Executive Summary

Global sourcing is a well-established phenomenon across most industry verticals. Companies in the manufacturing vertical have also embraced global sourcing to a significant extent. In doing so, companies have adopted multiple sourcing models (Global In-house Center (GIC), service provider, and hybrid).

Within the manufacturing vertical, the service provider model is primarily used for delivering technology services, and the GIC model is preferred among business process services. Some manufacturing companies use a hybrid sourcing model (i.e., a mix of GIC and service providers) for business process services. Most companies in this vertical set out on their GIC journey to generate cost savings and to ensure reliable service delivery. By moving transactional work to GICs, companies achieve the initial set of benefits. However, enterprises are now looking for greater added value from their GICs.

Specifically, enterprises expect GICs to step up in three priority areas: driving process efficiencies and standardization, delivering complex services, and creating revenue impact. Delivering on these priorities requires a significant increase in the GICs’ capabilities. At the same time, many of these priorities align well with the core strengths of service providers (e.g., efficiency and productivity improvements).

This alignment presents a strong case for GIC and service provider partnerships to create value for the enterprise. As enterprises mature in their use of sourcing models and strive to generate additional value, we expect GIC–service provider partnerships to significantly increase in the near future.

This report covers the following topics:

• Current state of Global sourcing adoption in the manufacturing vertical for business process services
• Enterprises’ expectations for GICs and their performance
• Current state of GIC maturity and future priorities of GICs
• Forms of GIC-service provider partnerships to accelerate value delivery for the enterprise