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Friday, September 7, 2007

Globally, Outsourcing on the rise

Outsourcing is becoming an essential business practice for companies across the globe, says 2007 Global Outsourcing Survey conducted by PricewaterhouseCoopers (PwC) across 24 countries. Outsourcing is in fact an emerging issue for many businesses and has the potential to deliver value well beyond cost savings by opening access to talent and capabilities while maximising business model flexibility.

Titled ‘Outsourcing Comes of Age: The Rise of Collaborative Partnering,’ the survey says that 91 per cent of the 66 businesses surveyed would continue to outsource. Emerging and other economies like India, Bahrain, Belgium, Brazil, China, Germany, Italy, Japan, Kuwait, Mexico, Russia, South Africa, Sweden and the UAE were covered in the survey. Customer call centres (56 per cent), ore products & services (54 per cent) and logistics /distribution (53 per cent) are the major areas to outsource, according to businesses in the emerging markets.

As per the survey, top reasons firms outsource are to:
- Lower costs (important or very important for 76% of respondents)
- Gain access to talent (70%)
- Farm out activities that others can do better (63%)
- Increase business model flexibility (56%)

Other reasons are also important:
- Improving customer relationships (42%)
- Developing new products or services/ market segment expansion (37% each)
- Geographic expansion (33%)

Hot spots for growth:
- Large mature markets: for procurement services (53% with expansion plans),
- Customer call centres (45%) and notably,
- Finance/ accounting (44%).

Companies identified as ‘expert outsourcers’ (those who met their business plan and goals completely) feel that their vendors or service providers are good collaborators. About 81 per cent of these respondents stated that they have honest and transparent dealings with their outsourcing vendors. Source: PriceWaterhouseCoopers. {Image has been sourced from the Internet}

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