Our 2024 survey examining the changing landscape of multidimensional sourcing revealed two new trends, while other findings were reinforced. Access to talent has become the number one driver influencing outsourcing decisions. Organizations are using multiple paths to secure capabilities, services, and skills. These paths include insourcing, outsourcing, global internal centers (GICs), digital workforce, and most recently, AI outsourcing—all of which are often disjointed. This complexity requires an orchestrated approach to sourcing: We are in the era of multidimensional sourcing. The digital workforce, comprised of artificial intelligence (AI)-enabled employees and automated robots, has become a distinct talent model: 20% of surveyed organizations have developed a “digital workforce” strategy to manage these digital employees. In addition, the integration of digital workforces in outsourced services, known as AI outsourcing, is a key area of focus. 83% of executives surveyed expect third-party vendors to include AI capabilities as part of their service offerings. Despite high expectations for AI outsourcing, actual benefits remain limited: Less than half of organizations report increased productivity, and only 25% see a reduction in vendor service costs. Insourcing and GICs are surging as organizations rebalance their talent ecosystems While insourcing and GIC are not new, they have re-emerged and accelerated over the past two years as strategies widely used by organizations to rebalance their talent ecosystems and enhance service delivery. 70% of the organizations surveyed have selectively insourced some of their previously outsourced work in the past five years, primarily to strengthen internal capabilities, improve service quality, regain control, and eliminate vendor markups. Outsourcing delivery models continue to mature, with an increasing emphasis on value-based relationships Despite the increase in insourcing, 40% of respondents expect investments in third-party outsourcing to increase, with only 20% planning a decrease. The rate of outsourcing back-office functions remains high, but as outsourcing relationships mature, organizations are placing greater emphasis on extracting value from front-office and core capabilities. Half of respondents use outsourcing services for sales, marketing, and R&D capabilities. Outcome-based delivery models have been increasingly adopted, with executives reporting positive satisfaction responses and plans to increase investments. According to the survey, 67% of executives now use outcome-based services, continuing the trend away from traditional staff augmentation to an outcomes-driven approach. Mastering the complexities of talent acquisition is essential for future-proof organizations Some of the biggest challenges organizations face in talent sourcing include tracking value realization, managing organizational change, and integrating services—all of which are related to the maturity of their internal governance and management capabilities.
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