Research Shows Few Embrace Outsourcing As Strategic Imperative

Compiled ByJill Jusko A majority of businesses employ outsourcing as a means to cut costs, but few are embracing it as a strategic business imperative, shows new research by global consulting firm Accenture. The survey of 150 senior executives from major companies in the automotive, consumer goods, retail, industrial equipment and transportation industries indicates that a large majority (87%) outsource at least one aspect of their business. However, fully two-thirds say there are no plans to expand that outsourcing to other business areas, at least in the next 18 months. "There are hurdles that must be overcome before many companies embrace outsourcing more strategically," explains Greg Caster, a partner in Accenture's Products Operating Group. "While executives have long realized that outsourcing basic business activities can enhance operational efficiency, only a select few are ready to use outsourcing as a tool to drive business growth." The senior executives surveyed offered myriad reasons for not expanding their use of outsourcing, led by nearly one-half (48%) who cited the fear of losing operational control. Other reasons given include cultural barriers in the organization (19%), costs (14%), long-term dependency on an external organization (11%) and diminished vendor relationships and collaboration capabilities (6%).