KPMG Sourcing Advisory 3Q12 Global Pulse Survey - KPMG Institutes

KPMG Sourcing 

Advisory 3Q12 

Global Pulse Survey 

Trends in shared services, outsourcing, and 

third-party business and IT service markets, 

gleaned from KPMG’s own field advisors 

and leading global service providers. 

kpmg.com

Introduction 

KPMG is pleased to release the findings from its KPMG 3Q12 global Sourcing Advisory 

Pulse survey. The Pulse surveys provide insights into trends and projections in enduser 

organizations’ usage of global business services (GBS). The learnings are gleaned 

from KPMG International (KPMGI) firms’ advisors, who work closely with end-user 

organizations that are actively exploring or undertaking domestic, near and offshore 

shared services and outsourcing, and other service delivery initiatives, as well as 

from leading global business and IT service providers. 

The Sourcing Advisory Pulse surveys are part of a broad family of KPMG Pulse 

surveys. This collective research program focuses on GBS market trending in specific 

geographies such as China or South Africa, functional areas such as real estate and 

facilities management (REFM), and specialized constituencies such as third-party 

legal counsel that advise buyer organizations on outsourcing. It examines related 

key topics such as cloud computing and human resources (HR) transformation and 

vertical industry business trends. 

Since their inception in 2004, the global Sourcing Advisory Pulse surveys have 

yielded insightful analyses of current and ongoing market trends in the use, 

deployment, and delivery of business and IT services. They capture changes in 

demand, usage levels, future adoption plans, and related key market indicators. They 

highlight the changes, and the direction of change, in the GBS market as a whole. The 

surveys focus on where the market is going and how that direction is changing—or 

not—as compared to prior quarters and years. 

This edition of the global Sourcing Advisory Pulse surveys reflects GBS market 

activity during 3Q12, as well as projections and predictions for the balance of 2012. 

Topics explored include: 

• Outsourcing deal pricing, service provider profitability, and scope 

• Drivers for GBS delivery improvement efforts 

• GBS demand and adoption trends 

• Annual review of trends in the usage of global shared services 

• Annual review of outsourcing transition trends and challenges 

2 Shared Services and Outsourcing Advisory / KPMG Sourcing Advisory 3Q12 Global Pulse Survey / October 2012 

© 2012 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services 

and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

The Pulse surveys focus on end-user organizations’ global use of shared services, 

outsourcing, and other third-party services across the following functional areas: 

• Customer care/call center 

• Finance and accounting (F&A) 

• Human resources (HR) 

• Information technology (IT) 

• Knowledge process outsourcing (KPO) 

• Procurement/source to pay 

• Real estate and facilities management (REFM) 

• Vertical industry business services 

The following leading global business and IT service providers 

participated in the 3Q12 survey: 

• Accenture 

• BT Global Services 

• CaliberPoint 

• Capgemini 

• CGI 

• CSC 

• Dell 

• Fujitsu 

• Genpact 

• HCL Technologies 

• HP 

• IBM 

• Infosys 

• NorthgateArinso 

• Syntel 

• T-Systems 

• TCS 

• Unisys 

• Xerox 

Questions or comments regarding the Pulse surveys should be directed to 

Stan Lepeak, director, Global Research, KPMG Management Consulting, at 

slepeak@kpmg.com or +1 203-458-0677. 

Shared Services and Outsourcing Advisory / KPMG Sourcing Advisory 3Q12 Global Pulse Survey / October 2012 3 



Table of Contents 

IManagement Summary 1 

II Highlights 2 

Market Conditions 3 

III 

IV Trends 4 

Outsourcing Market Macro Trends 26 

Global Shared Services Trends 27 

V 

Learn 

Advisors: Top Approaches to Improve Service Delivery Capabilities 14 

Business and IT Service Providers Market Demand Assessments 18 

Current Market Deal Characteristics: Service Providers’ Perspectives 22 

Outsourcing Transition Trends and Challenges 38 

More 5 

Where to Learn More about Global Sourcing Market Trends 42 

Appendix 43 







Management Summary 

3Q12 Global Pulse Survey | Summary 

Results from the 3Q12 edition of the quarterly global Sourcing Advisor 

Pulse surveys find that the mix of service delivery models organizations 

are using in their growing portfolio of GBS efforts continues to shift and 

evolve. Demand for outsourcing, especially generic back-office or 

“horizontal” outsourcing remains weak by historical standards, 

according to both third-party business and IT service providers and KPMGI 

firms’ advisors and consultants polled. Buyer organizations’ appetites 

to undertake any sort of change efforts became more muted in the 

quarter, representative of an increasingly pervasive “wait and see” 

attitude in uncertain economic times. Additionally, while offshore 

outsourcing remains a dominant service delivery model, organizations 

continue to exhibit greater relative interest and investment on both 

onshore and nearshore outsourcing and captive shared services 

centers. 

Advisors: Demand by Service Delivery 

Model, Past 1–2 Quarters, Net Change in Demand 




3Q12 Global Pulse Survey | Management Summary 

As covered in last quarter’s Pulse, there continues a slow death of the 

traditional one-dimensional model of global outsourcing focused 

purely on labor arbitrage. This is in part due to shrinking wage disparities 

across markets, but also because aggressive GBS adopters have already 

driven extensive costs out of their operations. Future cost savings will 

need to come from greater process automation, more streamlined and 

efficient processes, greater economies of GBS scale, and better alignment 

between GBS and commercial operating models. Greater GBS maturity, 

often in the form of better governance and commercial orientation, 

will drive cost savings, but more importantly, bring greater value to the 

business. While the quest for greater maturity is nothing new, the rigor 

and focus on doing so continues to intensify and become more formalized. 

KPMG is conducting a separate and ongoing market research effort on 

GBS maturity . 

KPMG GBS Maturity Model 

Value Capture and Performance Sustainability 

Level 5 – Integrated 

Globally integrated services portfolio with aggressive use of 

alternative and mixed delivery models 

Level 4 – Strategic 

Optimized balance of internal and external delivery 

capabilities, global sourcing with multifunction focus 

Level 3 – Optimized 

Traditional outsourcing relationships with global delivery; 

non-integrated internal shared services capabilities 

Level 2 – Rationalized 

Single function shared services with tactical onshore or 

offshore provider relationships 

Level 1 – Sub-Optimized 

Decentralized and duplicative functions; little central control 

over business support services 

The Journey . . . Development Stages . . . Time 





This quarter’s Pulse analyzes trends in buyer’s usage of global shared 

services centers as a core GBS component. Relative demand for 

domestic shared services centers has increased over the past year, 

though buyers maintain an increasingly global footprint for their shared 

services operations. Finance and accounting and human resources are 

the business functions most commonly placed into a shared services 

environment, though there is an increased interest in using shared 

services to deliver sourcing and procurement services. Overall, KPMG 

finds increased buyer interest in placing a broad range of business 

activities into a shared services environment including strategic work such 

data analytics and sales, and marketing support functions. 

Advisors: Change in Demand for Domestic Shared Services Centers Past 12 Months 

6% 48% 45% 

Down 

Flat 

Up 





The Pulse finds that service provider pipeline growth for outsourcing 

services fell to its lowest level measured in the Pulse survey, though there 

is guarded optimism for improvement over the balance of the year. There are 

a variety of factors negatively impacting outsourcing demand, including more 

focus on shared services, negative market conditions in the Eurozone, and 

near saturation in certain account segments. The use of alternative options 

(e.g., cloud) to traditional outsourcing is another gating factor for outsourcing 

demand, especially among providers with immature cloud offerings. Buyer 

tight rein over discretionary spending remains a barrier to growth. ITO, 

more specialized BPO in the form of specific vertical industry services, and 

multitower deals are the service areas that continue to exhibit the strongest 

levels of demand, though even here, while strategic, deals are often smaller 

than historical first-generation horizontal outsourcing efforts. 

Service Providers: Pipeline Growth Last Quarter 

55% 76% 61% 68% 

61% 

38% 

Advisors: Top Approaches to Improve Service Delivery Capabilities 

2Q11 

3Q11 

4Q11 

1Q12 

2Q12 

3Q12 




Highlights 

KPMG International Firms’ Shared Services and Outsourcing Advisor Highlights 




Third-Party Business and IT Service Provider Highlights 




Market Conditions 

3Q12 Global Pulse Survey | KPMG Firms’ Advisors: Top Approaches 

to Improve Service Delivery Capabilities 

KPMG polled its global network of shared services and outsourcing advisors (KPMG consultants working 

with clients in the field) as to the top approaches that buyers are employing today to improve service 

delivery performance, as well as to help minimize or reduce service delivery costs (see Figure 1). 

• Sixty-seven percent of advisors, down three 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. 

Figure 1 | Advisors: Top Approaches to Improve Service Delivery Capabilities 

• The second most commonly cited approach was 

internal process improvement or reengineering 

efforts, identified by 46 percent of advisors. Ranking 

a close third, and selected by 44 percent of advisors, 

was use/expansion of shared services with use/ 

expansion of ITO. 

• Improving governance processes and capabilities 

was the top cited approach by all classes of advisors 

(see Appendix for a breakout of KPMG firms’ 

advisors’ responses by geographic region and by 

functional area of focus). The expansion of shared 

services usage was, as to be expected, more 

frequently cited by advisors that support business 

process versus IT work. 




3Q12 Global Pulse Survey | Market Conditions 

Figure 2 | Advisors: Top Functional Focus Areas for Service Delivery Improvement Efforts 

KPMG firms’ sourcing advisors were asked in which functional areas buyers are today 

applying the approaches outlined in Figure 1 to improve service delivery capabilities (see 

Figure 2). IT was the most commonly cited functional area, identified by 65 percent of 

advisors, up one percent from last quarter, followed by F&A, selected by 56 percent of 

advisors. There was general consensus on these rankings across geographies with 

advisors serving the Asia-Pacific region more bullish on most categories of business 

process outsourcing 





KPMG firms’ advisors were next polled on the change in demand or usage 

levels over the past one to two quarters, and expected change in usage 

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 (see Figures 3, 4, and 5). 

• The greatest growth in demand was once again cited for shared services efforts, 

identified by 41 percent of advisors, down four percent from last quarter (see 

Figure 3). The percentage of advisors citing growth in demand for internal process 

improvement fell again from 44 to 40 percent. The number of advisors citing demand 

growth for ITO also fell from 38 to 30 percent, while BPO demand growth remained low 

at 20 percent of advisors. Twelve percent of advisors cited decreasing levels of demand 

for BPO. These weaker BPO growth expectations primarily reflect less demand for more 

traditional, horizontal BPO (e.g., FAO, HRO, and source to pay) versus more specialized, 

industry-specific BPO, where demand is stronger but deals are smaller and more diverse. 

In general, however, buyer organizations’ appetites to undertake any sort of change effort 

became more muted, representative of an increasingly pervasive “wait and see” attitude in 

uncertain economic times and in some markets an election year. 

• Looking forward over the next one to two quarters (see Figure 4), the greatest expected growth 

is for shared services efforts, identified by 49 percent of advisors, followed by, and identified by 48 

percent of advisors, unchanged from last quarter. Expectations for increased usage of ITO remained 

dropped from 40 to 30 percent, while BPO demand growth expectations slipped from 33 to 28 

percent of advisors polled. 

• Figure 5 illustrates the net change in demand (up minus down citations) by KPMG firms’ advisors over 

the past six quarters, 





Figure 3 | Advisors: Demand by Service Delivery Model, Past 1–2 Quarters 

Figure 5 | Advisors: Demand by Service Delivery 

Model, Past 1–2 Quarters, 

Net Change in Demand 

Figure 4 | Advisors: Demand by Service Delivery Model, Next 1–2 Quarters 





Business and IT Service Providers 

Market Demand Assessments 

KPMG polled leading global business and IT service providers on the current and expected 

growth levels in their pipelines for services deals. Providers polled this quarter were much 

more bearish regarding new deal pipeline growth projections than they were over the past 

several quarters, reflecting the increasingly clogged nature of pipeline in light of buyer 

uncertainty and hesitancy. 

• Thirty-eight percent of service providers cited 

pipeline growth over the past quarter, a decrease of 

23 percent from last quarter’s Pulse (see Figure 6), 

and the lowest level measured over the life of the 

Pulse as conducted by KPMG. It is important to note 

that the Pulse surveys measure change in pipeline 

growth levels, not absolute pipeline size or revenue 

levels. 

Figure 6 | Service Providers: Pipeline Growth Last Quarter 





• Fifty-nine percent of providers expected the pace 

of customer demand for business and IT services 

to increase over the next one to two quarters (see 

Figure 7), an increase of eight percent from last 

quarter, with 10 percent of providers polled expecting 

demand to decline. 

Figure 7 | Service Providers: Demand Next 1–2 Quarters 





Service providers polled, similar to KPMG firms’ 

sourcing advisors, cited IT as the strongest functional 

area of market demand. Sixty-four percent of providers 

polled, up nine percent from last quarter, identified IT as 

the top area of demand (see Figure 8). Next was FAO 

at 36 percent. KPMG recently participated in a webcast 

with HfS Research analyzing FAO market trends. A 

replay of this webcast is available for review to gain 

greater insights into evolving trends in the global FAO 

market. The third highest cited category was bundled 

business process and IT deals followed by vertical 

industry-specific services, a new category added last 

quarter. 

Figure 8 | Service Providers: Top Functional Areas of Demand 





Service providers were polled on demand levels by 

vertical industry and industry group. BFSI was clearly 

the top industry group, cited by 86 percent of service 

providers, down two percent from last quarter (see 

Figure 9). CPG was second just up from 46 to 76 

percent, and manufacturing third at 38 percent, with 

healthcare slipping to the fourth spot. While KPMG 

firms’ advisors were not polled specifically on demand 

by industry color, commentary and market insights 

gathered in the Pulse and client work supported the 

strong demand identified by providers in the BFSI 

sector. 

Figure 9 | Service Providers: Demand by Industry (Top 10) 





Current Market Deal Characteristics: 

Service Providers’ Perspectives 

The final section of the quarterly Sourcing Advisory global Pulse 

survey assesses the characteristics of current outsourcing and 

third-party services deals in the market from the perspective of 

the business and IT service providers polled. 





Pricing Competitiveness 

Increased pricing competitiveness implies the buyer 

has, or is trying to get, the upper hand in pricing for 

outsourcing or related third-party services deals. As 

pricing is one element of determining profitability, 

less competitive pricing is generally favorable to 

the service provider. The consensus for most of the 

past three years among service providers, especially 

India-based companies, is that buyers were getting 

more aggressive with their pricing demands, though 

this quarter’s Pulse results show little change in this 

pressure. Thirty-three percent of service providers 

polled, down six percent from last quarter, indicated 

that pricing pressure increased in the quarter, while the 

67 percent of service providers indicated they saw little 

or no change in pricing pressure (see Figure 10). 

Figure 10 | Service Providers: Pricing Pressure 





Contract Profitability and Ability to Increase Scope 

Some of the biggest factors impacting contract 

profitability today are buyer pricing pressure, 

wage inflation, and currency exchange rates, as 

addressed above, as well as buyer appetite for more 

profitable discretionary services such as consulting 

or transformational outsourcing, which for the most 

part are still relatively weak. Provider sentiment is 

unchanged this quarter on their ability to improve 

contract profitability (see Figures 11 and 12) through a 

combination of currency exchange benefits, pushing 

a mix of higher-profit services, and driving down 

their internal costs to deliver services via greater 

automation, standardization and delivery process 

streamlining, better managing of consumption levels, 

and in some cases better tying of pricing to service 

value delivered. 

Figure 11 | Service Providers: Contract Profitability, New Contracts 

Figure 12 | Service Providers: Contract Profitability, Existing Contracts 

• Thirty-three percent of service providers polled, 

unchanged from last quarter, indicated that contract 

profitability is improving in new deals, with just 

five percent indicating a decline in new contract 

profitability. 

• Twenty-nine percent of service providers expected 

to improve contract profitability in existing deals in 

flight for more than one year, down 12 percent from 

last quarter, while 10 percent indicated existing deal 

profitability is declining, down six percent quarter 

over quarter. 





Deal scope is another element that impacts service 

provider profitability. Larger deals tend to offer more 

room for greater profits, though this is not always 

the case. Doing more and broader work with a client 

should—from the provider’s perspective—ideally 

lead to doing more strategic, value-added and more 

profitable work. Following this logic, if providers are 

able to expand scope in a client account, profitability 

should improve. Conversely, if a provider cannot 

improve profitability, it should question whether to push 

for broader scope in the account. 

Figure 13 | Service Providers: Ability to Increase Deal Scope 

Figure 13 illustrates service provider expectations 

about their ability to increase scope, ideally in a 

profitable manner, in current accounts. Providers 

today are focused on growing business in existing 

accounts, not only because pursuit costs are lower than 

competing for new business, but also because doing 

so protects their base as buyers rationalize suppliers 

and cut back on spend levels. Expectations on ability 

to increase scope over the past year have been high, 

and in 3Q12 81 percent of service providers expect to 

increase scope in current accounts, while the balance 

expected scope levels to remain constant. 




Trends 

3Q12 Global Pulse Survey | Trends 

Outsourcing Market Macro Trends 

KPMG on a quarterly basis publishes an outsourcing deal tracking report. Results from the most recent, 2Q12 edition of 

that report are available via this link. KPMG also conducts in-depth market studies on ITO trending in Europe, as well as 

other outsourcing related research, all of which is available on the Shared Services and Outsourcing Institute site. 

KPMG firms’ advisors offered the following comments on GBS trending and service delivery improvement efforts: 

“ “ 

“ 

“ 

“ “ “ 

“ 

In Asia there is a definite trend in expanding the 

level of activities going into shared services and 

outsourcing and a focus on improving what is 

already in there; however, the business cases are 

becoming more difficult to get through. 

More clients are interested in the RIGHT sourcing 

models as oppose to outsourcing or offshoring. A 

Combination of full process and IT is preferred as 

opposed to silos. 

Things may slow a little; however, the focus is 

increasingly on ‘lean’ processes, and this will bring 

new opportunities in the global business services 

space. It may even lead to increased innovation in 

and around existing services. 

Political instability will need to clear before forward 

progress is reignited. 

More clients are investing in outsourcing and 

shared services governance—including developing 

centers of excellence or creating a governance 

shared service center. Second is more interest in IT 

service integration. 

There is an increase in interest in ‘middle office’ 

services in public sector clients such as policing, 

universities, and local government going beyond 

interest in traditional back-office areas. 

Innovation is a hot topic in Asia, especially in China. 

Chinese operations and businesses are using 

existing operations to not only drive efficiency but 

to look for new ways to service the market, be it 

the internal market or external market. This isn’t just 

about technology, but combining and developing 

existing operations and solutions, and using them 

to drive strategic value. 

The government sector continues to place an 

emphasis on acquiring service integrators to 

undertake the vast majority of their IT function 

without releasing people! 

The rise of small specialized providers is putting 

enormous pressure on the established providers. 





Global Shared Services Trends 

Over the past three years there has been an uptick and rebound in buyers’ interest in the 

use and expansion of shared services operations to support various back-office functions 

and processes in areas such as IT, F&A, HR, and procurement as well as increasingly 

front-office activities such as analytics and sales and marketing support. While some 

have viewed shared services as a precursor to outsourcing, there is a range of 

scenarios and situations where buyers see shared services as complementary or 

preferable to the use of outsourcing. In some cases this is because of the nature of 

work being performed, and in others it is more simply because buyers feel they can 

perform the work better or cheaper than an outsourcer. 

Organizations must perform thorough assessments to determine which the preferred delivery model 

mix should be for a given functional area, and develop a sound means to measure the performance 

and success of each model. The trend towards increased interest in the use of shared services in 

conjunction with, or in lieu of, traditional outsourcing has increased over the past year since KPMG 

last polled on the topic via the Pulse. 

The value proposition and success metrics for shared services operations are evolving. Leading 

organizations today receive measureable business value from shared services—above 

and beyond driving costs down via consolidation, automation, and labor arbitrage. These 

organizations are assuming a more commercial orientation to the business. This involves 

driving and improving overall business performance as well as competing for internal 

business on level ground with external service providers. KPMG’s ongoing global business 

services research efforts closely examine how organizations are driving the maturity of 

their global shared services efforts. 





Buyer Global Sourcing Preferences and Demand 

Levels 

Exploring these shared services trends, KPMG polled 

third-party service providers and KPMG International’s 

(KPMGI) member firms’ shared services and 

outsourcing advisors on buyer preferences and demand 

levels for different types of global sourcing models, 

including shared services. Demand was ranked on a 

one-to-five scale, where one represents significant 

decrease in preference or demand, three represents 

no change, and five represents significant increase 

in preference or demand (see Figure 14 for average 

scores and Figure 15 for the breakout of results by 

sourcing model). 

• Advisors ranked offshore captive shared services centers the lowest, just above the 3.0 midpoint score, though 

the overall top to bottom range in scores was small. There were no major variations in scores based on the 

geographic or functional focus areas of the advisors polled. 

Figure 14 | Advisors and Service Providers: Buyer Global Sourcing Preference/Demand 

• Advisors scored each of the delivery models in a 

relatively close range. Ranked highest by advisors 

was nearshore outsourcing at 3.42 on the one-to-five 

scale followed by domestic shared services centers 

at 3.39 (Figure 14). This represents 52 percent of 

advisors and service providers, indicating some 

or significant increase in preference or demand 

for nearshore outsourcing (Figure 15). Service 

providers polled scored nearshore as well as offshore 

outsourcing slightly higher than advisors. 

Nearshore outsourcing 

Domestic shared 

services centers 

Nearshore captive 

shared services centers 

Domestic outsourcing 

Offshore outsourcing 

Offshore captive 


Nearshore outsourcing 

Offshore outsourcing 

Nearshore captive 


Domestic outsourcing 

Domestic shared 

services centers 

Offshore captive 






Figure 15 | Advisors and Service Providers: Buyer Global Sourcing Preference/Demand 





The Pulse survey next probed deeper into buyers’ 

focus on and usage of shared services. KPMG firms’ 

advisors were asked to characterize buyers’ interest in 

adopting or expanding over the past 12 months each of 

the three standard shared services models (onshore, 

nearshore, and offshore, see Figure 16). 

• The greatest increase in demand, as cited by 45 

percent of advisors polled and up nine percent year 

over year, was for domestic captive shared services 

centers. Nearshore centers scored 37 percent 

and offshore captive centers 35 percent. Fourteen 

percent of advisors noted a drop in demand for 

offshore captive centers. 

While the market is seeing a growth in buyer interest to expand shared service operations, this increase in interest 

varies across the different geographic delivery model options. The pace of demand growth for offshore centers in 

the more mature Indian market, for example, is being outpaced by demand growth in Asia-Pacific, especially China. 

Some of this growth in the China market is to serve local Chinese organizations or support market penetration 

and growth efforts by Western firms, though there is also a growing trend for organizations based in that region to 

consolidate existing shared services operations in China. 

Figure 16 – Advisors: Change in Demand for SSC Models Past 12 Months 

• Advisors in EMEA cited much lower levels of 

increased demand for domestic shared services 

centers (22 percent) compared to advisors primarily 

supporting deals in the Americas, and specifically the 

United States (49 percent cited increased demand). 

There was general consensus across all advisor 

groups on demand growth for nearshore centers. 





Top Functional Areas of Demand for Shared 

Services 

Next assessed was the functional areas where buyers 

have already deployed shared services operations, 

and which areas they plan to expand efforts over the 

next 12 months. Shared services demand and planned 

investment levels by functional area are similar to those 

exhibited for outsourcing (see Figure 17). 

• The top functional area cited by 57 percent of 

advisors for existing shared services deployments 

was in IT operations. This was followed by F&A at 

56 percent and human resources at 40 percent. 

Research & development was the functional least 

likely deployed into a shared services environment, 

though future growth plans are stronger. Growth 

expectations were generally aligned with existing 

functional investments with the exception of the 

sourcing and procurement functions, which 46 

percent of advisors identified as being targeted for 

growth over the next 12 months. 

These findings highlight that buyers are expanding the use of shared services across a broad range of functional 

areas. Even areas with limited investments today, such as research and development, are expected to see 

increased usage going forward. This, coupled with combined usage of multiple different geographic delivery 

footprints (e.g., domestic, nearshore, offshore), plus the ongoing growth of outsourcing, highlights the increasingly 

complex and global service delivery models organizations are building. 

Figure 17 | Advisors: Top Functional Areas of Demand for SSCs 

Up 11% Y/Y 

Up 9% Y/Y 

• There were no major regional variances in 

assessment of current shared services investment 

and future expansion plans. 





Shared Services Drivers, Goals and Success Levels 

The continued global growth and expansion of shared services operations implies 

organizations are reaping the benefits sought—or why would they continue to 

expand operations? It is important to understand, however, the specific goals and 

drivers for these efforts and to what degree organizations are having success in 

achieving them. KPMG polled its firms’ advisors on each of these points (see 

Figure 18). 

• Expectedly, reducing operating expenditures (measured on the right-hand 

scale of the chart), is the top goal cited by buyers’ shared services efforts, 

selected by 77 percent of advisors polled. A distant second at 51 percent 

was achieving economies of scale, though often economies of scale 

are a key means to reduce operating expenditures. These rankings are 

the same as in last year’s study. No other goal or driver was selected 

by more than 40 percent of advisors. Advisors in EMEA scored 

reducing operating expenditures the highest with 79 percent 

selecting the driver, while advisors were also more likely to cite 

enabling IT systems and applications optimization as a goal. 

• Buyers are having moderate, but not great, success in 

achieving the goals sought in their shared services efforts. 

Advisors ranked on a one-to-five scale, where one represents 

not at all successful and five highly successful, the success 

they felt buyers are having in achieving the drivers sought. 

Scores for all goals were clustered in a relatively tight 

band between the highest (3.38 for achieving economies 

of scale) to the lowest (2.72 for gaining access to new 

markets, a somewhat peripheral goal). 





Clearly there is room for improvement in buyer success 

rates in achieving the goals they seek in the usage 

of shared services. One challenge is that as shared 

services efforts become more expansive, global, and 

complex, achieving success will become more difficult. 

More sophisticated and experienced buyers continually 

challenge themselves by raising the bar for success. 

Many organizations achieve short-term success from 

“quick hit” wins (i.e., one-time cost reduction from 

moving work offshore, or consolidating IT operations), 

but then struggle to continually improve operations 

and drive down costs, and stagnate over time from an 

improvement standpoint. Finally, there is the challenge 

of defining a continual improvement road map, and 

completing goals and levels with the associated 

benefits and costs to achieve, and the metrics to define 

achievement. 

Figure 18 | Advisors: Top Goals/Drivers for SSCs & Success Achieving 





Shared Services Success Factors and Points of 

Failure 

Given that there is room for improvement in meeting 

typical buyers’ shared services’ goals and drivers in 

shared services efforts, KPMGI polled its member 

firms’ advisors on the key success factors and most 

common points of failure in shared services efforts (see 

Figure 19). 

• Executive management support was identified as 

the top key success factor in shared services efforts, 

selected by 73 percent of advisors polled, the same 

as in last year’s poll. This was followed closely by 

service quality of the shared services operations 

themselves identified by 64 percent of advisors. That 

the shared services operation is run as a business 

was also selected by 46 percent of advisors. 

• Executive management support, or lack thereof, was 

also identified as the most common point of failure 

in shared services efforts, selected by 55 percent of 

advisors. No other point of failure was selected by 

over 50 percent of advisors, with the second most 

frequently identified point being service quality at 45 

percent, up 11 percent year over year. 

Figure 19 | Advisors: Key SSC Success Factors & Points of Failure 

Up 11% Y/Y 

Up 9% Y/Y 





The 2Q12 edition global Sourcing Advisory global Pulse survey assessed the top 

challenges to service delivery improvement efforts such as those faced in shared 

services efforts. The top two challenges cited were retained organization, transition 

and outsourcing governance challenges, and inadequate change management 

capabilities. Identifying these challenges as well as shared services key success 

factors and points of failure is the easier part; achieving and addressing them is the 

bigger and more importance challenge. 

Relative to a factor such as executive management support, it is critical to educate 

key executives and set the goals for the shared services operations, and ensure they 

understand and recognize the measurable benefits, costs, and time frame to achieve. 

Factors such as service quality relate more to skills, resources, and best practices 

identification. There is a range of key elements that contribute to shared services— 

and outsourcing—success that buyers should aspire to as they evolve and mature 

their service delivery capabilities. They include the following: 

• A formally documented multiyear strategy links to the overall organizational 

mission, vision, and strategy 

• Comprehensive organizational planning, including succession plan development, 

key resource development, and definition of staff skills mix 

• An aggressive exploration of sourcing alternatives has been explored and, where 

applicable, implemented to create a blended service delivery model that leverages 

both internal and external capabilities and resources 

• Governance by a steering committee comprised of customer representatives, 

functional leadership, and business services leadership 

• A highly standardized environment that promotes maximum reliability, 

supportability, and efficiency 





Shared Services and Outsourcing 

Virtually all large organizations have undertaken at least 

some level of outsourcing as well as shared services. 

This is reflected in the third bullet in the paragraph 

above and recognizes the benefit of employing 

different service delivery models to support needs 

and requirements. The key is to recognize that it is not 

an either-or scenario and that shared services is not 

necessarily a stepping stone to outsourcing, though in 

some cases it can prove a valuable precursor. The next 

section of the global Advisory Pulse survey explores the 

relationship and interaction between shared services 

and outsourcing. 

Figure 20 – Advisors: SSC’s Contribution to Outsourcing Success 

The first point relative to the connectivity between 

shared services and outsourcing addressed in the 

Pulse survey was assessing to what extent having an 

internal shared services organization in place prior to 

outsourcing contributes to outsourcing success (see 

Figure 20). Forty-eight percent of advisors polled felt 

that having deployed an internal shared organization 

before undertaken significant outsourcing was 

moderately helpful to shared services success and 38 

percent felt a strong enabler to success. 

Next the Pulse examined what, if any, improvements 

do buyers typically gain when they move to an 

outsourcing model from a pre-existing shared services 

effort. KPMG firms’ advisors were asked to rank to 

what degree five different improvements are achieved 

in this type of transition. The rankings were on a one-tofive 

scale where one represents improvements not at 

all achieved, three improvements somewhat achieved, 

and five improvements fully achieved (see Figure 21). 

All improvements were scored overall on average 

around the midpoint on the one-to-five scale, 

evidencing positive value for shared service preceding 

outsourcing efforts. The improvement cited as 

most often achieved was the ability to drive process 

redesign, and next was the ability to improve the risk 

and control environment. 





Figure 21 | Advisors: Improvements when Outsourcing Replaces SSCs 

Service providers were polled on the extent to which they felt increased interest in shared services among 

buyer organizations would impact demand for traditional outsourcing over the next 12 months. Forty-six percent 

of providers polled, up ten percent from last year, predicted that buyer interest in shared services would have 

organizations’ investments into shared services are driving more demand for traditional third-party outsourcing 

services. Forty-one percent of providers indicated that buyers’ use of shared services would have little or no 

material impact on outsourcing demand. The balance indicated that organizations’ investments into shared 

services are detracting from their interest and demand for traditional third-party outsourcing services. 

It is not surprising that most outsourcing service providers would not expect, or at least admit, that shared would 

detract from outsourcing demand. Advisors’ results and market conditions, however, reinforce the bundled 

or hybrid approach buyers are taking to global services delivery, a model in which both shared services and 

outsourcing have equal importance. Service providers can potentially play a key role supporting buyers’ shared 

services efforts either through providing ancillary products or services or through complementary outsourcing 

efforts. 

Several providers polled in the Pulse survey, for 

example, highlighted the work they do with buyers 

in co sourcing or managed services models. As the 

market continues to evolve, the line between cloud 

computing, traditional enterprise software models, 

shared services, and traditional outsourcing, will 

continue to blur. 

KPMG firms’ advisors offered the following comments 

on buyer organizations’ global use of shared services 

operations: 

“ 

“ 

Attitudes are slowly shifting towards onshore 

outsourcing and domestic onshore. Offshore 

outsourcing is also acceptable if material cost 

efficiencies are found. 

The regulators are going to be a key driver 

here, potentially forcing businesses to look at 

domestic operations and the regional/global 

support models, and to see where they need to 

tweak these in order to comply with the local 

regulations. 

Companies are looking to continue reducing 

costs; however, there is great concern to 

maintain customer satisfaction levels. 





Outsourcing Transition 

Trends and Challenges 

On an annual basis, KPMG examines the challenges that buyer organizations have with the transition process 

in outsourcing deals. Transition represents the start of outsourcing governance efforts, the time when the 

proverbial outsourcing “rubber meets the road” and outsourcing aspirations become reality—or not. The issue 

is that transition efforts are inherently difficult, and some amount of dissatisfaction and disappointment is 

inevitable. The challenge is to minimize problems and accelerate the transition effort as much as possible. 

The Pulse survey first polled service providers and 

KPMGI member firms’ advisors on the most common 

causes of transition failure (see Figure 22). “Failure” 

was defined as outsourcing objectives not being met as 

a result of transition. 

Figure 22 | Root Causes for Transition “Failure” 

• The most common reason cited for outsourcing 

transition failure by advisors and service providers 

was ineffective relationship and program governance 

during transition, selected by 59 percent of advisors 

and 70 percent of service providers. Ranked second 

by 56 percent of advisors was inadequate transition 

project planning and due diligence, which service 

providers ranked third. Service provider ranked lack 

of understanding of the deal and scope by transition 

teams and business units second, while advisors 

ranked the cause third. 

Up 28% Y/Y 

• Advisors that primarily support EMEA deals and 

clients were more likely to cite the cause as lack of 

understanding of the deal and its scope. 





These findings illustrate that a variety of factors 

contribute to problematic outsourcing transition efforts 

and lead to outsourcing efforts commencing on the 

“wrong foot.” Digging deeper, KPMG assessed the 

aspects of transition that buyers most commonly 

ignore, which lead to the root-cause failures identified 

above (see Figure 23). There were some differences 

of opinion between advisors and service providers 

regarding which transition aspects were most 

frequently ignored. 

Figure 23 | Most Frequently Ignored Aspects of Transition by Buyers 

The top ignored aspect of transition, cited by 72 

percent of advisors, was effectively managing the 

change. This was also the top choice among service 

providers, followed closely by adequately resourcing 

the transition project. 





There were also differences of opinion, not surprisingly, 

between service providers and KPMGI member firms’ 

advisors on how often outsourcing transition efforts 

are completed on time, within budget, and with the 

required functionality, finding a difference of opinion 

between advisors and service providers (see Figure 

24). 

• Service providers were much more positive on 

projections of how often transitions are successfully 

delivered. Thirty-two percent of providers, compared 

to just two percent of advisors, indicated that almost 

all (>90%) of transitions are completed on time 

and budget with the required functionality, though 

the service provider number was down 18 percent 

year over year. Forty-one percent of advisors said 

that many (40%–70%) and 37 percent said that 

few (10%–40%) of transitions are delivered to 

specification. 

• Advisors in EMEA were even more skeptical 

than those in the Americas on the frequency of 

successful outsourcing transitions. 

There is a subjective element to defining a successful 

outsourcing transition, and it is important to factor 

in that buyers “get what they pay for” in terms of 

investing adequate time, effort, and skills into a 

transition. The broad differences between advisors 

and service providers are both a function of the size 

and complexity of deals being considered as well as 

different interpretations of “required functionality.” 

Finally, KPMG polled service providers as well as 

KPMGI member firms’ advisors about how often 

they feel transitions negatively affect the start of the 

relationship between the client and the service provider 

(see Figure 25). 

Figure 24 | % of Transitions Completed On Time/Budget and to Requirements 

Figure 25 | How Often Transitions Negatively Affect Start of Buyer/SP Relationship 

• On this point there is some, but not much more, 

consensus. Advisors clearly feel that a problematic 

transition can negatively impact the ongoing 

outsourcing effort. Fourteen percent of advisors and 

service providers indicated that transitions almost 

always (>90%) negatively affect the start of the start 

of a buyer/service provider relationship. Fifty percent 

of advisors said that they frequently (70%–90%) 

negatively affect efforts, compared to just nine 

percent of service providers. No advisors but five 

percent of service providers felt transitions rarely 

(


The main point to take away from these findings is the 

importance of both buyers and service providers to 

adequately prepare for outsourcing transitions efforts. 

Buyers should not short transition resources. They 

should take a structured and thorough approach to 

transitions just as they should to designing, deploying, 

and staffing the outsourcing governance organization. 

Service providers should ensure they have adequate 

and skilled resources to support transition efforts, 

recognizing these investments directly correlate to a 

greater likelihood of a long-term positive relationship 

with the client. 

KPMG member firms’ advisors offered the following 

additional commentary on outsourcing transition 

challenges. 

“ 

“ 

Target operating models detailing the 

interaction between the service center and 

onshore operations cannot be underestimated. 

Having a deep understanding of change 

management and managing the key messaged 

right from the start is crucial. 

Poor contracts delivered through protracted 

negotiations often end up being the sticking 

point to innovation and service improvement. 

The relationship can often tailspin out of control 

as the sole issue for client contract managers is 

the contract! 

U.S. companies and staff have a difficult 

time with cultural differences with offshore 

resources. 

The retained organization is often overlooked, 

and on day one the service center knows what 

to do, but the team in-country does not. 

Third-party providers offered these comments on 

outsourcing transition challenges. 

“ 

“ 

Client-retained teams lack of understanding 

and experience of transition and change 

management is the problem. 

Transitioning IT services, know-how, and people 

in an outsourcing engagement can be complex. 

Effective IT transition management ensures 

an environment is integrated in a seamless 

manner with a focus on maximizing business 

availability. 

Transition is no longer person to person 

knowledge transfer. Now complex transitions 

comprise multitrack, multiservice-line operating 

model transitions making execution a challenge 

for both clients as well as service providers. 




Learn More 

3Q12 Global Pulse Survey | Learn Where to Learn More about 

Global Sourcing Market Trends 

KPMG Online Research Portals and Blogs 

• KPMG Shared Services and Outsourcing Institute 

• KPMG Management Consulting Blog: Advice Worth Keeping 

• KPMG Management Consulting Podcast Series: Advice Worth Keeping 

• Directory of all KPMG Institutes 

Service Provider Performance and Satisfaction Market Studies 

On an ongoing basis, KPMG conducts a wide range of market studies on ITO Service 

Provider Performance and Satisfaction. These studies survey and interview buyers 

actively engaged in outsourcing efforts with a named set of leading, market-specific 

providers. The research unveils direct insights into buyer opinions on service provider 

performance levels, and also assesses and interprets general outsourcing demand 

and activity trends in the markets covered. Market coverage and due dates for the 

next editions of these studies are as follows: 

• BeLux (released May 2012) 

• Nordics (released June 2012) 

• Netherlands (released July 2012) 

• U.K. (released July 2012) 

• Germany (next release, 3Q12) 

• Pan-European ITO (includes France, next release 3Q12) 

Executive summary reports for all of the completed research efforts are available free 

of charge, and complete results are available for a fee by contacting Stan Lepeak. 




3Q12 Global Pulse Survey | Learn More 

Appendix 

Key Questions by Advisors’ Primary Geography and Outsourcing Focus Area 

All IT BP All Function Global Americas EMEA AsiaPac 

Top Approaches to Change 

Improve current SSC/outsourcing governance 67% 70% 65% 66% 57% 64% 67% 50% 

Internal process improvement/re-engineering efforts 46% 44% 51% 48% 40% 41% 45% 56% 

Investments into/improvements to enterprise software systems 17% 16% 19% 23% 14% 23% 10% 11% 

Investments into cloud computing services 28% 41% 24% 34% 29% 30% 27% 22% 

Use/expansion of SSCs 44% 25% 57% 46% 45% 54% 29% 50% 

Use/expansion of offshore captive SSCs 21% 21% 26% 18% 26% 21% 18% 39% 

Use/expansion of ITO 42% 63% 22% 48% 38% 43% 55% 22% 

Use/expansion of BPO 22% 17% 27% 30% 14% 31% 29% 22% 

Nothing/major improvements not required 1% 1% 1% 2% 0% 2% 2% 0% 

Nothing/lack of ambition/execute support/funding 2% 4% 3% 0% 2% 2% 0% 6% 

Top Functional Focus Areas 

All areas, including IT 15% 20% 19% 18% 7% 16% 19% 11% 

All business functions 13% 10% 14% 16% 17% 13% 10% 22% 

Vertical industry specific bus. functions 6% 9% 6% 14% 2% 13% 6% 6% 

Customer care 12% 11% 14% 14% 19% 10% 2% 17% 

F&A 56% 47% 59% 57% 55% 51% 60% 61% 

HR 31% 24% 34% 27% 38% 28% 27% 22% 

IT 65% 78% 47% 73% 67% 64% 75% 44% 

Manufacturing 3% 4% 4% 7% 0% 3% 2% 6% 

Procurement/source to pay 29% 28% 34% 30% 21% 36% 27% 39% 

REFM 8% 3% 10% 11% 7% 11% 8% 0% 

R&D 1% 1% 0% 2% 5% 0% 0% 0% 

Sales & marketing 4% 6% 6% 5% 7% 5% 0% 0% 

Supply chain 16% 16% 23% 18% 10% 20% 13% 17% 

Transportation/logistics 3% 3% 4% 2% 0% 3% 2% 6% 






Change in Demand Last 1-2 Quarters 

Up 40% 43% 41% 36% 46% 32% 36% 44% 

Internal process improvement 

Flat 57% 57% 55% 62% 54% 64% 59% 56% 

Down 3% 0% 4% 2% 0% 4% 5% 0% 

Up 41% 35% 41% 46% 41% 45% 30% 59% 

Shared services/SSC 

Flat 53% 58% 55% 49% 56% 48% 64% 41% 

Down 6% 8% 4% 5% 2% 7% 7% 0% 

Up 29% 34% 13% 29% 17% 29% 30% 50% 

ITO 

Flat 65% 63% 80% 64% 71% 64% 65% 50% 

Down 7% 3% 8% 7% 12% 7% 4% 0% 

Up 28% 34% 22% 24% 23% 22% 27% 59% 

BPO 

Flat 60% 57% 63% 66% 65% 63% 63% 35% 

Down 12% 9% 15% 10% 13% 15% 10% 6% 

Change in Demand Next 1-2 Quarters 

Up 48% 48% 49% 41% 48% 46% 39% 53% 

Internal process improvement 

Flat 49% 50% 46% 54% 52% 52% 52% 47% 

Down 4% 2% 4% 5% 0% 2% 9% 0% 

Up 49% 42% 53% 43% 50% 58% 36% 44% 

Shared services/SSC 

Flat 46% 55% 43% 53% 50% 40% 55% 50% 

Down 5% 3% 4% 5% 0% 2% 9% 6% 

Up 30% 31% 19% 38% 25% 35% 31% 43% 

ITO 

Flat 63% 63% 76% 55% 70% 56% 64% 50% 

Down 6% 6% 5% 8% 5% 9% 4% 7% 

Up 28% 28% 21% 29% 26% 17% 28% 50% 

BPO 

Flat 63% 64% 69% 66% 69% 67% 68% 44% 

Down 9% 8% 10% 5% 5% 15% 5% 6% 

Delivery Model Demand 

Domestic shared services centers 3.39 3.29 3.44 3.51 3.32 3.39 3.28 3.31 

Nearshore captive shared services centers 3.37 3.29 3.38 3.52 3.43 3.31 3.24 3.38 

Offshore captive shared services centers 3.20 3.17 3.16 3.12 3.19 3.07 3.37 3.50 

Domestic outsourcing 3.31 3.37 3.28 3.48 3.33 3.35 3.33 3.59 

Nearshore outsourcing 3.42 3.43 3.39 3.46 3.53 3.35 3.44 3.67 

Offshore outsourcing 3.31 3.50 3.19 3.19 3.19 3.23 3.56 3.50 






SSC Demand 

Up 45% 30% 53% 58% 51% 49% 22% 41% 

Domestic shared services centers 

Nearshore captive shared services centers 

Offshore captive shared services centers 

Coordination of New Global Sourcing Efforts 

Flat 48% 67% 44% 28% 38% 45% 66% 53% 

Down 6% 3% 3% 14% 11% 5% 12% 6% 

Up 37% 29% 35% 44% 49% 30% 27% 38% 

Flat 61% 67% 63% 56% 51% 67% 71% 63% 

Down 2% 5% 2% 0% 0% 4% 2% 0% 

Up 35% 37% 33% 35% 38% 30% 40% 63% 

Flat 50% 49% 57% 48% 43% 54% 55% 38% 

Down 14% 14% 10% 18% 19% 17% 5% 0% 

Administrative svcs In Place 29% 26% 33% 27% 27% 27% 38% 29% 

Customer care In Place 29% 27% 23% 30% 35% 36% 21% 24% 

Document svcs (print, mail) In Place 20% 21% 22% 27% 16% 22% 19% 12% 

F&A In Place 56% 47% 63% 57% 57% 64% 55% 53% 

HR In Place 40% 35% 41% 39% 41% 47% 33% 29% 

Industry specific svcs In Place 13% 13% 11% 20% 8% 11% 14% 18% 

IT In Place 57% 61% 63% 57% 62% 67% 52% 59% 

REFM In Place 11% 6% 11% 18% 16% 15% 10% 6% 

R&D In Place 9% 10% 11% 11% 5% 11% 12% 6% 

Sourcing & procurement In Place 30% 29% 39% 27% 30% 35% 29% 6% 

Functional SSC Demand-Expand Next 12 Months 

Administrative svcs 25% 31% 20% 30% 14% 20% 31% 29% 

Customer care 22% 24% 23% 25% 27% 15% 19% 41% 

Document svcs (print, mail) 12% 13% 16% 11% 14% 9% 12% 6% 

F&A 52% 53% 53% 45% 49% 45% 64% 65% 

HR 47% 48% 44% 50% 51% 38% 43% 65% 

Industry specific svcs 19% 11% 20% 20% 14% 22% 14% 24% 

IT 43% 56% 36% 34% 38% 42% 50% 35% 

REFM 23% 18% 22% 27% 27% 25% 12% 12% 

R&D 16% 13% 11% 20% 22% 15% 12% 24% 

Sourcing & procurement 46% 44% 47% 48% 43% 47% 43% 47% 






SSC Usage Drivers/Goals 

Reduce future investment costs (CapEx) 24% 22% 22% 29% 14% 27% 19% 18% 

Reduce operating costs (OpEx) 77% 73% 80% 76% 83% 78% 79% 65% 

Enabling process redesign/re-engineering 35% 34% 39% 29% 42% 42% 31% 29% 

Increasing process automation 22% 23% 28% 19% 25% 22% 19% 24% 

Enabling IT systems/applications optimization 31% 39% 23% 36% 19% 33% 43% 24% 

Accessing lower cost offshore locations 24% 28% 11% 26% 25% 20% 21% 53% 

Accessing third party talent/expertise 15% 17% 14% 10% 11% 11% 21% 18% 

Supporting access to new markets 11% 9% 9% 10% 17% 13% 5% 12% 

Achieving greater economies of scale 51% 47% 55% 45% 58% 45% 48% 35% 

Enabling continuous process improvement 29% 28% 36% 29% 33% 24% 24% 18% 

Success in Achieving SSC Goals 

Reduce future investment costs (CapEx) 3.02 3.05 3.00 2.92 2.95 2.94 3.08 2.81 

Reduce operating costs (OpEx) 3.35 3.31 3.37 3.22 3.54 3.26 3.54 3.06 

Enabling process redesign/re-engineering 3.06 2.92 3.17 2.88 3.24 3.04 3.05 3.00 

Increasing process automation 3.06 3.02 3.16 2.75 3.14 3.10 3.05 2.88 

Accessing lower cost offshore locations 3.37 3.45 3.33 3.18 3.49 3.21 3.68 3.87 

Accessing third party talent/expertise 2.92 3.02 2.97 2.59 2.84 2.86 2.82 3.07 

Supporting access to new markets 2.72 2.74 2.66 2.65 2.78 2.71 2.72 2.67 

Achieving greater economies of scale 3.38 3.28 3.48 3.10 3.47 3.40 3.41 3.06 

Enabling continuous process improvement 2.93 2.78 3.10 2.80 3.24 2.85 2.87 2.63 

SSC Success Factors 

Shared services "brand" Success 25% 19% 28% 40% 30% 26% 19% 12% 

Executive management support Success 73% 74% 77% 71% 84% 72% 64% 88% 

Customer centricity Success 45% 45% 53% 50% 27% 53% 45% 47% 

Charge back structure Success 16% 16% 17% 24% 14% 19% 12% 24% 

Service quality Success 64% 66% 70% 67% 59% 74% 62% 65% 

Competitive with third party SP alternatives Success 20% 27% 22% 21% 8% 23% 17% 29% 

Run as a business Success 46% 44% 45% 43% 46% 53% 36% 65% 

Enabling IT systems Success 41% 42% 36% 40% 41% 42% 40% 29% 






SSC Key Points of Failure 

Shared services "brand" Failure 17% 10% 23% 12% 22% 15% 7% 18% 

Executive management support Failure 55% 50% 56% 55% 65% 58% 55% 41% 

Customer centricity Failure 27% 26% 31% 19% 24% 17% 43% 24% 

Charge back structure Failure 25% 32% 27% 21% 32% 25% 17% 24% 

Service quality Failure 47% 47% 47% 52% 49% 49% 43% 59% 

Competitive with third party SP alternatives Failure 21% 23% 23% 24% 22% 25% 17% 12% 

Run as a business Failure 33% 26% 36% 36% 35% 38% 31% 35% 

Enabling IT systems Failure 31% 32% 34% 33% 16% 40% 26% 47% 

SSC Impact on Outsourcing Success 

Inhibitor 2% 3% 0% 0% 0% 0% 0% 12% 

Neutral/no material impact 13% 20% 9% 9% 9% 11% 15% 24% 

Moderately helpful 48% 42% 48% 56% 54% 47% 53% 41% 

Strong enabler 38% 34% 42% 35% 37% 42% 33% 24% 

Transitions: Key Reasons for "Failures" 

Lack of understanding of the deal/scope 49% 48% 56% 57% 31% 50% 65% 44% 

Insufficient knowledge transfer & testing 37% 34% 42% 34% 39% 41% 40% 31% 

Inadequate proj. planning & due diligence 56% 65% 52% 59% 64% 61% 49% 56% 

Poor on-boarding/transfer process 26% 23% 23% 27% 22% 29% 21% 38% 

Insufficient trans. mgmnt by both parties 44% 47% 34% 43% 47% 48% 33% 31% 

Transition teams not ready at cutover 13% 16% 11% 16% 17% 13% 16% 19% 

Missed transition deadlines 10% 8% 14% 14% 6% 7% 16% 13% 

Poor transition deliverable quality 19% 19% 20% 18% 14% 13% 16% 38% 

Ineffective relationship & program governance during transition 59% 60% 59% 61% 64% 63% 58% 69% 

Transitions: Issues Ignored 

Adequately resourcing the trans. project 54% 53% 41% 64% 53% 62% 45% 50% 

Re-aligning the retained organization 52% 58% 50% 52% 53% 53% 57% 50% 

Establishing an effective oversight committee & joint gov. framework 30% 31% 34% 34% 22% 38% 27% 50% 

Effectively managing the change 72% 68% 66% 82% 75% 64% 75% 88% 

Focusing on the proc. trans. required for the parties to effectively work together 28% 24% 30% 30% 31% 25% 25% 25% 

Ensuring checks and balances are in place to validate go-live readiness 23% 26% 25% 25% 17% 29% 18% 44% 

Ensuring adequate involvement of the client business units in the transition 40% 36% 39% 41% 42% 38% 41% 31% 

Validating the contract scope of services 8% 10% 13% 7% 11% 9% 5% 0% 






% Transitions on Time/ Budget & w’ Required Functionality 

Almost all (>90%) 2% 3% 3% 2% 0% 4% 0% 0% 

Most (70%-90%) 11% 9% 8% 10% 9% 12% 10% 13% 

Many (40%-70%) 43% 37% 47% 39% 37% 51% 26% 47% 

Few (10%-40%) 41% 49% 40% 44% 54% 29% 60% 27% 

Almost none (90%) 12% 10% 11% 14% 20% 10% 10% 25% 

Frequently (70%-90%) 46% 53% 34% 50% 37% 40% 57% 50% 

Moderately (40%-70%) 33% 28% 42% 29% 37% 37% 29% 13% 

Sometimes (10%-40%) 9% 7% 11% 7% 6% 12% 5% 13% 

Rarely (





Contact us 

Stan Lepeak 

Global Research, 

KPMG Management Consulting 

Director 

T: +1 203 458 0677. 

E: slepeak@kpmg.com 

www.kpmg.com 

© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of 

the KPMG network of independent firms are affiliated with KPMG International. KPMG International 

provides no client services. No member firm has any authority to obligate or bind KPMG International 

or any other member firm third parties, nor does KPMG International have any such authority to 

obligate or bind any member firm. All rights reserved. 

The KPMG name, logo and “cutting through complexity” are registered trademarks of KPMG 

International Cooperative (“KPMG International”). 

The information contained herein is of a general nature and is not intended to address the 

circumstances of any particular individual or entity. Although we endeavour to provide accurate and 

timely information, there can be no guarantee that such information is accurate as of the date it is 

received or that it will continue to be accurate in the future. No one should act on such information 

without appropriate professional advice after a thorough examination of the particular situation. 

October 2012

KPMG Sourcing Advisory 3Q12 Global Pulse Survey - KPMG Institutes

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?