Just wrapped up a week of two sister events – Shared Services & Outsourcing in Banking, Financial Services, and Insurance – with one in Atlanta and the other in New York. After four days of debate and discussion with a cross-section of industry leaders, I offer a few observations.
- In Atlanta, a gentle snowfall is a nightmare, not a pleasant dream. You probably saw the news coverage…and it is accurate. A trivial amount of white stuff (which turned to ice) completely shut down the town — but, luckily, not the hotel bar. We were scheduled to fly from Atlanta to NY on Wednesday night for the NY version of the event…and we actually made it to New York about 10 minutes early. BUT, the uncertainty throughout the day of >60% flights being canceled, shifting to Atlanta’s subway (MARTA), and long security lines made it feel like an miracle of human achievement. Never a good sign when the benches in the airport are all occupied by people sleeping.
- Analytics is starting to become real. We heard multiple examples of real analytics efforts and impact. Certainly it is early days, but the options are beginning to take shape and some are creating innovative approaches. One example included distributing mobile devices into a customer base to help capture previously unstructured data far in advance of when the information actually makes its way into normal market datasets. Due to the nature of financial services products (actuarial science in insurance, credit scoring in cards, etc.), BFSI should have a head start on organizational acceptance of the value of analytics…other industries should make sure to pay attention to their learnings.
- Global In-house Centers (GICs) and third-party outsourcing are both alive and well. Essentially all of the larger organizations participating in the events make use of both internal delivery and external delivery models. Nothing suggests this is about to change. But there is a general sentiment toward favoring internal models. Unless service providers can start demonstrating value-add beyond labor arbitrage, predictable workloads which benefit from business context will be shifting to the GIC model. Offshore is no longer scary, and large financial institutions can effectively manage operations to increasingly help generate change and transformation.
- The Goliaths of the third-party landscape are seeing a lot more Davids. Many participants reported being able to work more collaboratively with their smaller service providers in terms of structuring deals, adjusting services, preparing for future change, and other important dimensions. Some of this is due to differences in margin expectations and risk appetite, but the largest factor may simply be that the smaller providers provide more and better leadership at the account level – top executives are involved and make a difference. This trend stretched across IT, contact center, and transactional BPO. The large players need to ensure they are scaling and empowering real account-level leadership or this dynamic will only continue to grow.
Great discussions and a fun group of people – thanks to everyone involved for a nice end to January.