Datamonitor assesses retail outsourcing
A new report, Retailing in a Recession: The Opportunities for Outsourcing, looks at which business processes retailers are outsourcing and why.
Falling sales, rising costs and financial pressures mean some retailers are battling to keep afloat. Outsourcing offers cost reduction to certain core processes.
The primary concerns the outsourcing industry faces are language
barriers, domestic unrest caused by offshoring jobs and a dearth of
retail expertise. The report finds one of the biggest hurdles to retail industry outsourcing is capital expenditure (capex) and that retailers are more open to outsourcers who offer flexible payment structures, such as monthly payments or short-term contracts.
Understood not to be a silver bullet, retailers nevertheless expect outsourcers to understand not only the retail industry, but also the specific challenges of their retail sector.
“The recession is pushing retailers to consider outsourcing in order to achieve cost saving and enhanced operational efficiencies. But competition in the services space is strong. Retailers are looking for more than just a supplier; they need a partner. A service provider that takes strides to understand the pulse of the organisation will win over,” Christine Bardwell, Datamonitor retail technology and report author, explained.
The report also finds, although IBM is the top outsourcing partner (for infrastructure technology and business processes), with 14% market share, competition is heating up.