WATCH THE WEBINAR ON-DEMAND

As we look toward 2023, economic uncertainty is prime and center. Rising inflation, interest rate hikes, and GDP contraction – matched with low unemployment rates and high talent demand – have left business leaders unsure of what to expect and how to prepare for 2023.

Join Everest Group’s Key Issues 2023 webinar as our experts provide insights into the outlook of the global IT-BP industry and discuss major concerns, expectations, and key trends expected to amplify in 2023.

All the data is based on input from global leaders across enterprises, Global Business Services (GBS), and service providers.

Our speakers will discuss expectations for 2023, including:

• The outlook for global services
• Top business challenges and priorities
• Changes in sourcing spend and service delivery costs
• In-demand digital services and next-generation capabilities
• The evolving strategy for talent, locations, and the workplace

Who should attend?

• CIOs, CDOs, CTOs, CFOs, CPOs
• Service providers
• GBS / Shared services center heads
• Global services leaders
• Locations heads

The current outsourcing climate is showing an increase in offshoring and nearshoring, and organizations are scrambling to adjust their global location selection strategies. Designing a supply base portfolio with an optimal locations mix today is critical to balance talent availability, supply risk, and costs.

To stay ahead of the competition, sourcing practitioners and location strategy professionals need to understand key market dynamics and the opportunities each location presents.

The current outsourcing climate is showing an increase in offshoring and nearshoring, and organizations are scrambling to adjust their global location selection strategies. Designing a supply base portfolio with an optimal locations mix today is critical to balance talent availability, supply risk, and costs.

To stay ahead of the competition, sourcing practitioners and location strategy professionals need to understand key market dynamics and the opportunities each location presents.

Watch this on-demand webinar to hear our analysts discuss the latest global locations market trends and tips for building an effective locations portfolio strategy for 2023.

What questions will the on-demand webinar answer for the participants?

• What guidelines can organizations follow to design a best-fit locations portfolio strategy?
• What are the key considerations for an outsourcing locations selection framework?
• What are the top service delivery locations based on parameters such as talent and skill availability and financial attractiveness?
• How can organizations assess location-related developments and trends in 2023?
• What will the future shoring model look like?

Who Should Attend?

• CPOs
• Sourcing Leaders
• Category managers
• Supplier management leaders
• Heads of indirect spend
• Outsourcing and IT/business process department leaders

The Russia–Ukraine war is further disrupting already deteriorated global supply chains. With the high political tensions, service providers need to implement a mix of short- and long-term approaches like reshoring, ally shoring, and partnerships to overcome the crisis. Read on to understand Global Supply Chain Management Strategy and the global supply chain issues and strategies to build greater resiliency in times of disruption.  

Global supply chain issues and strategies  

The global supply chain has been upset over the past two years, starting with back-to-back global economic setbacks that impacted nearly all goods and services in every industry around the world.

While the supply chain hit on essential goods and medical services from COVID-19 is now plateauing, rising tensions between Russia and Ukraine have only added to the already strained global channels and delivery.

The ripple effects of the Russia-Ukraine war can be seen in rising oil prices, trade restrictions, and financial sanctions. Even though Russia is receiving economic penalties, countries that depend on Russian goods and services have to begin looking for an alternative supply. Similarly, countries depending on Ukraine’s IT outsourcing services are suffering as well.

With these recurring global shocks unsettling global trade dependencies, the changing dynamics of international relations, and the growing uncertainties, governments across the globe are moving to implement policies to make supply chains more resilient.

Impact on service providers  

During the pandemic, the Information Technology Sourcing (ITS) industry observed a dramatic 3% fall in overall growth, and the Business Process Sourcing (BPS) industry growth lagged. The Russia-Ukraine conflict is estimated to impact between 70,000 and 100,000 service professionals in Ukraine, Russia, and Belarus, including highly-qualified workers with digital engineering and IT skills.

The immediate concerns go beyond ITS to Engineering Services (ES) since Ukraine has been a go-to-market with a mature talent pool for both sectors. The full trickle-down effect on BPS is yet to be fully seen. Although BPS’ dependency on Ukraine is minimal, the conflict’s escalation to neighboring countries is expected to more noticeably impact Eastern Europe, which forms the third-largest outsourcing location, following India and the Philippines.

Eastern Europe hosts several service providers across industry verticals, including Banking and Financial Services (BFS). Sixteen major service providers already directly engaged with Everest Group are located in this region, enabling different processes across the BFS vertical, including capital markets, banking operations, and financial crime and compliance. Outsourcing adoption across the payment vertical had been growing as well and could be impacted.

The conflict majorly derails Ukraine’s focus on driving Fintech and tech and banking collaboration that started in 2018 with major FinTechs in Ukraine raising US$7 million in funding. In addition to the growing concerns among service providers, the increasing sanctions have already resulted in volume spillover, and firms are starting to become more vigilant in their strategies to brace for the future.

Global supply chain management strategy to consider

Given the latest scenarios and rising political tensions, countries increasingly are investing in shifting their shoring operations to form leaner and more robust supply chains. This move has been underway since nations began reducing their dependencies on China following the COVID outbreak. Japan has been incentivizing such shifts and encouraging private companies to move operations to countries like India, with friendlier ties than China. Taking a similar approach, the US is now limiting its dependencies on Russia for oil and looking to be self-sustainable in the longer run.

On the financial services front, long before the Russia–Ukraine war, countries have been encouraging citizens to limit dependencies on foreign platforms for their financial transactions. This can be seen by Russia’s MIR and China’s UnionPay advocating for using Rupay for all card payments and lessening its dependence on Visa and Mastercard. Yet, Rupay’s technology operations are partially sourced by an American technology provider. Thus, the question of complete independence, reshoring, or nationalization of financial services is rather difficult.

With rising global tension and the downturn of cyclic economic globalization on the horizon, firms need to consider remediation action for the future. Let’s explore some of the global supply chain management strategies to consider for the near- and long-term.

Five global supply management strategies

Below we have identified popular global supply management strategies and their impact on costs and investments:

In today’s volatile environment, service providers need to assess and weigh the options before making shoring decisions to maintain a balance between cost competitiveness and labor shortages.

With the current disruptions, reshoring and friend-shoring strategies should be explored in the short term. Moving forward, when the climate is more stable, cost optimization and efficiency should be prioritized. Understanding the issues and balancing short- and long-term global supply chain management strategies will help firms get through this disruptive period.

For more about the successful mix of approaches the industry has been using across various domains, see our State of the Market reports.

Read more about the Russia-Ukraine conflict and potential impacts to nearshore European countries and the larger global services industry in our blog, Will Ukraine’s Invasion Have a Domino Effect on Other Geopolitical Equations?

To discuss global supply chain issues and strategies, contact us.

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We just came out of one of the best economies in history, but we now face a recession brought on by the COVID-19 pandemic crisis. Even if there were a V-shaped curve to the recovery, it would not change a looming huge factor going forward: cost reduction is more important than ever before. Although lower cost was not the significant driver in creating value in the digital world, COVID-19 adds a new wrinkle to transformation because it exposed the underlying support for business processes. It set the stage for what is now an overwhelming impetus for companies to take on the risks of changing the way they do business.

Read more in my blog on Forbes

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Learn more about the Everest Group Market Intelligence database

Clearly, the coronavirus (COVID-19) already has an impact on the global economy and broader market. Companies are cancelling conferences and events. They are closing their campuses to outsiders. Travel is restricted. And in some instances, companies impose a work-from-home policy. In the IT and BPO services industry, decision-making is stalled, and we already see clients cancelling planned contracts.

How bad is the disruption to the services industry? It will have a negative impact on revenue growth in the next quarter (ending in June 2020) and potentially in several quarters to come. New projects will be postponed or cancelled. This is because, first, companies simply cannot buy complicated services without some form of travel. Second, any large initiatives require executive support and energy, and they won’t have time to push contracts forward during the next few months.

Read more in my blog on Forbes

Visit our COVID-19 resource center to access all our COVD-19 related insights.

Ongoing Coverage of the Service Delivery Impacts of Coronavirus

Coronavirus, or 2019-ncOv, creates many uncertainties for organizations engaged in the delivery of business process, IT, and engineering services. While the initial focus is the delivery of services from China, geographies such as India and the Philippines (and perhaps others) may also become areas of increased concern. Global service delivery organizations are typically large and involve extensive international mobility, increasing their risk exposure; at the same time, they are also leaders in virtual interactions via phone, email, and video.

This is the first in a series of blogs that explores a range of topics related to these issues and will naturally evolve as events unfold and facts reveal themselves. The blogs are in no way intended to provide scientific or health expertise, but rather focus on the implications and options for service delivery organizations.

These insights are based on our ongoing interactions with organizations operating in impacted areas, our expertise in global service delivery, and our previous experience with clients facing challenges from the SARS, MERS, and Zika viruses, as well as other unique risk situations.

Everest Group recently published a Risk Radar update on China related to coronavirus. With this update, we increased our risk rating for service delivery in China from “low-medium” to “medium.” Members of our Locations Insider, Catalyst, and Market Vista memberships can access the report.

We recommend that business process, IT, and engineering services firms migrate their critical operations to alternate delivery locations and promote the use of teleconferencing and work-from-home policies to ensure business continuity with minimal impact to operations. Additionally, companies should implement precautionary measures in compliance with the government guidelines.

In the coming days, we will publish additional blogs covering a range of topics related to this issue. At this point, mortality rates appear low, so the main concern may continue to be basic availability of business operations in China and implications on travel, families, and in-flight initiatives.

Visit our COVID-19 resource center to access all our COVD-19 related insights.