Monday, June 06, 2005

Outsourcing's Benefits--More than money

Offshore Outsourcing has emerged as a cost-cutting measure, but it's increasingly viewed as a strategic planning and business tool. According to a survey of more than 800 executives in the United States and Europe, cost savings are still a key outsourcing benefit, but the additional business controls generated by outsourcing are driving the trend to external providers. Over half had recorded perceptible improvements in the first six months of outsourcing. The most frequently cited improvements included better ability to plan, higher levels of operational reliability, and more rapid implementation of new strategies and initiatives.
The trend toward deriving broader business benefits from outsourcing stems from both increased maturity and experience with the process and, the spread of outsourcing beyond IT departments.
While IT services continue to be the focus of the leading outsourced function, more companies are turning to outside sources for supply-chain operations, learning and training, human resources, accounting and financial services as well as customer relationship management. Supply-chain management was seen as the most rapidly rising area for outsourcing.
The effect of moving outsourcing into multiple business process has brought a wider range of business experience and insight to bear.
The broader view of offshore outsourcing benefits should be matched by broader, more flexible and more constantly monitored arrangements with outsourcers.