Willingness to Share Risks and Rewards is an Important Factor in Selection of Outsourcing Provider
TORONTO; March 28, 2003 – Despite economic uncertainty, a large number of Canadian executives rely on outsourcing as a way to drive change in their organizations and are more willing to partner and share the risks and rewards with providers of outsourcing services, according to a study released today by Accenture.
The study, entitled “Outsourcing: Shared Risks and Shared Rewards” and conducted for Accenture by International Data Corp. (IDC) Canada, entailed surveying more than 175 senior executives from a wide range of industries in Canada about their current and anticipated outsourcing practices.
Gaining access to skilled resources is one of the biggest benefits for businesses looking to outsource according to senior executives (42 percent). Yet, nearly all of the executives surveyed (approximately 95 percent) said they were looking to effect some kind of change within their organizations. For 34 percent of respondents outsourcing is an effective method for improving business processes.
The study also found a growing desire among executives for outsourcing providers to become business partners by sharing the risks and rewards within outsourcing arrangements. In fact, nearly two-thirds of respondents (64 percent) said they consider an outsourcing provider’s willingness to share risk when selecting an outsourcing partner.
Indeed, the study found that organizations are expanding beyond traditional IT outsourcing and outsourcing business processes closer to their core competencies. For example, 19 percent of the executives surveyed said they outsource some human resources processes, 18 percent said they outsource call centre or customer care activities, and 16 percent said they outsource some logistics and supply chain management processes. An even greater number of respondents said they are likely to outsource more of these business-related functions and processes in the future.
“We found that outsourcing continues to evolve to serve the needs of Canadian business,” said Jason Bremner, senior analyst, outsourcing services, IDC Canada. “While every organization has unique needs, there is undeniable evidence that outsourcing allows executives to focus on the core business while resolving skills shortages or resource problems, reducing costs, and fundamentally transforming how an organization thinks, acts and operates.”
The study also showed that day-to-day control over outsourced activities is no longer a significant issue for the majority of Canadian business. In fact, more than 80 percent of executives surveyed say they want to control strategy, business outcomes and service levels and are not concerned with leaving other daily business issues for the service provider.
Among other findings the study addressed were offshore outsourcing, the trends of outsourcing core business processes, and measuring the value of outsourcing.
About the Methodology
Accenture engaged IDC Canada Ltd. to conduct a study regarding Canadian executives’ outsourcing practices. IDC Canada conducted telephone interviews with 177 senior executives representing companies with annual revenues exceeding $100 million (CDN) from across Canada from December 2002 to January 2003. , IDC also referenced relevant secondary sources, including findings from other IDC research.
Accenture is the world’s leading management consulting and technology services company. Committed to delivering innovation, Accenture collaborates with its clients to help them realize their visions and create tangible value. With deep industry expertise, broad global resources and proven experience in consulting and outsourcing, Accenture can mobilize the right people, skills, alliances and technologies. With more than 75,000 people in 47 countries, the company generated net revenues of $11.6 billion for the fiscal year ended August 31, 2002. Its home page is www.accenture.com.
Full copies of the report are available upon request