Outsourcing still not a strategy, survey finds

An overwhelming majority of businesses are using outsourcing as a cost-cutting tactic, but few companies have embraced it as a strategic business imperative, according to Accenture, a research and consulting firm. Accenture said its research is based on a survey of 150 senior executives at Fortune 1000 companies in the automotive, consumer goods, retail, industrial equipment and transportation industries.

An overwhelming majority of businesses are using outsourcing as a cost-cutting tactic, but few companies have embraced it as a strategic business imperative, according to Accenture, a research and consulting firm.

Accenture said its research is based on a survey of 150 senior executives at Fortune 1000 companies in the automotive, consumer goods, retail, industrial equipment and transportation industries. Participants were asked about current and future outsourcing initiatives, barriers to more effective use of outsourcing, and how quickly they expect a return on these investments.

Nearly 87% of respondents said their companies outsource at least one aspect of their business. For instance, 27% outsource information technology, 27% outsource logistics/distribution, and 25% outsource customer service/technical support. Two-thirds of respondents, however, reported no plans to expand their outsourcing to other business areas within the next 18 months.

An additional factor may be return on investment (ROI) and timeframe. One-fourth of respondents expected to see ROI within the first six months, and 42% expected it within seven to 12 months.

Almost 48% of the executives surveyed said that the fear of a loss of operational control was the most significant barrier to expanding their use of outsourcing. Other impediments cited included cultural barriers in the organization (19%), costs (14%) and long-term dependency on an external organization (11%).

Just 6% cited diminished vendor relationships and collaboration capabilities as an impediment to more aggressive use of outsourcing. Of the executives who plan to increase outsourcing within the next 18 months, 13% said they would consider outsourcing human resources and 13% said they would consider outsourcing their IT operations.

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