KPMG's South African Sourcing Pulse survey uncovers trends
within shared services and outsourcing – insights from KPMG
advisors and IT service providers - KPMG
Shared services and outsourcing models are driven by, amongst
others, cost savings as well as the need to improve global delivery
and operating models and support business growth agendas.
Opportunities within the African continent are contributing to the
need to improve delivery models and support growth agendas. These
are some of the insights suggested by KPMG's latest Q3&4
2012 South African Sourcing Pulse Survey.
At KPMG's breakfast event held at the firm's
Johannesburg office on 16 April 2013, experts in business and IT
service sourcing provided keen insights based on the findings of
the latest survey that has captured the changes in demand, usage
levels, future adoption plans and related key market indicators for
2013 across all sectors.
Since its inception in 2004, KPMG's Global Sourcing
Advisory Pulse Survey has yielded insightful analyses of
current and ongoing market trends in the use, deployment and
delivery of business and IT services. However, trends in South
Africa differ when compared with more developed global markets and
for this reason, KPMG releases a South African Sourcing Pulse
Survey on a bi-annual basis.
Insights are gleaned from KPMG firms' advisors who work
closely with end-user organisations that are actively exploring or
undertaking domestic, near and offshore shared services and
outsourcing, and other service delivery initiatives, as well as
leading global business and IT service providers. Speaking at the
breakfast, Fritz Dannhauser, Associate Director, KPMG Shared
Services and Outsourcing Advisory, noted that the main driver for
organisations for improving their global business services support
is reducing operational cost.
"Organisations are however not pursuing this goal
unilaterally. Rather, reducing costs has become a base-level
prerequisite for improvement or expansion efforts," says
"The top approaches South African organisations are
employing to improve service delivery performance and help to
reduce costs are internal process improvement and the use and
expansion of shared services. The use and expansion of BPOs and
ITOs is not as popular yet, but we believe that, as the market
develops, their popularity could pick up – a trend we will
monitor closely," adds Dannhauser.
The survey highlights that the key success factors for shared
services within SA are running it as a business and delivering
"This finding is consistent with what we see in the
market," notes Alida Taylor, Director, KPMG Shared Services
and Outsourcing Advisory.
Vandana Ramani, Associate Director, KPMG Shared Services and
Outsourcing Advisory, adds, "A key point of failure for shared
services, as highlighted in the survey, is being competitive with
third-party service providers. Building a capability internally and
being as competitive as a service provider is
Taylor concurs, "Service providers have programmes to
develop skills, especially global players who have the platform to
upscale, a capability that could potentially be leveraged to create
new or alternative job opportunities for company
78 percent of South African service providers indicate that
market pricing pressure is increasing. 89 percent of providers,
however, expect to be able to increase the scope of work they are
delivering on existing contracts.
Respondents indicated that the key capability critical for
success for 2013 initiatives is smart, innovative management
‒ a trend consistent with KPMG's global pulse survey.
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