and innovation market, while small, is expected to post gains in the next few years.
- In SCM, 4PL logistics integration will be an area of significant growth.
- In MSS, both customer service management and technical publications will remain high- growth areas.
- In HR, growth is expected to be slow with a large number of specialized players in a relatively mature market.