A new report predicts global outsourcing will grow at a compound annual growth rate of 6 percent a year through 2008, with finance and accounting and sales/marketing jobs experiencing the strongest increases.
Kennedy Information Inc., which produces multiple management consulting publications, assessed 15 market sectors, and determined that finance and accounting and sales/marketing functions would grow at or near double-digit rates. The report, “The Global Outsourcing Marketplace: Key Data, Forecasts & Trends,” forecasts growth rates for traditional IT outsourcing, business process outsourcing and transaction processing for 15 industries.
"Businesses in all industry segments are finding that limited internal resources make outsourcing an attractive, cost-effective and prudent option, allowing them to focus on their core competencies," said William P. DiMartini, Senior Vice President at SunGard Availability Services, in a prepared statement. "SunGard continues to see a growing market for outsourcing selected information technology services, both in Europe, where outsourcing of back-up services has grown, and in North America, where both security and healthcare markets are demonstrating continued advances."
Phil Bloodworth, a partner in PricewaterhouseCoopers' advisory performance-improvement practice, however, said in an interview with Business Week that outsourcing is not always cheaper than doing the functions in-house. “Business owners tend to underestimate the related costs of outsourcing, and they underestimate what it takes to manage,” he said. “You can't flip a switch with outsourcing and have everything be hunky-dory - and especially not if you're outsourcing overseas. Also, you can never outsource total responsibility for a company function or process.”
He also said that small-business owners should do an honest assessment of the costs and benefits of doing a process in-house. “Understand what's driving your need to outsource. Do you want to provide better service? Then don't be shocked if it costs you more - not less. Sit back and assess what outsourcing will really be like.”
Small-business owners should also give some hard thought to whether they are ready to let go of control. “Small businesses do a lot of great things. Most of them have a good handle on their finances and their operations. A lot of small-business owners are very hands-on - they like to know what's going on in their companies. Do you really want to send part of that business 10,000 miles away?”