Outsourcing, offshoring and managed services

In the world of offshoring and outsourcing a number of flexible and blended managed service models are emerging.

A steady rise in 'outsourcing' in its many guises

Once a year, Business Information Review (BIR) publishes an annual survey of business information services and sources in the UK.  For the last six years, respondents have been asked whether their organisation has outsourced or offshored any information services - or if it has any plans to do so in the immediate future.   The surveys have shown a steady rise in the outsourcing and offshoring of information services, in particular with banks, other financial service companies and law firms.  Firms making these changes are not exclusively driven by attempts to reduce overheads or head count but by a combination of drivers, including a desire to focus on the organisation's core business activities.

Blended approaches surfacing

In 2011, some 20% of the respondents to the BIR survey reported their organisations had a significant outsourced/ offshored information services operation.  A common theme is the offshoring of 'lower level' information processes while higher impact information services remain 'onshore'.  This blended sourcing strategy seeks to play to the strengths of the various teams. 

Collaborative partnerships

However, the Survey makes clear that many organisations are adopting a flexible approach, particularly as wage inflation in such countries as India and China means that the expected cost savings might not be achieved.  Whichever model is chosen, as Elaine Egan (writing on Westlaw's enewsletter) states, the success of an outsourced or offshored team depends on how it is managed by team and unit leaders.  These teams need to be managed strategically and collaboratively.  Egan goes on to share insights from law librarians who have embedded new business models in partnership with integrated resource providers, such as Integreon.

According to Robert Corrao, the COO of the LAC Group (another leading firm providing project, information and staffing management services in this field), the demand for a number of alternative managed services is growing.  This includes the call for help in managing the costs of running information services (including the benchmarking of spending and renegotiating information provider contracts); helping the information service provide support to help the organisation increase revenue; and consultancy projects that can help raise the profile of information services within the organisation. 

Valuing information and knowledge

For most organisations, managing information is not a core business activity whereas as managed services provider may have a deep understanding of, and experience in, running libraries and research services.    Whereas a research function may be undervalued while it remains in-house, its perceived value may be better appreciated if it is taken outside of the organisation.  Corrao also emphasises that 'managed services' does not necessarily mean cutting staff or benefits.  Jean O'Grady, quoted by Egan, writes of new working models as 'liberating knowledge professionals' from low level administrative duties, enabling them to focus on higher end client work and thus 'correcting inefficient work flow'.

As organisations continue to focus on both cost saving and revenue generation, it seems likely that more of them will consider new models for non-core business activities.

Image courtesy of marfis75 via Flickr.