Offshoring plans not slowed by global financial crisis

December 11th, 2008 - 5:26 pm ICT by ANI  

New Delhi, Dec 11 (ANI): American companies plan to continue to implement their current strategies for sourcing some functions offshore despite the current worldwide economic slump and the financial downturn may even accelerate such plans.
These are among the findings of a study into the effects of offshoring trends on American competitiveness, as part of ongoing research by the Center for International Business Education and Research’’s Offshoring Research Network (ORN) at The Fuqua School of Business at Duke University and PricewaterhouseCoopers.
The survey, designed to capture business managers” sentiments in the midst of the current global slump in financial markets and the presidential election, was conducted during the first two weeks of November and queried nearly 100 firms from the United States and Europe about their plans to source some job functions and business processes offshore.
The current survey on offshoring trends suggests that while cutting labour costs is the most significant factor driving offshoring decisions since the worldwide financial crisis gained momentum this quarter, many survey participants noted an increased urgency to improve efficiencies.
To cope with the slumping economy, companies plan to enhance efficiencies through business process redesign and by improving coordination and integration of offshoring processes.
Hari Rajagopalachari, Executive Director, PricewaterhouseCoopers said, “Redesigning business processes is not equivalent to end-to-end process re-engineering, which requires a significant commitment of resources and time. Our findings indicate companies can”t wait that long and can”t spare those resources; they want to improve their existing organisational capabilities for managing their offshoring strategies. This will require developing the discipline and the metrics to capture the benefits of existing and planned projects.”
As a result of the global economic crisis, renegotiating current contracts with service providers is emerging as a growing concern among companies. Forty percent of companies said they have pressured or plan to pressure providers to offer more favourable contract terms in order to trim costs. (ANI)

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