April 25, 2005
Outsourcing: Losing its Luster Amongst US Companies
A recent report by Deloitte Consulting indicates that an astounding 70% of surveyed companies had a "negative experience" with outsourcing. Like similar surveys released in recent months, this survey seems to indicate that US companies are no longer heading full tilt into outsourcing projects like they once were. Rather, most firms are now strategically weighing the costs/benefits associated with each individual project and are attempting to make more concrete and long-term relationships with the outsourcing firm. This will have serious consequences for large indian outsourcing firms who are already indicating their own predictions about the abatement of interest in Indian outsourcing by diversifying their holdings to outside services firms in other nations. The Economic Times Reports:
However, instead of simplifying operations, many companies have found that outsourcing activities can introduce unexpected complexity, add cost and friction into the value chain, and require more senior management attention and deeper management skills than anticipated, according to the study.
Read More: Outsourcing no more on US' hot list
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