- Global survey finds majority of businesses still reluctant to outsource
New research from the Grant Thornton International Business Report (IBR) reveals thatthe majority of business leaders globally have no plans to outsource any business processesin the near future. While the cost savings and process efficiencies that outsourcing canprovide are widely recognised, many business leaders are worried about losing control of akey process.
The IBR found that 60% of global businesses have no immediate plans to outsource a
business process. Outsourcing is least prevalent in Southeast Asia (26%), Eastern Europe
(31%) and the Nordics (33%). By contrast more than half of businesses in southern Europe
(64%) and Latin America (51%) either currently use outsourcing providers or plan to. In
Vietnam, only 12% of businesses are open to outsourcing.
Ms Trinh Thi Tuyet Anh, Director of Outsourcing at Grant Thornton Vietnam, said:
"Outsourcing is a helpful tool in restructuring manpower; freeing resources from
administration and re-allocating them to operations. Accordingly, the enterprise can benefit
from lower payroll costs without sacrificing output capacity. Senior leaders of these lean,
dynamic organisations also have more time to on the strategic priorities for their business."
Among those businesses which currently (or plan to) outsource back office services, 57%
globally cited improving efficiencies, marginally ahead of reducing cost (55%), as the key
drivers; in Asia - Pacific, both figures are 37%. Of those businesses with no plans to
outsource, the requirements to find cost savings (41%) or process efficiencies (33%) are the
main reasons that would encourage them to consider it.
Business leaders in the developing economies are more likely to use outsourcing to access
expertise; 46% of BRIC businesses cite better access to expertise as an outsourcing driver,
compared with 39% in the G7, and 45% cite mitigating risk through using specialists, versus
35% across the G7.
Ms Tuyet Anh continued: " The results clearly show that outsourcing is worthy of serious
consideration. Aside from driving efficiencies and reducing costs, outsourcing can allow
business to tap into skills and expertise offered by their providers that might not necessarily
be as readily available in the local labour market”.