By 2022, the outsourced business services market in the United States is projected to reach $148.3 billion.
Having the right leadership in place is pivotal to success.
It is no secret that outsourcing businesses have been undergoing fundamental changes driven by the influence of technology. From collections and billing to call center operations, advancements such as robotic process automation, artificial intelligence and broader adoption of cloud-based software have created both opportunities and pressures for traditional business process outsourcing companies.
As service businesses are integrating technology into their solutions at an ever-increasing rate, with some transitioning to product-driven organizations altogether, having the right leadership in place is pivotal.
But executives who have grown up in outsourced business services may not possess the requisite exposure to the technology and business models that will define the future of the sector.
While there are certainly leaders within the sector well-equipped to navigate the changes, companies willing to consider outsiders for leadership roles can position themselves to win both short- and long-term.
In all businesses, direct industry experience is typically sought in leaders. But when an industry is undergoing change, traditional industry experience can be less relevant.
PROMOTED FROM WITHIN
To understand the executives who are leading the outsourced business services industry today, the backgrounds of chief executives from 50 companies were reviewed. They are from both publicly traded and privately held companies, across segments that include accounts receivable management, revenue cycle management and customer relationship management.
Only 12 percent of the chief executives joined their respective companies from outside the sector, whether they were hired into the role or promoted subsequent to joining the company.
On the surface, this indicates a reluctance to consider outsiders. However, it is also emblematic of challenges associated with attracting executives to the sector.
Forward-thinking companies in outsourced business services are well-positioned to attract leaders from different backgrounds because of tailwinds that will sustain growth.
By 2022, the outsourced business services market in the United States is projected to reach $148.3 billion, according to IBIS World, growing at an annualized rate of 2.7 percent, compared to 2 percent for the overall U.S. economy during this period.
As companies seek to realize expense reductions through outsourcing noncore functions, and demand for technology-driven solutions that exceed in-house capabilities continues to increase, the opportunity for outsourced business services to innovate is substantial.
However, an outsourced business service’s ability to successfully transform its offerings will hinge on its leadership.
GET ON BOARD EARLY
While we are still in the early stages of the technological transformation of outsourced business services, companies that adapt early will be best positioned for long-term success.
Having the right executives in place who can lead through an industry transformation and deliver innovation is the best way to position toward a competitive advantage.
Bill Borkovitz is a principal at JM Search in King of Prussia, where he recruits C-level executives across a range of industries, including for those in the Greater Lehigh Valley. He can be reached at firstname.lastname@example.org.