Friday, July 29, 2005

Outsourcing continues to Grow

RICK ROTHACKER ,Staff Writer of writes that "Outsourcing is still growing ".He proved his statement by giving evidences from following studies:
More than half of financial services companies outsource part of their operations, while 26 percent more plan to do so in the next three years, according to a new survey. Only one in five doesn't plan to outsource.
The study, the latest evidence of a growing financial industry movement, also found 20 percent of companies send work overseas, while a quarter plan to in the next three years. Overseas outsourcing, or offshoring, has raised growing concerns about the loss of U.S. white-collar jobs.
In the study released last week, Electronic Data Systems Corp. and The Economist Group, publisher of The Economist magazine, surveyed 300 industry executives worldwide. Plano, Texas-based EDS provides outsourcing and offshoring services to financial and other companies.
Charlotte, the nation's No. 2 banking center, is especially vulnerable to offshoring job losses because financial services is the heaviest user of foreign outsourcing.
Wachovia Corp. last month said it plans to cut an undisclosed number of jobs by sending technology work to India, starting this year. The move is part of a broader effort to trim annual expenses by $1 billion by 2007. Bank of America Corp. has expanded an Indian subsidiary.
By financial industry segment, retail banking was the most active user of outsourcing at 63 percent, according to the survey. Investment banking was among the least likely at 48 percent, but 38 percent of respondents planned to outsource in the next three years.
The most important factor in outsourcing? Costs, according to the survey.
300 Executives Surveyed
Here are the results of an EDS survey asking financial services companies whether they outsource or plan to.
• 52 percent: Currently outsource.
• 14 percent: Plan to in the next year.
• 12 percent: Plan to in the next three years.
• 21 percent: No plans.

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