KPMG recently released the results of its global 1Q12 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 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. This quarter’s Pulse analyzed general market GBS market activity and trends, reviewed how current economic conditions are impacting GBS efforts, and looked at the increasingly important role cloud plays in GBS efforts.

Results from this edition of the Pulse find that buyers are continuing to diversify their GBS portfolios with an increased emphasis on the use of domestic and offshore captive shared services.

• Sixty-seven percent of KPMG professionals (see first figure), down 4 percent from last quarter, cited improve current shared services and outsourcing governance processes and capabilities as the most common approach undertaken to improve service delivery capabilities. This has been the top rated response for several quarters, and reflects market awareness of the importance of sourcing governance to GBS success. It highlights a maturing GBS market in which buyers are focused intently on improving operational capabilities for GBS efforts already deployed in the field.
• The second most commonly cited approach was internal process improvement or re-engineering efforts, identified by 47 percent of advisors, down 9 percent quarter over quarter. Ranking a close third and selected by 46 percent of advisors was use/expansion of shared services with use/expansion of ITO slipped to fourth.

KPMG firms’ professionals were also polled on the expected change in buyer organization usage and demand levels over the coming one to two quarters across four different categories of business and IT services delivery models employed in service delivery improvement efforts. These categories are BPO, ITO, shared services, and internal process improvement efforts. Looking forward the greatest expected growth is for shared services efforts (see second figure), identified by 60 percent of advisors, followed by internal process improvement, identified by 54 percent of advisors, up 3 percent from last quarter. Expectations for increased usage of ITO rose from 37 to 40 percent, while BPO demand growth expectations rose from 35 to 37 percent of advisors polled.

Outsourcing remains a core GBS portfolio component but the use of shared services is growing relatively faster than traditional outsourcing. In some cases, buyer organizations are pulling back work previously outsourced and placing it into shared services centers. More often though, expansion of shared services represents an ongoing consolidation of operations previously internally managed and distributed across the organization.  Outsourcing usage is increasing, however, in more strategic and niche areas unique to specific industries and sectors. Often these deals are smaller but the strategic value they can bring to a buyer is significant and well beyond just saving money.

For more from KPMG on this topic, visit the KPMG Shared Services and Outsourcing Institute.

KPMG released the results of the 2012 edition of the global Legal Pulse survey via a webcast on March 27. This was the third annual edition of the legal Pulse, one of the family of recurring Pulse research studies.  These Pulse surveys provide insights into trends and projections in end-user organizations’ usage of global business services (GBS) with the legal Pulse focusing specifically on outsourcing. The learnings are gleaned from third party counsel at some of the world’s top law firms that support buyer outsourcing efforts.  

One topic on which KPMG polled third party counsel was in the trends and drivers of outsourcing contract complexity. In this year’s study, 41 percent of the counsel surveyed indicated that complexity in contracting for outsourced services has been increasing over the past year (see first figure). This level is up slightly year over year with the greatest increase occurring in the European market (see second figure). One potential reason for this higher level is the challenges associated with contracting a longer term outsourcing effort in a region with a volatile and uncertain economic environment.

One might speculate that as the outsourcing market matures and buyers and their in-house and outside counsel become more experienced in contracting, that the level of complexity would diminish. This is clearly not the case. The results illustrate that the nature and type of outsourcing efforts undertaken by clients are becoming more complex from a variety of perspectives, and that the contracting for outsourced services is not getting simpler because of trends such as greater standardization or more use of cloud services. So while individual deals in some cases may become more straightforward, a client’s growing portfolio of outsourcing efforts is not.

The increase in contract complexity is not surprising given the general increase in complexity of outsourcing deals pursued by buyers in the market today. Increased complexity is driven by a variety of factors including more complex outsourcing terms and conditions, more multi-sourcing, and more use of global service delivery models. Greater complexity does not necessarily have a bad or negative connotation, assuming buyers and their service providers can adequately account for it in outsourcing contracts, service levels, and operating and governance models and processes.

To access findings from other recent KPMG market trend surveys, please view our whitepapers on the KPMG Shared Services and Outsourcing Institute.

Buyers of outsourced enterprise services–especially those with big hearts who want to do the right things for the right reasons–often ask us if financially incentivizing their service provider when it exceeds SLAs helps foster the partnership. In most cases, I recommend against it. Why?

• SLAs are established to meet the buyer’s needs at a mutually agreed price
• The provider has a contractual obligation to deliver the agreed upon level of service at that price
• Some providers may leverage the gesture as an opportunity to drive incremental revenue
• Doing so can quickly erode a client’s business case
• Exceeding SLAs doesn’t necessarily equate to more value to the client

 Consider the following examples:

If the Average Speed to Answer SLA is 30 seconds and the provider delivers at 20 seconds, the solution may be overstaffed instead of structured to the client’s requirements, thereby unnecessarily increasing the client’s cost, rather than reducing it or generating greater revenue, two hallmarks of additional value.  

If invoice processing payment terms are Net 30 and the processing service level is within 10business days following receipt, ample time is provided for the customer to  meet its terms. Over-achieving the SLA will not create greater value and, without appropriate payment processing controls, might lead to early payment and a negative financial impact on the client.  

Of course, there are exceptions. For example, if an exceeded SLA has a direct bearing on the client’s revenue or profitability, it might want to entertain financially incentivizing its provider if there is an objective way to measure the impact on a basis that directly correlates with the provided services. For example, if an SLA is for Sales Conversion Rates, and the target is 80 percent, each percent over the agreed upon SLA carries a revenue impact and the provider can make a case for a share of that impact. However, the incentive should never be more than the potential net marginal value for increase.   

The mechanics and structure of incentive payments in such a case should be as simple and objective as possible and within parameters appropriate to the particular situation. Similarly, if gain sharing is specifically included in the contract, the assignment or value of gains should be explicitly defined.

There are limited instances in which a client might–and perhaps should–entertain service level incentives.  However, service levels should align contractual expectations to business value (or close surrogates). When a client considers performance incentives, it must take care to model the financial impact and structure the mechanism to ensure quantifiable value. 

For more information on this and other related sourcing topics, please visit the KPMG Shared Services and Outsourcing Institute at: http://www.kpmginstitutes.com/topics/shared-services-and-outsourcing.aspx

Optimism was clearly apparent at the GRC (Governance, Risk and Compliance) 2012 Conference (also covering HR and Finance Transformation) held in Las Vegas, March 13-16. After several years of slower growth, attendees showed renewed interest in engaging on projects. An increase in attendance was evident. In prior years, approximately one-quarter of the attendees have been interested in buying services, whereas this year it seemed three-quarters had active projects.

In 2010 and 2011, we witnessed slower decision-making and spending. At this year’s conference, clients told us they are moving forward with a variety of new projects, including Business Planning and Consolidation (BPC), GRC, finance transformations, and others. In what seems like an unleashing of pent-up demand, buyers seem more empowered to spend on necessary products and upgrades. In fact, clients who once struggled to demonstrate ROI to secure budget dollars are taking a more tactical ‘let’s get started’ approach today.

We observed four key areas of interest among attendees: BPC, Big Data, GRC, and Mobility:

Business Planning and Consolidation

The significant interest and uptick in implementations around BPC appears to stem from a desire for companies to dig deeper in the planning and budgeting forecasting process to achieve greater efficiency. It’s like a “perfect storm” right now: New releases of BPC software spur increased interest in the new versions and their capabilities, just at a time when budget dollars are freeing up and notably solving one of an organization’s biggest challenges.  As noted in a recent CFO Publishing and KPMG International study, the number one barrier to improving the finance function is due to IT systems that are out of date, inflexible, and unable to support requirements.  Additionally, a recent IBM CFO study cited that 74 percent of the respondents cited a need for faster decision making, a real outcome when focused on improving business planning tools.

Big Data

We observed companies clearly wrestling with issues around data, such as governance, definition, ownership, sustainability, and data prioritization. It was apparent from our audience interaction and our panel discussion that this issue cannot easily be solved. A recent KPMG International study noted that 94 percent of global executives tell us that complexity is their greatest challenge^[1] — and information management ranks as one of the top two reasons why. Ironically, however, information management is also the most popular way to manage complexity, cited by 84 percent of executives in our research.  Further research indicates that companies investing heavily in advanced analytical capabilities outperform the S&P 500 by 64 percent on average, research shows.^[2] Attendees tend to support our view that smart companies with a good enablement strategy can convert the problems of Big Data into Big Knowledge. 

Governance Risk and Compliance

With the rollout of new GRC modules, many companies seek investments to improve user access automation and efficiency around their process controls. Companies with budget dollars are now talking tactics and how to use GRC most effectively to improve their business processes.

In recent years, GRC has grown more important. Five years ago, companies needed GRC for compliance purposes only; now, companies are seeking greater ROI. Today, it’s really a business issue. New thinking centers on increased functionality and robust capabilities. Business considerations drive demand for more integrated GRC-type platforms with more effective sequencing, scale, and scope. As the complexity of GRC systems increases, it is more important than ever to focus on business issues and processes before proceeding to implementation.

Mobility

Businesses are placing demand on IT organizations to quickly implement mobile applications. As noted in a Information Week 2012 Global CIO Survey, February 2012, the number one factor impeding IT’s ability to support the business is their inability to implement fast enough to meet their goals.  Mobility is clearly placing stress on IT organizations, as we observed several companies inquiring about getting up to speed on mobility to share data across multiple tools and platforms, and access them from a variety of mobile devices. Business users understandably are excited by the prospects of mobility and are hungry for new global applications that are simple, user friendly, and readily available.

Accessing data real-time, in-memory applications anywhere has significant business appeal: You get what you need, at any volume, when you need it, and without being tied to traditional computer technologies–enticing prospects to be sure. However, such increasing business demands add more stress to IT organizations and strains their ability to deliver. 

^[1] KPMG, Confronting Complexity: Research Findings and Insights, May 2011.

^[2] An interview with Thomas H. Davenport and Jeanne Harris, “Analytics and the Bottom Line: How Organizations Build Success,” Harvard Business Review, Sept. 23, 2010.

For more from KPMG on this topic, visit the KPMG Shared Services and Outsourcing Institute.

In the face of increasing regulatory scrutiny, decreasing margins, and the need for better controls, today’s insurance companies are seeking ways to gain operational improvements and realize cost savings to bolster their bottom lines.

Following are three KPMG recommendations to help insurers achieve these goals:

 Rebalance contractor/employee headcount ratios and responsibilities                                                              

Driven by perceived temporary workload increases and a hesitance to make permanent role commitments to in-house staff, many insurance companies over time fall prey to an out-of-sync balance of employees to contractors. In fact, we’ve seen organizations in which there is a two-to-one ratio of contractors to employees. While at first blush this may appear to be a solid staffing strategy, it can in fact be detrimental, resulting in undefined roles between in-house and contract staff, poor project management practices, lack of accountability for deliverables, unexpected costs, and loss of “tribal” applications and business knowledge when contractors move on to engagements with other organizations.

To correct this imbalance and mitigate these issues, insurance companies should:

• Attain the right contractor to employee staffing levels
• Define the roles whereby employees are the business line experts, architects of necessary solutions, and experts in strategic technologies. Contractors would then be responsible for outcome-based delivery including documenting requirements, handling applications testing and maintenance, and delivering efficient process-driven activities.
• Develop employee skills. In this new, rebalanced model, employees must excel in business knowledge, governance, architecture and key technologies, areas likely out of their current realm of experience. However, ad hoc, on-the-job-training is not sufficient. To succeed, organizations must institute formal employee development programs while developing specific job roles and expectations for their in-house staff members.

Move from staff augmentation to creative partnership arrangements with key service providers

In a concession to augmenting employee staff with contractors, many insurance companies hire X number of rate card-based bodies with the required type of expertise from a third-party staffing firm, or have their procurement departments bid a business line-written statement of work out to multiple service providers. Unfortunately, both of these approaches are sub-standard. Alternatively, engaging in collaborative creativity with primary existing service providers not only brings more suitable, talented, and qualified personnel into the mix, but also significantly accelerates the staff augmentation process.

KPMG is currently assisting a major insurance and retirement plans provider with such an initiative. We began by helping the company develop a request for information (RFI) for its six largest application development and maintenance (ADM) providers. We then clarified with the client what “partnership” meant to it, and conducted face-to-face meetings with each of the providers to gain full insight into the types of flexible and creative partnership-oriented staffing arrangements they have fashioned with other clients. After the down select, we worked closely with the client and the provider to build a model for partnership and delivery that allows for high-level, rapid definition of the types of work and projects requiring staffing, thereby enabling the right resources to be brought to bear at the right time. Key to the model is an available staffing pool approximately 30 percent of whom have the core, required special expertise in specific technologies or lines of business within the client company to serve as full-time contract staff. The other 70 percent will be utilized as flex resources during times of increased demand. This model reduces administration and costs, speeds right resource deployment, and places delivery accountability in the lap of the service provider.

Consider outsourcing select core processes

Many, if not most, P&C and life insurance companies have already outsourced a wide range of back-office processes in human resources (HR), finance and accounting (F&A), procurement and real estate and facilities management (REFM) functions. But an increasing number are starting to investigate how outsourcing core processes such as claims administration, policy origination, reinstatement, and closed book of business can help them achieve their end-state objectives, particularly in the cost savings arena. In doing so, one early adopter has experienced a 40 percent reduction in claims settlement times; while another has seen a 30 percent increase in daily collections.

While none of these tips are easy to implement, they are critical to achieving success in today’s highly scrutinized, yet profitability challenged insurance landscape.

For more from KPMG, visit the KPMG Shared Services and Outsourcing Institute.

KPMG recently conducted a global poll of its firms’ professionals to assess what they view as the top market trends that will impact their clients in 2012. This poll canvassed professionals from the firms’ Management Consulting, Risk Consulting, Audit, and Tax service groups. KPMG discussed some of these results in a webcast and whitepaper released January 26, and in three previous blogs that examined the top trends,  top initiatives and top challenges to these initiatives identified for 2012. 

The top three challenges identified to successfully undertaking key 2012 initiatives were:

1)      Dysfunctional and/or fragmented organizational operating models, designs, and processes

2)      Inadequate and/or antiquated information technology (IT) infrastructure and systems

3)      Lack of adequate and skilled talent, and the inability to attract and retain talent

The figure below identifies the perceived top capabilities organizations will need to successfully undertake top 2012 initiatives and overcome the above-cited challenges. It illustrates the total responses from the poll, and provides a break out of responses from KPMG professionals addressing client activities in each of the three major global geographic regions, as well as those supporting clients globally.

The top capability required to support 2012 initiatives, cited by 50 percent of KPMG professionals globally, was smart and innovative management and management practices. The need for smart and innovative management is not surprising given the top challenge cited was dysfunctional and/or fragmented organizational operating models – thus by association, dysfunctional management. This was the top capability cited across all geographies, though there was much clustering of top selections. Smart and innovative management has always been in short supply, and the smartness bar is continually being raised and competition for smart management increasingly competitive globally, as illustrated by another top capability cited in the ability to find, attract and retain talent globally.

The second most frequently cited capability overall was reporting and analytics to make better business decisions. This is one key enabler to making management smarter and more innovative. Investing more in the core technologies and capabilities for reporting and analytics, however, is the easy part. Much more challenging is figuring out how and with what data to make better decisions and actually become smarter and more innovative. This capability was ranked highest in the Americas and lowest in EMEA, with the latter region more focused, not surprisingly given current market conditions, on factors such as adequate access to capital and funding. 

Many other key capabilities were identified, highlighting the multi-faceted challenges organizations face in achieving their key 2012 business goals. They include, from an operating model standpoint, alternative service delivery models-shared services and outsourcing or global business services, and foundationally things such as IT systems and capabilities beyond just cloud. 

Overall, organizations have a broad range of initiatives on their collective agendas for 2012. They are focused both on their top and bottom lines, as well as on overhauling core business processes, operating models and supporting infrastructures. Buyers face many diverse impediments to successfully undertaking these initiatives, some of which, such as organizational dysfunctionality, lack of talent and an inability to innovate, will prove challenging to overcome without some radical restructuring. Some of these impediments have been exacerbated by ongoing difficult global economic conditions, but in other cases market conditions and the rise of new, often more nimble and innovative global competition, have laid them bare. 

To access findings from other recent KPMG market trend surveys, please view our whitepapers on the KPMG Shared Services and Outsourcing Institute.

Simply put, Global Business Services (GBS) is the use of shared services and outsourcing to support operations globally.  KPMG looks at many clients and models and has amalgamated a scale upon which an organization can understand where they are in their journey to GBS maturity. 

GBS mostly began in finance and accounting (F&A), information technology (IT) and human resources (HR), but now it often includes other processes such as procurement, supply chain, facilities management, call center services and so on–across the globe–delivering services consistently and for a determined cost and level of service.  While some services are tailored regionally or by design, there is a lot to be learned from other firms’ experiences.

On average, the more mature GBS organizations in our research delivered a four percent higher return on equity.

So there’s real payback to investing in and developing a strong GBS strategy.  We know this journey doesn’t exist in a vacuum.  Some companies focus on a function and build out geographically.  Others focus on regions, and then migrate.  Some stumble.  Some never get from a pure functional view to an end-to-end process view. 

Some have derived great benefit from implementing GBS in North America and Europe, but have made little headway in other parts of the world.  In most cases, the journey zig zags where an enterprise may be three years ahead in finance, and they’re just now beginning HR, or vice versa.

It’s not uncommon.  Everything can’t be uniformly pushed out, so while some services may reach number 5 on our five-point scale, others may reach a 2.  But that’s okay.  GBS is all about the journey–not just for clients, but for us as well.   We are continuously learning how the best are evolving and building that knowledge into our thinking and practice.

It’s this research and our ability to bring it to clients that keeps delivering value. If you are interested in learning more about GBS and the KPMG GBS scale, we invite you to visit the KPMG Shared Services and Outsourcing Institute and read the research paper Global Business Services Innovation: Optimizing the Business Model for Competitiveness.

KPMG recently conducted a global poll among professionals in its firms’ Management Consulting, Risk Consulting, and Audit and Tax service groups to assess what they view as the top market trends that will impact their clients in 2012. KPMG discussed some of the results from the poll in a whitepaper and webcast released January 26, 2012, and in two previous blogs that examined the top trends and top initiatives identified for 2012.

The top three initiatives identified for 2012 are:

1. driving down operating costs
2. investing in new or improved information technology (IT), such as enterprise systems,
   business intelligence, cloud and social media
3. redesigning or reengineering core business processes.

The figure below depicts what those polled perceive as the biggest challenges organizations will face in successfully undertaking these initiatives. It illustrates the total responses from the poll, and provides a break out of responses from KPMG professionals addressing client activities in each of the three major global geographic regions as well as those supporting clients globally.

The top challenge to 2012 initiatives, cited by over 69 percent of KPMG professionals globally, is dysfunctional and/or fragmented organizational operating models, designs & processes. There was strong consensus on this challenge across all geographies. This is clearly not an easy challenge to overcome, and one that organizations have spent years inadvertently constructing. It is one often more glaring during difficult economic times, when it is harder to ignore, than when market conditions are good and business is growing. One key means to address this challenge, which is gaining momentum in the market, is ongoing and often fundamental overhauling of organizational and operating models via greater adoption of a global business services model.

The more tangible second most frequently cited challenge is inadequate and/or antiquated information technology infrastructure and systems. Inadequate IT systems and capabilities are a perennially identified challenge, or scapegoat, to improving organizational efficiency and effectiveness. There are several factors in the current market, however, that are feeding on many organizations’ sense of IT inadequacy, including the growing real or imagined  importance of adopting cloud computing, the growth of social media, and the consumerization of IT. This challenge aligns with the second most frequently cited top initiative in this poll, which was invest in new and improved IT such as enterprise software systems, business intelligence, cloud and social media.

 The next most frequently cited challenge overall is lack of adequate and skilled talent and the inability to attract and retain talent. Talent was a key theme prioritized throughout this research. It is telling that despite ongoing high unemployment levels in most Western markets, talent shortage is identified as a key barrier to change efforts. This highlights that in many markets the problem is a mismatch between available and required skills in the market, not a lack of demand for qualified labor. 

There are some response level variations on top challenges based on geography, especially between the Americas and Europe, Middle East and Africa (EMEA), though overall they are not as great as was found with the top drivers results.

• Collective organizational dysfunction, for example, was scored eleven percent below the average among professionals in EMEA. It is unclear whether European organizations are truly less dysfunctional, or if this is a relatively less important challenge given current uncertain and challenging economic times in the Eurozone. EMEA respondents did cite the collective challenges of lack of access to capital, poor liquidity and inadequate funds to invest eleven percent above the norm, which highlights the severity of economic challenges in this market. 
• Restrictive government regulatory policies and hostile business environments was scored 17 percent higher by professionals supporting clients in global initiatives. One interpretation of this higher scoring is the challenge of working across markets with divergent growth, regulatory and business friendliness trajectories. It also reflects the inherent challenges of conducting global operations in an increasingly multi-polar economic and geopolitical world.

 The challenges identified are for the most part not new; nor are there easy fixes for them. This is not dissimilar to the broader economic and political challenges facing the markets in which organizations operate. While quick wins are needed to start the process of overcoming them fully, addressing them is a long-term proposition.

In the past several years, the global outsourcing market for large single-provider deals has flattened. Instead, buyers increasingly are seeking best-of-breed providers for specific services.

Shared services centers, meanwhile, are incorporating more services, more functions, and more third-party resources as they strive to improve productivity and efficiency across functions and processes.

Add it up, and this increase in services and providers makes it all the more critical – and complex – to manage the services portfolio, mitigate risk, and ensure these solutions generate the promised value.

Most organizations invest 5-7% of contract value in the governance function to manage activities that range from ongoing contract management, invoice verification, performance reporting, to service provider site audits, issue tracking and end-of-term strategy – frequently things that internal governance teams often struggle to do well. Among the complaints we’ve heard:

• We know that value is leaking, but we don’t have the bandwidth to measure it or correct it.
• We’re too busy developing spreadsheets and reports to provide solid analysis and strategic decisions.
• Our governance costs are higher than anticipated, and they’re increasing year over year.
• We spend an inordinate amount of time training and retraining resources.

In response, some companies are leveraging outside advisors to provide governance support services. In this notion of “managed governance services,” governance professionals bring the knowledge, people and technology to perform governance activities as an on-demand service – and typically at a lower cost than the investment in internal resources.

Without effective measurement and monitoring, value leakage is a near certainty. In fact, our research shows value loss in a typical shared service or outsourcing operation can range from 17% – 40% of “unrealized potential.”

Clearly, failed service delivery governance has serious ramifications.  For more detailed information on how proper governance can save money, help prevent value leakage, and enable a focus on decision making rather than data-crunching, please see the KPMG paper, Stop the Value Leakage.

And for more on service provider governance and other related topics, please view our library of papers on the KPMG Shared Services and Outsourcing Institute.

KPMG recently conducted a global poll of its firms’ professionals to assess what they view as the top market trends that will impact their clients in 2012.  This poll canvassed professionals from the firms’ Management Consulting, Risk Consulting, Audit, and Tax service groups.  KPMG discussed some of these results in a whitepaper and webcast released January 26 and in my previous blog.

The figure below identifies the top initiatives that organizations will undertake in 2012.  It illustrates the total responses from the poll and also breaks out responses for KPMG professionals speaking to client activities in each of the three major global geographic regions as well as professionals supporting clients globally.

The top initiative cited by over 69 percent KPMG professionals globally was continue to drive down operating costs. This remains a constant theme in the today’s market. The challenge for organizations is how to balance the desire to drive down costs with the needs of the other top initiatives identified, most of which require making investments. This creates potential conflicts in terms of prioritization of investment and initiative agendas.

To this point, the second most popular initiative cited by just over 50 percent of KPMG professionals was invest in new or improved information technology such as enterprise systems, business intelligence, cloud, and social media. The challenge for buyers is how to fund new investments in these areas and maintain adequate operating budget for existing investments while driving down overall operating costs.

There are some significant response-level variations based on geography, especially between the Americas and Europe, Middle East and Africa (EMEA).

• Driving down operating costs, for example, scored highest among professionals in EMEA, while invest in new and innovative IT solutions scored the lowest in that region.  This is a reflection of the current uncertain and challenging economic times in the Eurozone.
• Professionals in the Americas scored invest in new IT the highest, and were likely to identify redesign or reengineer core business processes as a top 2012 initiative.  This is an encouraging correlation, as to take full advantage on new IT investments process redesign is often a required parallel requirement.
• Professionals in the Americas scored invest and expand business operations in emerging markets such as China, India, and Brazil the lowest, while those speaking to EMEA and Asia-Pac scored this initiative the highest. One possible reason for this is a greater focus on maximizing opportunities in an improving U.S. economy, but given that professionals in the Americas and all markets ranked invest and expand in local Western markets last, this is likely not the case.  More likely is that other initiatives identified in the Americas are taking higher priority at this point in the business cycle.

Clearly, organizations will face challenges in 2012 balancing the needs and investment requirements of these often competing initiatives.  This is the nature of business, however, especially in a perpetual era of “do more with less.”  Given fragile or failing economic conditions in the West and increased global competition, however, the penalty for failure will prove greater in 2012 and beyond.

To access findings from other recent KPMG market trend surveys, please view our whitepapers on the KPMG Shared Services and Outsourcing Institute.