So your predictions for next year are in, and published, and disseminated around the world… And now as promised it’s my turn. I have no doubt that these forecasts will be erroneous to the point of hilarity, but I’m a man of my word and having received dozens of submissions from you guys I’d be a pretty pathetic figure not to reciprocate. So here goes:
- Currency. Next year will see a lot of headaches (or be one big headache?) for anyone responsible for planning a shared services strategy but currency will be one of the very biggest. Location decisions have never been particularly straightforward – especially for those torn between onshoring, nearshoring and any other –shoring you can consider – but with major currencies all seemingly in the process of correcting against each other the relative and absolute costs – particularly over the course of a long-term implementation – of establishing an SSO are as hard to calculate now as they’ve ever been. (Look at sterling: the predicted parity of the pound and the euro means that some offshoring decisions for UK companies may not now make sense on purely cost-based reasoning – or might now involve forced moves much further afield to locations where significant labor arbitrage benefits can still be found.) Even the most able and experienced currency experts have been less willing than usual to put down forecasts for market behaviour next year. Nevertheless, here’s me putting money where my typing fingers are: I see 2009 ending with €1=$1.30, £1=€1.05 and $1=¥100. And I’m prepared for your laughter come 2010. Although not so prepared that I’m willing to take a punt on where the rupee will be in 12 months’ time.
- China. While the Chinese economy’s set to grow next year, unlike most western equivalents, it’s by no means the rosiest of pictures. Exports are already being hit by decreased consumer spending in the US and elsewhere and its own financial sector appears to sit on increasingly thin ice. The Chinese government will have to look around for ways to boost overall exports while manufacturing declines. Therefore I wouldn’t be surprised to see fairly hefty state support for exactly the sort of service exports that India’s been spewing forth in recent years. People have been waiting for a long time for China to go full-throttle on BPO: I think this year will be the year. Whether there’s enough fuel, in the form of demand, for this acceleration remains to be seen.
- Provider market. I’m by no means alone in believing we’ll see a wave of consolidation among providers in 2009. TPI’s Peter Allen believes by the end of next year we’ll see “four to six large, dominant providers”; I’m going for the upper end of that estimate.
- Public sector. It’s a no-brainer, this: consolidation and expansion of shared services in all levels of government in the US, Canada, the UK, Australia and elsewhere in the West, as the public sector looks to greater efficiency to help counter the crippling effects of recession and the huge cost of bailing out the banks. This will also lead to a proliferation of megadeals between state players and major providers; expect the fireworks to come when governments attempt to keep outsourced jobs in-country.
- The “list” debate to resurface. To finish, one purely for the community this: 2008 saw a big debate in various fora about the efficacy (and in some cases legitimacy) of the various lists and rankings of providers and advisors given by certain organisations – naming no names – throughout the year. This will come back with renewed vigour in 2009 since the questions haven’t been answered to any degree of satisfaction. I’m also going to predict at least one lawsuit as a result of the resumption of this debate…
So there we go. No doubt I’ll be proved catastrophically wrong. I’ve already gone wrong simply by virtue of writing this blog: I said in my most recent post that I’d be issuing these predictions in my last blog of this year: however, I’m going to be back tomorrow before I skip merrily off on vacation with a quick look back at 2008 in SSON. Reliable eh?
Until then: have you ever encountered anything better/worse than this?
Jamie
Tags: 2009, BPO, china, currency, lists, market, Offshoring, Outsourcing, PhilFersht, predictions, provider, Shared Services, sharedservices, sourcing, SSON
