Outsourcing to grow, says KPMG survey

Nearly 90 per cent companies from 32 countries maintain that they will continue to outsource or increase their current outsourcing levels. However, a large number of businesses around the world are unable to quantify accurately the benefits their outsourcing arrangements would bring in for them.

These were among the main findings of a just-released KPMG Global Survey at the Nasscom summit here today that covered 650 companies across the world with nearly 50 per cent of the respondents having a turnover of over $1 billion.

The report notes that the majority of the respondents believe sourcing improves their financial performance, shareholder value and competitiveness. But,13 per cent respondents "agree that as many as half of all the outsourcing deals fail".

However, companies do acknowledge the positive role played by their respective sourcing providers in the overall organisational success. Egidio Zarrella, Global Partner-in-Charge, IT Advisory, KPMG, said, "Personally, I'm glad to hear that businesses feel their sourcing arrangements are working as it was all too easy in outsourcing's formative years to dismiss it as something that was never properly delivered. However, businesses have to be able to substantiate the benefits outsourcing delivers. Simply going on a gut feel or anecdotal evidence is not enough."

Firms are now looking at sourcing to provide tangible benefits.

The evolution of sourcing has created huge advantages for businesses. The KPMG survey examined the global sourcing marketplace focusing on the current trends in the design, development and management of sourcing initiatives.

Pradeep Udhas, Global Partner in-charge, Sourcing Advisory, KPMG, said "Sourcing is as important as selling for organisations, as it not only impacts profitability, but also makes it much more nimble in today's dynamic environment."