Outsourcing Comes of Age!

Outsourcing is becoming an essential business practice for firms across globe, says the PricewaterhouseCoopers (PwC) 2007 Global Outsourcing Survey. Titled Outsourcing Comes of Age: The Rise of Collaborative Partnering, the survey was conducted by PwC across 24 countries. 91% of the 66 businesses surveyed said that they would continue outsourcing. Interestingly, customers defined as “high collaborators” are more from emerging markets than others (66% vs. 52% for the total sample). This may reflect the power of social ties in the business cultures of Asia and continental Europe, as compared with large and medium mature markets comprising the UK, North America and Australia/New Zealand, said PricewaterhouseCoopers.

While outsourcing remains a critical element of the corporate strategic mix, success in today’s complex outsourcing marketplace is contingent on new dynamics, specifically the customer and service provider relationship, according to a PricewaterhouseCoopers’ Global Outsourcing study, Outsourcing Comes of Age: The Rise of Collaborative Partnering. The study explores a key issue raised by CEOs in PricewaterhouseCoopers’ Annual CEO Survey at Davos and reflects insights garnered from both outsourcing customers and providers representing 19 countries across several continents. In other findings, while information technology still accounts for a predominant part of outsourced activity, the scope is extending rapidly into inherently strategic areas such as production/delivery of core products/services and innovation/ R&D, both of which are expected to experience growth during the next five years. The expansion into innovation and R&D is particularly visible in the media/telecommunications/IT sector, likely due to competitive pressures to mine every potential source of new ideas and revenue streams.

The point to note is that today China and India—which together account for a third of world population—have evolved from closed to partially open economies shows that globalization seems to have reached a critical mass. It is likely to accelerate in the years to come. Globalization is an ongoing process that can only peak when citizens across the world enjoy its benefits without any barriers whatsoever. It has to be measured in terms of the collaborative progress that mankind experiences over a period of time. It can only peak when everybody on earth is clothed, fed, and sheltered. Disparate conditions and islands of poverty, hunger, thirst, darkness, etc., are red flags that keep it from peaking. Insourcing and outsourcing are not mutually dependent. As the article noted, the total number of jobs realized in the United States from insourcing is far less than those lost through outsourcing.