Outsourcing Blog

According to a study by global research firm the Economist Intelligence Unit (EIU), global offshoring of IT services, manufacturing, and other business functions will continue to grow over the next three years. The study projects that countries in Eastern Europe will strive hard to out do India and China as the leading offshore locations.

The study reveals that India ranks as the most attractive offshore destination, followed by China and Czech Republic. It found that India will continue to dominate the offshoring market with its low labor costs, developed legal system, and English-speaking graduates. The report adds that China’s lack of English skills will keep it behind India.

However, according to EIU, Eastern European countries will leverage their attractive regulatory environments, and close proximity and cultural ties to Europe, to take more offshoring business.

The EIU report surveyed 500 senior executives, 57 percent of whom believed that outsourcing and offshoring were critical in reshaping the global market.

A survey conducted by Accenture reveals that companies outsourcing their finance functions achieve greater control over their governance and compliance. Accenture commissioned the survey of more than 200 executives to determine whether loss of control remained an issue for executives with more stringent compliance standards in place.

Forty-three percent of the respondents, who had already outsourced a finance process, said that outsourcing had improved the quality of governance and compliance at their organizations. Additionally, 44 percent of the same group believes that outsourcing did not have any adverse impact on the quality of governance and compliance at their organizations.

Similarly, 73 percent of respondents who had already outsourced a finance process reported that outsourcing increases the rigor of business processes. They believe that because outsourced processes are better defined and documented, it leads to greater clarity and accuracy of financial figures.

A survey conducted by IDC suggests that the pressure to reduce costs is forcing medium-sized companies to outsource their IT operations. The survey found that 48 percent of firms have already outsourced their desktops and 39 percent have outsourced their data center.

Seventy-seven percent of the respondents stated cost savings to be the key reason for outsourcing operations.

The survey also notes that while the mid-size companies are increasingly looking at IT outsourcing, they are still apprehensive of full BPO. Further, 60 percent respondents believe that they would only pursue BPO, if there were guaranteed cost savings of at least 10 percent.