In its report, 'The Future of Outsourcing', independent market analysis firm, Datamonitor (DTM.L), examines what lessons the new wave of outsourcing can learn from the past, and what will drive its success going forward.

Datamonitors report examines outsourcing in automotive, energy, healthcare, technology and financial services markets. Its findings are as follows:

Sales force outsourcing is being used as a tactical manoeuvre by pharmaceutical companies, using the services provided by contract sales organisations (CSOs) to meet their short-term and longer-term. The benefits:

 Speed and efficiencies - CSOs can quickly a build salesforces or provide   additional sales representatives. This is useful for pharmaceutical companies to adapt to sudden changes in their salesforce needs;

 Expertise - Using a CSO can provide pharmaceutical firms with salesforce expertise in new geographic or therapeutic areas into which they wish to expand, but do not have the necessary expertise;
 
 Avoiding capital outlay - For some pharmaceutical companies, particularly smaller ones, such an investment may be too risky, or they may not have the upfront capital required. Outsourcing the function to a CSO offers a viable alternative.
 
Western domestic contact centre outsourcing is slowing whilst 'BestShoring' is the latest strategy to emerge
 
Outsourcing is continuing to grow across all vertical markets, and contact centres are no exception. However, western domestic contact centre outsourcing is slowing in the wake of new business realities and offshore locations, providing high levels of customer service at a lower cost. 
 
Many investors in the US and Western Europe have adopted to a 'nearshore' model as a way of moving their operations to cheaper locations. Simply put, they locate their facilities in relatively close proximity to the markets that they service. (eg from the standpoint of US investors, Canada and Mexico.)
 
However to derive maximum profits from outsourcing, many are now using  the 'BestShoring' strategy - tailoring specific customer care needs to locations that are best suited for these functions. It allows the investor to save on the cost of domestically sourcing the work, while at the same time removing the inflexibility of using only one offshore location.

For example, many outsourcers are now locating administrative-to-mid level customer care in offshore locations including India, Argentina and the Philippines (which may account for 60 70% of total call volume), while locating the high-end/value add work in nearshore locations, such as the Czech Republic or Egypt.

The result of the changing market conditions and the improved approach of US third party players mean that Europes map of card processors is starting to look very different than it did two years ago. One only has to look at the number of new outsourced processing relationships that have been signed over the last year.

These include, First Datas merchant acquiring alliances with ICS in the Netherlands and BNL in Italy; Société Générales relationship with eFunds for international card processing and euroConexs acquisition of Citibank Card Acceptance in Europe. In considering these recent, new relationships, as well as some of the acquisitions that have been made over the last year (largely by First Data International), it is clear that Europe is witnessing a second wave of outsourced card processing solutions.

The most successful approach taken by mass market customer service providers towards outsourcing has been to optimise systems in advance of relocating specific tasks, the report says. This recognises that there are economies of scale from outsourcing a single entity rather than a number of disparate systems. With the systems fully in place and functioning effectively, this allows for a further round of cost savings beyond those efficiencies that naturally fall out of a process optimisation process.