SOURCE: International Association of Outsourcing Professionals

International Association of Outsourcing Professionals

April 15, 2010 14:00 ET

Outsourcing Being Used More Strategically for Higher Knowledge Processes, IAOP Survey Shows

Industry Rapidly Adopting New Technologies and Growing

POUGHKEEPSIE, NY--(Marketwire - April 15, 2010) -  Outsourcing has established itself as a strategic management practice that leading companies around the globe are increasingly using for high-value, knowledge-based processes, according to survey results from the International Association of Outsourcing Professionals (IAOP). 

Released today, the results of the IAOP global membership surveys conducted with support from Accenture over the past 18 months show outsourcing is a thriving competitive industry that is being used strategically with more senior C-suite decision making.

The industry is also rapidly adopting technology such as cloud computing and Software as a Service (SaaS), show the findings of the series of global surveys of the association's 100,000 members and affiliates representing outsourcing customers, providers and advisors.

"Increasingly, companies are outsourcing to do more than cut costs but to add value, increase business flexibility and prepare for future growth," said IAOP Chairman Michael Corbett. "Companies that are using outsourcing are poised to emerge from the current economic crisis stronger." 

The estimated $6 trillion* global outsourcing industry expects to continue to grow. A January 2010 poll of members showed 56 percent of respondents planned to increase outsourcing activities in the future, up from 47 percent who answered a September 2009 poll.

"Outsourcing remains a strong option for businesses facing unprecedented market conditions and the imperative to change both quickly and dramatically," said Kevin Campbell, group chief executive, technology, at Accenture. "Most companies pursue outsourcing to not only realize immediate and sustained cost savings but to implement solutions to improve cash flow, achieve real business outcomes and to drive topline growth."

Among the key findings:

  • Outsourcing Becomes More Strategic: Strategic issues are playing an important role in outsourcing decisions at most companies. In January, about 50 percent of respondents indicated that greater business flexibility and preparing the company for future growth have become more important reasons for them to use outsourcing.

  • C-Suite Driving Decisions: Outsourcing decisions are being made at higher senior executive levels, the results show. Two-thirds of respondents indicated in January 2010 that senior executives were increasingly involved in outsourcing versus only 13 percent who said that senior executives were less involved.

  • Smarter, Skilled Profession: Knowledge-based outsourcing is becoming more important to companies and the industry is filling this demand. In both the fall of 2009 and January 2010, 40-plus percent of respondents indicated that the outsourcing at their organizations was increasingly focused on knowledge-based activities compared to less than 30 percent who said they were increasing the outsourcing of lower-skill level positions.

  • Rapid Technology Adoption: Cloud computing and SaaS are being examined by 88 percent of outsourcing customers surveyed in January and 66 percent of providers are exploring these technologies for the delivery of services to their customers. 

  • Bundling Services: This January, 45 percent of survey participants stated that their company was more focused on bundling services with fewer outsourcing services providers versus 18 percent who indicated that they were doing more multi-sourcing. 

The report is available at IAOP's Knowledge Center, http://www.iaop.org/firmbuilder.

*IAOP estimate

About IAOP
The International Association of Outsourcing Professionals (IAOP) is the global, standard-setting organization and advocate for the outsourcing profession. With more than 100,000 members and affiliates worldwide, IAOP helps companies increase their outsourcing success rate, improve their outsourcing ROI, and expand the opportunities for outsourcing across their businesses. www.iaop.org.

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