Outsourcing and consulting continues to be a robust market in the consumer goods space. Although it might seem that companies would already have outsourced all they can, that doesn’t appear to be the case. Long-time industry analyst Simon Ellis, program vice president for supply chain at IDC Manufacturing Insights, examines noteworthy new developments in the established external resources market.
Q: How does technology impact business processes associated with external resources?
Ellis: Service providers are nothing if not adaptable, and they have moved quickly into the digital transformation domain. In some instances, projects have been “re-categorized” as digital transformation; in other cases, they are new initiatives. Some of these older (although still very relevant) initiatives include digital commerce, global supply networks and mobility. Newer initiatives include customer/consumer experience, connected consumers, digital personalization, and IoT.
Regardless, there is a growing realization among many consumer products companies that technology is passing them by and partners are key to both keeping up and deriving competitive differentiation.
Q: Recent research shows that IT budgets have increased slightly for the first time in many years. What are the most strategic technology investments that a consumer goods company can make today in outsourcing and consulting?
Ellis: Driven in part by both the threat and the opportunity of digital transformation, industries that engage with the consumer are showing an uptick in their appetite for technology adoption. In the consumer products space specifically, we see IT budgets increasing by slightly more than 6% moving into 2017, and we expect to see that reflected in outsourcing and consulting.
Digital transformation means different things to different companies, and the projects undertaken in 2017 and beyond will reflect these differing perspectives. The question for the consumer products company is whether to engage in evolutionary projects that drive incremental change versus revolutionary projects that drive disruptive change. Although disruptive change may seem more appealing initially, the reality is that it’s less predictable and the results are much less clear.
In 2017, the best thing that companies can do is to ensure that they’re prepared, both from a business process and a technology awareness perspective, to adapt and adopt new capabilities that will drive business efficiency and effectiveness and will best position them to take advantage of new opportunities that arise quickly and completely. Partnering with a flexible and open-minded outsourcing and consulting partner is an important step in this journey.
Solutions providers recognized in this article: Accenture, Capgemini, Clarkston Consulting, Cognizant, Deloitte Consulting, Ernst & Young, HCL Technologies, Hewlett Packard Enterprise, IBM, Infosys, PwC Strategy&, Tata Consultancy Services, Wipro