“May you live in interesting times” is, allegedly, an old Chinese curse. Well, for the financial sector – and consequently the rest of the world – these are interesting times indeed; “interesting” probably isn’t the word most commonly used in banking circles to describe the current situation but there’s certainly plenty of cursing. I’ve been fortunate enough to share my morning commute over the past two days with an erstwhile employee of Lehman in London and suffice it to say that however interesting times are now they’re going to be a lot more so when next month’s mortgage payments, credit card bills etc start mounting up. Likewise for the rest of us: the real impact of what’s happening right now won’t be felt for a while yet, and in the meantime who knows what other world-shaking events might lie round the corner? One thing’s for sure: the aftershocks will be felt for years ahead.
Some of those aftershocks, of course, will surge through the shared services space and the outsourcing sector – but in markedly different ways. It’s far too early to start any holistic assessment but there’s nothing wrong with some good old-fashioned wild speculation (other than that wild speculation was of course what got us into this mess in the first place). In outsourcing for instance it’s pretty likely that while there may be short-term difficulties (and today it was noticeable that several leading outsourcing stocks were taking pretty big nosedives, albeit temporary) in the long run the credit crunch could lead to serious growth opportunities as panicky businesses take the outsourcing route to cost-cutting.
See how WNS’ Neeraj Bhargava in an exclusive interview with SSON looked at the pros and cons of the current situation:
“I think the credit crunch and what is possibly recession, high inflation, does create a difficult environment for our clients or our prospective clients. They’re seeing a lot of dramatic changes in their business. That creates two issues simultaneously: first, the need to cut costs and focus on core business; and second, they perceive that need to be more acute. That is, in fact, very positive for our business. The flip-side to that is that there is also a lot more pressure on dealing with day-to-day issues, there will be more M&A activity, people have less money to spend on change: these are distractions that sometimes constrain them from taking outsourcing decisions. So it’s a bit of a mixed bag.”
As for shared services: well, there’s plenty to talk about there. So much so that I’m convening another roundtable debate for the beginning of October on just this topic. You can read the transcript of “Shared Services in the Face of a Financial Crisis” on this very site once, er, it’s been transcribed. Meanwhile you can send in any thoughts you might have on the issue to me here; I’ll try to cover as many of your thoughts as possible on the roundtable agenda.
Until next time,
Jamie
Tags: crisis, Lehman, NeerajBhargava, Outsourcing, roundtable, sharedservices, SSON, WNS
