Global Research Director, KPMG LLP
KPMG LLP (KPMG) recently released the results of its quarterly, global 1Q15 Sourcing Advisory Pulse surveys. These Pulse surveys provide insights into trends and projections in end-user organizations’ usage of global business services (GBS). The learnings are gleaned from KPMG member firms’ advisors, who are working closely with end-user organizations that are actively exploring or undertaking GBS initiatives, as well as from leading global business and IT service providers.
The first quarter edition of the Sourcing Advisory Pulse examined top trends and predictions for 2015 and beyond, including the following.
- Top positive and negative market trends
- Top initiatives and challenges to successfully undertaking these initiatives
- Top capabilities required to successfully undertake these initiatives.
Attracting, retaining, and managing skilled talent is the number one concern facing organizations globally (see Figure 1). This was also cited as the top negative trend in the last two years’ Pulse surveys. This is evidenced in that organizations are being forced to wage a new, ongoing, and fierce “War for Talent,” despite high unemployment rates in many markets. Clearly skills available are not the skills organizations need. And while organizations continue to place significant emphasis on attracting external talent, many are failing to adequately analyze and remediate their current capabilities to develop and retain existing talent within their organizations. One key dimension to this is better utilization of techniques such as workforce analytics to identify and assess talent. Lacking adequate analytical skills, many organizations are unable to determine if untapped talent exists internally, resulting in efforts being focused on the more costly acquisition of external talent. Following closely on the heels of talent challenges, the Pulse survey identified political and government gridlock as another top negative trend. The trend ranked high across nearly all markets and geographies. The gridlock contributed to renewed concerns over weakening regional and global economies. A key issue here in many markets is to what degree is this situation situational or systemic.
On the positive side of things, maturation of and greater access to innovative technologies such as automation, cloud, mobile, and analytics was a top positive trend cited (see Figure 2). This was also the top positive trend cited the last two years. A somewhat distant second and third were expanding emerging market opportunities for selling goods and services and improving or rebounding global economic conditions. This represents a bipolar view of economic conditions as well as variations of findings across geographies and countries as well as industries and sectors. In general, KPMG advisors that operate globally and support global organizations were more optimistic on economic conditions, and those operating in Europe the most pessimistic. This highlights that despite slowing, globalization is still moving forward to the benefit of global organizations.
Looking forward, organizations need to address each of the following points to capitalize on positive trends and limit the impact of negative ones.
- The War for Talent – This is a battle that will be long in duration and with its winners and losers. It is important for organizations to understand their current capabilities and develop aggressive and strategic plans to both train and attract key talent. Organizations should also explore emerging technology areas such as robotics process automation (RPA) as a means to address talent shortages. RPA can further reduce the need for human talent to perform certain activities, partially alleviating talent shortages and reducing costs. This will enable organizations to reposition talent for the more value-driven activities.
- The Adoption of Innovative Technologies – While this will require substantial investment, the ability to truly bring an organization’s technology platforms into the 21st century can play a vital role in helping attract talent and can pay significant dividends over the long term.
- Big Data and IT – Successful execution around big data and IT will represent perhaps one of the most important strategic advantages in the coming years. This is about more than simply understanding internal benchmarks and identifying customers. With proper implementation, big data and IT can provide an organization with strategies to respond to both internal and external challenges.
- First-Mover Advantage – As with many other business endeavors, the first movers often are the ones that reap the greatest benefits from new business techniques, such as to better execute talent management, or innovative technologies, such as next generation data and analytics. Many organizations are still waiting on the sidelines to see what changes their competitors will make. Now is the time to assess and overhaul operating models. With the current pace of technology and volatile market conditions, adopting a wait-and-see approach could be disastrous to an organization’s ability to compete over the long term.