This time last year I wrote in these pages about the year ahead for outsourcing. The key trend I focused on was an increase in partnership with clients and suppliers getting much closer—and that seems to have taken place throughout 2017. One major driver for this has been the change in how consumers become aware of a product and then convert into customers...what marketing professionals call the ‘customer journey.’ Think for a moment about the classic customer journey. A potential customer would see some advertising or some type of marketing campaign, search for additional information, compare products, eventually make a purchase and possibly follow up with a call or email to the customer service team if they have a problem.
Now this experience is much more complex—the way that customers learn about products and access information has completely changed. A consumer might learn about your products by seeing information on a social network, reading a review site, viewing an online recommendation by a previous customer, receiving an email or any number of other ways. This has also dramatically changed the way that customers purchase products too, with many brands offering online or in-app purchase options.
This dramatic change in consumer behavior has affected outsourcing relationships because it has quickly changed many aspects of business, including how:
- Brands need to promote their products
- Brands need to offer an omni-channel experience, so customers can locate information and make purchases in many different ways on different channels
- All these dramatic supply chain changes affect CRM systems, ERP, stock control and how internal corporate departments like customer service and marketing can function
The rapidly changing nature of how companies are structured has led to a need for deep expertise. Brands that are trying to blend their marketing and customer service function have found that it’s a much easier proposition to do this with a partner that has very deep knowledge of how an omni-channel sales, marketing and service environment can work. This leads to a much closer sense of partnership between the client brand and the suppliers delivering IT, customer service or marketing services. These suppliers have started behaving much more like partners because that’s truly what they are in this modern environment.
I think this trend will continue. We are still in the early days of truly exploiting an omni-channel business environment and most companies are still figuring out the implications for their IT systems, public messaging and customer service processes.
When I think forward to 2018, my natural first step is to see what the suppliers and bloggers are saying, but to be frank, I was a little disappointed in my most recent scan of the 2018 outsourcing trend articles. I identified three trends that are predicted frequently:
- A renewed skills shortage driving more outsourcing
- Suppliers focusing more on specific expertise rather than offering an all-around service
- The price vs. quality debate strongly supporting quality as more important than price
I believe these trends could have been published in any end of year prediction list for the past decade so it’s a surprise to see many business journals just focusing on the same old topics. I believe that in addition to the continuation of the partnership trend I predicted last year, there will be a couple of strong trends—especially in Europe.
1. GDPR: The EU General Data Protection Regulation (GDPR) will be enforced beginning May 25, 2018. This completely changes how companies across Europe can store and work with data. It is the biggest shake-up in how companies can use data since the 1990s and essentially puts power in the hands of the customer. If you cannot tell your customer in clear and simple terms why you want to capture and use their data then you are no longer allowed to capture it - and fines in the millions will hit those who ignore the new rules. Many companies that are scared of the legislation will turn to their partners for assurance that their systems are compliant.
2. Data Analysis and Security: Yet even with the GDPR rules and compliance, there will be a renewed focus on capturing more data on customers, analysing it in much more detail, and creating personal experiences or generating business decisions from this information. This leads to a need for increased security, which, from the perspective of data capture, is covered by a new GDPR-compliant approach. But it more generally needs an entirely new approach to security because this information will sit at the heart of your future business. Once again, this is such a dramatic change in practice and procedures that many will focus on working with trusted partners to get this right.
To some extent, these trends are self-reinforcing. There is a great desire for companies to understand their customers better, which requires more data, more insight and better data analysis. However, this also requires GDPR compliance, and by working with expert suppliers in a close partnership all these business benefits can be safely delivered.
I believe that 2018 will be an exciting year for those in the outsourcing community. Partnerships will be deeper and the expertise that the supplier community has in data analysis, and the management and security of data will be sought out more than ever before.