Tuesday, September 06, 2005

Outsourcing rides out the storm

From :vnunet

Despite recent offshoring project failures, it appears that finance directors seeking more efficiencies could still provide another major boost for the outsourcing industry.
Concerns were raised over the security breach at an Indian call centre, which saw customer data offered for sale. But new figures reveal that outsourcing strategies are continuing to grow in popularity.
A survey of 120 executives across the globe by Accenture has found that 78% of respondents identified improving operational efficiency as the top challenge facing the finance department. But only 15% currently transact the majority of their accounts payable and receivables functions on an automated basis.
Nearly one-half of the executives polled (40%) cited a lack of awareness within their organisation about how IT could improve transactional processing.
‘The findings show that finance executives are challenged to improve efficiency and reduce time and cost to process transactions, yet they are not widely embracing technology to achieve change,’ said Anoop Sagoo, an Accenture partner.
The boom in offshore outsourcing is set to continue, with over three-quarters of large companies increasing their activities, according to research by outsourcing consultants company TPI.
The study, based on a survey of 100 senior UK executives, revealed that 81% planned to increase offshore outsourcing over the next two to three years, while only 4% expected to see operations dip.
Duncan Aitchison, managing director of outsourcing consultancy TPI, said: ‘Our survey results clearly indicate that there is very little disillusionment with offshore outsourcing. However, there is a general shift towards more sophisticated sourcing strategies as the global sourcing market comes of age.’
The research also showed that many companies, while intending to grow offshore operations, are readjusting activities they base offshore. Businesses are increasingly taking a global view, separating out processes and deciding whether they would be best based offshore, nearshore or onshore.
But a survey by the National Outsourcing Association has warned that growing compliance and data protection rules could exacerbate problems. It revealed that poorly negotiated contracts and rushed implementation have been the main reasons for project failures. But these problems could be heightened, as growing compliance and data protection legislation becomes a core part of the offshoring environment.

The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and software development outsourcing.