Changing Dynamics of Outsourcing - Advantage Latin America

September 10, 2014

By Khiv Singh

_Changing_Dynamics_of_OutsourcingAlmost every research firm is predicting that outsourcing will continue to grow, although not at the same pace as in the last decade. As per the Deloitte 2014 Global Outsourcing Survey, the outsourcing growth is expected to continue at rates of 12%-26% across functions.

Traditionally Asia Pacific has been the preferred destination for outsourcing; though they continue to grow they are increasingly facing stiff competition from companies in Latin America and Eastern Europe as these companies compete more aggressively for outsourcing deals. Companies in Asia Pacific offer cost-competitive, stable and scalable locations, but the upcoming companies in Latin America have the distinct advantage of being in the same time zone, strong English speaking workforce, culture alignment, reduced travel time and management overhead.

For North American companies, over the last 10+ years, labor cost arbitrage has been the biggest driver for outsourcing to Asia Pacific, but that’s changing now. Cost reduction is not the dominant factor any more, and companies are looking for High Value engagement with effectiveness measures.

This shift in rationale for outsourcing is an enormous opportunity for upcoming companies in Latin American to beat their more mature and stable cousins in Asia Pacific. However, if these companies have to emerge as the next IT outsourcing hot spot then they have to show more value from the resource outlays. Increased points of employee efficiency, productivity and measurable performance are some simple metrics to follow since these are the key outsourcing drivers.

The challenge however lies in not having proper tools and data to baseline the efficiency and productivity of the team and continuously measure it to show improvement and value to the client. Effort analytics tools are a great resource measure to improve employee and organizational productivity and have them deliver on the following counts:

Measured Work Output

Measurement is the foundation of productivity, everything begins with this. Organizations that are capturing productivity data across, teams, locations, projects and BU’s are wining. For optimal workforce engagement it is essential to measure current employee productivity and employee utilization. It is imperative for IT outsourcing companies to identify the optimal productivity limit for employee utilization and ensuring that the employee is engaged and productive. An effort analytic tool helps in identifying employee engagement by measuring the proportion of time spent in productive output versus other activities. 

Improved Efficiency

A highly engaged worker is a highly productive worker. While sets of efficiencies and productivity levels are different among different people, an effort analytics tool helps in mapping individual productivity by tracking time spent doing productive work. It also helps the employee with time management by helping them assess workloads, prioritize tasks and meet deadlines. This control over work and time helps in making employees more efficient in their work output and consequently increase productivity and positively impact the client deliverable and engagement.

Facilitate Resource Allocation

Productivity tools are a great help when it comes to resource allocation. While a timesheet will only give you the time spent on a particular project a comprehensive productivity tool will help you analyze the data and identify the difference between ‘actual’ and ‘expected’ effort. The effort analytics help the company understand the team strength required to facilitate a project using a structured and strategic approach.

Streamline Delivery Management

An effort analytics tool helps in delivery management since it gives team leaders accurate data of current workloads. These tools help managers keep track of project progress and help individual contributors manage timelines associated with the project which helps in avoiding slippages and budget overruns allowing the resources focus on the work at hand.

Having an enterprise effort analytics tool facilitates IT outsourcing providers in standardizing processes, gain quantitative insights into effort of employees to ensure alignment with clients and own business goals, identify attainable performance improvement areas and also weed out unprofitable practices. Companies can even share the effort analytics data with their clients to have truly transparent engagement that facilitates objective reviews, governance and builds predictability.

This is a guest post written by Khiv Singh, the AVP of Sales for the Americas at Sapience Analytics. You can learn practical tips on telecommunting and productivity or learn more about their company.

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