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Advantages of outsourcing

80% of respondents said they are committed to outsourcing

It may have started as a way to cut costs, but outsourcing is now embraced by executives for another reason . it gives them more control over business outcomes.

In a recent Accenture survey of more than 800 health, manufacturing, retail and travel executives in the US and Europe, 86% said outsourcing gives them more control over business results in a variety of critical areas, the most important being the ability to plan. While cost-cutting is among these key areas, the executives also reported equal levels of control in reliability, cost variability improvements and effective implementation of ideas.

Furthermore, 55% of respondents said outsourcing allows their companies to implement strategies and change at a faster and more controlled rate. And more than half (57%) the executives surveyed said they experience control gains within the first eight months of an outsourcing agreement.

"Industry leaders are beginning to view outsourcing as a prescription for change versus an antidote to rising costs," says John Rollins, a partner in Accenture's products operating group.

As for the overall prevalence of outsourcing, more than 80% of respondents said they are committed to outsourcing at least one business function permanently. Only 14% plan to use outsourcing on a temporary basis to improve key functions and return them in-house once efficiencies are realized.

Which functions and processes are outsourced most frequently? Information technology is the most common at 43%, followed by supply chain (36%), learning/training (31%), human resources (25%), finance and accounting (21%) and customer relationship management (13%).

Article taken from
January-February 2004 . PRINT EDITION
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