US Firms Happy With BPO Quality, To Move More Operations: Study

New York, Feb 6 | Updated: Feb 7 2004, 05:30am hrs
Despite the challenges to moving IT, business process and contact centre services to India, China and other overseas locations, American companies are satisfied with their offshore outsourcing initiatives and plan to expand such operations, a new study shows.

Companies with significant outsourcing experience have moved or are moving toward a strategy of multiple locations, multiple vendors and a judicious blend of both in-sourced and outsourced models to minimise risks and maximise flexibility, says the study.

Conducted jointly by the Weissman Center for International Business at Baruch College and the Paaras group, the just released study is based on comprehensive surveys and in-depth interviews with 38 global companies, mostly in North America.

It has found that offshore outsourcing continued unabated last years especially as companies gained confidence in their ability to manage offshore operations.

It has also found that outsourcing delivered significant benefits to pioneers as well as new comers last year and the companies were able to improve their quality while cutting costs. Despite protectionist backlash in the US and Europe, the offshoring wave has turned into a Tsunami - an inevitable outcome of globalisation and economic integration, said Suresh Gupta, managing partner, the Paaras group.

In fact, the leaders in offshoring are no longer focused solely on offshore opportunities. They have graduated to a broader model of global or smart sourcing, which combines multi-location, multi-vendor and both in-house as well as outsourced solutions for IT and business processing, Mr Gupta said.

As many as 89 per cent of companies moving IT, business processes and contact centre work offshore reported that they are satisfied with their initiatives. They identified knowledge transfer (76 per cent) and internal commitment (76 per cent) as the major challenges in launching offshore initiatives. These issues, they said, need to be addressed early on to ensure success.

About 94 per cent companies cited cost savings as their main goal in moving operations offshore. As many 63 per cent identified accessing skilled resources and 51 per cent improving quality among their reasons.