Sourcing in 2018
The Global Sourcing Association
The Home of the Global Sourcing Standard
GSA Sourcing Predictions 2018

2018 looks to be the most exciting year for the GSA!. The positive contributions of the sourcing profession to industrial and economic growth and to shareholder value are becoming increasingly obvious to business and political leaders alike, and what happens in this sector over the next twelve months will have long-term repercussions both for those within the sector and to the broader global business community.

As we look towards the New Year, GSA has published their Sourcing Predictions for 2018 and set out their vision for the strategic sourcing industry. These are available below and highlight what key changes to expect in 2018 and what you should be aware of in your organisation.

AI

For several years now it's been the archetypal no-brainer, when compiling a list of predictions, to wave airily in the general direction of artificial intelligence and state confidently that "AI will change everything"; what's been (understandably) much less straightforward is putting any kind of firm timeline to what's coming. Will 2018 be the year that "everything changes"? No - this is, of course, a more evolutionary process than that implies - but we will see an acceleration in terms of the number, scope and scale of AI-focussed and -related deals being done globally; moreover we'll see an increased willingness on the part of companies and public sector bodies to engage with some of the looming commercial and social challenges being thrown up by these new technologies. 

The middle management question

Across the world, outsourcing faces a significant problem in the form of a pronounced shortfall in middle-management talent. Not enough professionals are rising through the ranks, and not enough experienced talent is available on the market to make up for that development gap. The industry has been aware of this challenge for a long while but has allowed itself to kick an increasingly rusty, tetanus-laden can down the road rather than taking the steps necessary to address it; in 2018 the issue will reach a critical point, at which it will become problematic for some providers to take on substantial levels of new business because of a fear over the prospects of delivery failure brought on by this mid-level staff shortage - with this situation, clearly anathema to senior management and shareholders alike, forcing significant change (and, dare it be said, investment?) on the part of some key industry players. 

New challenges, new opportunities

A cursory glance at the news on any given day this year would be enough to paint a pretty gloomy picture of the world at large - but in challenges often lie the best opportunities, and the outsourcing industry has an excellent chance in 2018 to help organisations large and small through the infernal labyrinths of Brexit, growing US isolationism (especially, anti-NAFTAism), shifting policies on the part of the key central banks, and many more. Providers demonstrating the requisite combination of understanding, flexibility and the ability and will to think beyond the immediate bottom line can and must seize the moment in terms of establishing themselves as invaluable strategic partners in the face of difficulties which often appear to defy rational analysis: put simply, companies now more than ever need to be ready for anything, and the outsourcing model can be a very useful tool in the quest for that readiness. 

A rapidly changing ecosystem...

The outsourcing landscape is shifting - and 2018 will see the pace of change quicken. For example, one prominent dynamic in recent years has been the rapid emergence of start-ups (often based around one core product) which have been able to make good headway thanks to a high degree of flexibility and agility - before being snapped up by one or other of the industry behemoths, usually entirely deficient in those qualities but in possession of very significant investment war chests. This will continue apace in the coming year - while those long-established leviathans which can't keep themselves current through acquisitions as well as in-house tech will be in danger of stagnating more quickly than ever. 

...And changing roles

There is also increasingly rapid change globally in terms of what are the key roles on which the outsourcing industry is founded. For one thing, a confluence of factors (prominently, an increase in in-house capability and experience) has led many to question the long-term viability of the advisory market. While this seems premature if not fully pessimistic, it certainly appears as though certain advisory niches (for example, location experts) might not be long for this world - expect to see some traditional advisory revenue streams being dammed up in 2018, along with continued consolidation in the broader market. 

Greater focus on adding value

It's an inconvenient truth that at a time of huge disruption for many traditional businesses, the outsourcing deals which should be helping them across to the digital promised land are instead dragging them down to oblivion because of fundamental errors in their design and a lack of will (and, perhaps, long-term vision) on the part of their providers. The next twelve months will (and must) see a recalibration of a good number of agreements and the relationships behind them, as buyers increasingly recognise that many extant deals may be succeeding in their immediate aims (with dashboards a reassuring shade of green) but are hampering (potentially fatally) organisations' chances of making a success of their analogue/digital transitions. This move will in the main be led by buy-side professionals - but providers could endear themselves (further...) to their clients by initiating those discussions before they're forced upon them. 

ENDS

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