A&M Survey: Service Providers Flexible in Creating New Structures, Including Build, Operate, Transfer
Alvarez & Marsal conducted a survey of leading outsourcing vendors in the summer of 2024 to ascertain new approaches to respond to an evolving marketplace. Customers in the marketplace, broadly, are continuing to look for higher quality, greater breadth of service, more flexibility and lower cost, enabled by new technology, and especially artificial intelligence. Fulfilling this desire requires the major transformation of processes and delivery models, necessitating significant new investment on an ongoing basis as best-in-class practices are adopted.
Positive Business Outcomes
We inquired about how the usage of artificial intelligence in delivery models could translate into efficiency gains, with a specific focus on business outcomes.[1] The chart below shows that positive business outcomes have been achieved through more effective solutions, with greater efficiency and increased accuracy. In particular, automation is delivering lower costs, faster service delivery (e.g., processing requests or customer orders in seconds) and greater precision.
Moreover, this transition is a key enabler of a transition from the typical, input based pricing model, with hours at a rate per hour, toward pricing based on measurable outputs and, even more, on outcomes. It is fair to say that such a move has been desired by customers for several years, but it has been inhibited by difficulty in measuring units of production and, even more so, measurable outcomes. Computer algorithms have had a major impact and have enabled a breakthrough in approaches to pricing.
How Alvarez & Marsal Can Help
Our findings reveal that automation and artificial intelligence enable businesses to transform their models, adopt output- and outcome-based pricing, enhance quality and reduce costs. Alvarez & Marsal specializes in designing innovative outsourcing solutions including build-operate-transfer models to help organizations establish global capability centers and achieve sustainable success.
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[1] A&M conducted interviews of 15 outsourcing vendors, employing open-ended questions and discussion points to facilitate dialogue on market trends.
