Offshoring Remains Strong, Says New Supply Chain Research

The maturing global services industry experienced continued growth in 2015, with location activity reaching an all-time high. The drivers of that growth, however, have evolved. Small and mid-sized buyers led growth across industry verticals, and the adoption of new technologies caused disruption in the market, according to Everest Group, a consulting and research firm focused on strategic IT, business services and sourcing.

Looking ahead to 2016, Everest Group predicts service delivery automation (SDA) will become a priority for Global In-house Centers (GICs), often called Shared Services or Captives, and will impact the location portfolio in a variety of ways, including a rise in both consolidation and reshoring, the latter especially in situations where speed-to-market is important.

“Twenty-eight percent of GICs have already implemented SDA across multiple processes and have started reaping the benefits of greater operational efficiencies,” said Salil Dani, vice president in the Global Sourcing team at Everest Group. “Fifty percent are pursuing pilots or actively planning to implement SDA, and 22 percent are thinking about it. So, there is no doubt that SDA is impacting the location portfolio; however, it will not replace offshoring.”

These findings coincide with those contained in A.T. Kearney's 2015 Reshoring Index, which finds that reshoring is failing to keep up with off-shoring.

SC
MR