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Target Operating Model – The Structure of a Modern Delivery Organization

A sustainable Business Process Outsourcing (BPO) model combines three elements:

  • Internal Global Shared Service Center (GSC)

  • Nearshore delivery

  • Offshore delivery

The internal center ensures:

  • governance and control

  • knowledge retained within the company

  • rapid response to complex requirements

External providers deliver:

  • scalability

  • cost flexibility

  • access to specialized capabilities

Outsourcing – Strategy, design and implementation

Outsourcing is rarely an isolated initiative.

When Outsourcing Becomes Strategic

In most cases, outsourcing emerges in the context of broader transformations:

  • Carve-outs

  • Post-merger integrations

  • International expansion

  • Cost and efficiency programs

  • Establishment of shared service structures

In corporate environments one key question arises:

Which capabilities belong to the core of the company – and which do not?

What truly makes the company unique for its customers?

Decisions driven purely by cost considerations often create significant problems.

Successful models combine internal capabilities with external capacity.

The Hybrid Model

In the early years of Business Process Outsourcing many organizations had to go through painful learning experiences.

Today we know that a three-layer model avoids many of the problems seen during the outsourcing boom of the 1990s, particularly in financial services.

1. Core Capabilities (inside the company)

Strategically critical competencies remain internal.

The company must retain the ability to control both processes and the underlying data, including:

  • process design, consistency and efficiency

  • governance

  • complex or company-specific issues

  • customer-specific services and expertise

  • product know-how and development

  • strategy and marketing

These functions ensure speed, innovation, quality and independence.

2. Shared Service Centers (internal)

Standardized processes are consolidated in internal shared service structures, typically including:

  • Accounting (AP / AR)

  • HR administration

  • IT operations

  • Procurement (P2P)

  • Master Data Management (MDM)

The objective is efficiency through scale and standardization.

3. External Providers (Nearshore / Offshore)

Scalable services can be sourced externally, for example:

  • Accounting services

  • HR services

  • IT service desk

  • Software development

  • Engineering services

  • Data processing

Historically many outsourcing programs focused on India. Banks and insurance companies were among the first adopters, followed by telecommunications providers.

Major providers include:

  • EXL Service

  • Firstsource Solutions

  • HCL Technologies

  • Hinduja Global Solutions

  • Infosys

  • Mphasis

  • Genpact

  • Tata Consultancy Services (TCS)

  • Wipro

These companies specialize in large-scale business process delivery.

Nearshore Delivery Centers for European Clients

For companies in the DACH region, the most established nearshore hubs are:

  • Poland (Kraków and Warsaw)

  • Hungary (Budapest)

Romania – particularly Cluj and Bucharest – has developed into the second most important location in Central and Eastern Europe.

Large consulting firms have also built global delivery centers:

  • Accenture

  • Capgemini

  • IBM

Many of their European delivery hubs are located in Poland.

Provider Poland Rumania Czech Hungary Bulgaria Spain
EXL ✓ ✓ ✓
Genpact ✓ ✓✓ ✓ ✓ ✓
Infosys BPM ✓✓ ✓
TCS - Tata ✓ ✓ ✓ ✓✓ ✓
Wipro ✓✓ ✓ ✓

Implementation Approach

Phase 1: Analysis and Target Model

  • assessment of processes

  • identification of standardization potential

  • definition of the future operating model

  • sourcing model design

  • make-or-buy decisions

  • location strategy

  • request for proposal (RFP)

  • evaluation of providers

  • contract negotiation

  • knowledge transfer

  • migration of processes

  • operational stabilization

  • vendor management

  • performance monitoring

  • ongoing optimization

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When Should You Call Me?

When the stakes are high and someone is needed who takes responsibility — not just provides recommendations.

Book a slot for a call 

Clients bring me and my partners in when leadership and execution matter, not just consulting.

Typical situations include:

  • critical transformation or IT programs that have lost control

  • declining trust in internal IT organizations or external partners

  • entering new strategic territory where the direction is clear but the path is not

  • major technology decisions that must not rely solely on vendor narratives

Experience from International Outsourcing Programs

My experience with international outsourcing models dates back to the early 2000s.

A first major program was implemented in 2002 in the engineering sector, initially focusing on:

  • engineering services

  • product development

Later the model expanded to classic business processes:

  • Finance

  • HR

  • IT services

These programs included both offshore models with India and nearshore delivery structures in Europe.

The key lesson from these initiatives:

Successful outsourcing is not about maximizing externalization, but about achieving the right balance between internal capabilities and external resources.

Typical Use Cases

Organizations typically request support in situations such as:

  • Post-merger integrations

  • Carve-outs

  • Establishing shared service centers

  • Cost optimization programs

  • Internationalization of service delivery