Impact Sourcing 101: The Fundamentals of a Powerful Global Sourcing Model | Sherpas in Blue Shirts
I recently concluded an engagement on impact sourcing. Did you say, what? That was my first reaction as well when I initially heard about impact sourcing. I knew about other global services constructs – rural sourcing, crowd sourcing – but not impact sourcing. Turns out, I wasn’t alone. During the course of my research I realized there is a lack of awareness about impact sourcing in the market. For uninitiated folks like me, I hope this blog – the first in a series on the topic – helps create awareness about impact sourcing and its role within global services delivery.
What is impact sourcing?
So, what is impact sourcing?
Impact sourcing (IS) is a business process service delivery model that provides quality and cost at parity with traditional BPO services, but with optimized enhancements such as:
- A qualified, trained, untapped talent pool with skill sets aligned to match client needs,
- Lower attrition rates and higher corresponding levels of employee engagement, and
- Opportunities to fulfill corporate social responsibility and diversity objectives while operating within a traditional BPO framework
Put simply, it is a BPO service delivery model that employs high potential but previously disadvantaged individuals for service delivery that provides positive impact on both business and society.
Here are some facts to set the context:
Impact sourcing is sizable (235,000-245,000 FTEs). There are many instances where it is practiced across countries in Africa (South Africa, Kenya, Nigeria, Egypt, Ghana, Morocco), India, and Philippines. In fact, our research shows that across these countries, impact sourcing constitutes ~12% of the overall BPO market. Not only that, it is growing at a faster clip than the overall BPO market.
What constitutes impact sourcing?
Our experience shows that there is no one answer to what constitutes impact sourcing. Depending on who you are talking to and the social context, impact sourcing constituents vary by how one defines a disadvantaged individual. Broadly, the constituents can be classified in three different categories:
- Economically disadvantaged: Near/below poverty line, located in low income areas, lack of access to jobs or prior work experience
- Socially disadvantaged: Minorities, historically underemployed or marginalized group (e.g., black and Asian communities in South Africa, certain castes/tribes in India), gender groups
- Physically disadvantaged: Differently-abled, diagnosed with health conditions (e.g., HIV/AIDS) limiting equal opportunities in the workforce
Why does it matter?
Impact sourcing has the potential to engage high potential individuals in meaningful employment opportunities and make a real difference in their lives. These individuals in the absence of impact sourcing would not have access to jobs or their situation/background would put them at a disadvantage as compared to mainstream workers. Impact sourcing provides these individuals a platform that helps boost their confidence and provide opportunities to bring themselves at par with the mainstream workers through direct and indirect impact.
- Direct impact: Our research shows that impact sourcing typically leads to an improvement in workers’ lifestyle (40-200% increase in individual income), professional development, increase in confidence levels, reduction in tendency to migrate, and reduced stress levels
- Indirect impact: The increase in individual income typically benefits 3-4 family members due to increased spending power for family and household and facilitates a stable environment. This is especially empowering for women. In addition, it strengthens communities by creating a 3.5-4.0x multiplier effect on the local economy and improves future employability of disadvantaged individuals
So one impact worker can potentially lead to a much wider impact that uplifts many more in the community.
More than a feel good factor
There are many large, global companies across buyer and service provider organizations that currently use impact sourcing for BPO service delivery. These companies experience measurable business benefits of impact sourcing while also positively impacting the worker, their families and communities. In order to scale the practice of impact sourcing, more companies need to adopt the practice.
Our research suggests there is a compelling business case to impact sourcing in addition to the social benefits. This business case is based on strong foundational elements with credible supporting evidence.
To give you an idea of the business benefits of impact sourcing, check out the performance improvements Teleperformance has experienced using impact sourcing, the access to new talent that Aegis has because of their involvement in impact sourcing, and the plans Microsoft has for impact sourcing,
In my next blog in this series, I will share impact sourcing’s value proposition and its business case. Watch this space for more.
Everest Group, supported by The Rockefeller Foundation, conducted an in-depth assessment on impact sourcing (IS) as a business process service delivery construct. The study presents a detailed, fact-based business case for IS that substantiates the benefits of the IS model for Business Process Outsourcing (BPO). Additionally, it sizes the current IS market for BPO work, profiles the landscape, details the business case, and shares experiences of companies through case studies and testimonials. The report focuses on Egypt, Ghana, Kenya, Morocco, Nigeria, South Africa, India, and the Philippines.
The Rockefeller Foundation aims to catalyze the IS sector in Africa through its Digital Jobs Africa Initiative. The Foundation’s role is to ensure positive social and economic impact on 1 million people by supporting high potential but disadvantaged youth to work in the dynamic outsourcing sector in Africa, benefiting them, their families and communities. The Foundation recognizes that the most sustainable and scalable path to achieving this impact is because of the tangible business value impact sourcing provides. Impact sourcing enables companies to purposefully participate in building an inclusive global economy, gaining business efficiencies while changing people’s lives.
Visit our impact sourcing page for more information.
Be sure to view our webinar, The Business Case for Impact Sourcing from October 7, 2014. Download now.
Read part 2 of this blog series.
Read part 3 of this blog series.
Photo credit: The Rockefeller Foundation
