PracticeConsultingOutsourcing hits choppy waters

Outsourcing hits choppy waters

The downturn in the global economy has resulted in a slowdown in outsourcing, according to the head of the Outsourcing Research Council.

Speaking Tuesday from Danbury, Connecticut via videoconference to finance leaders at the CFO conference, Michael Corbett said the current economic climate had created a ‘choppy surface for outsourcing.’

He explained that, while some executives who were hesitant about outsourcing were pushed into it by market pressures, other companies were ‘reluctant to move forward boldly.’

‘[The downturn] is moving the market forward but creating choppy water,’ said Corbett.

But he also said that a large number of successful international companies were outsourcing many of their non-core competences. One example he gave was BP, which has outsourced finance and accounting to Accenture and PricewaterhouseCoopers respectively.

Preliminary findings from the ORC found that traditional outsourcing areas, which continue to be strong include payroll and tax. Areas that are currently growing, but were not traditionally outsourced, include internal audit, accounts payable and receiveable and travel expenses.

Corbett said in the difficult economic climate, outsourcing was seen as one of many management tools. He added that it had to be viewed as a long term relationship, and for the tool to be efficient, it had to be results-oriented.

Links

Finance directors to boost outsourcing

Consultancy – US downturn begins to bite

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