Majority of businesses still reluctant to outsource: Thornton

About 60 per cent of businesses around the world have no immediate plans to outsource work, an option that has raised concerns about destroying domestic jobs, a report says.
A survey by Grant Thornton International Business Report (IBR) shows that the majority of business leaders globally have no plans to outsource in the near future as they are worried about losing control of a key process.
Obstacles to outsourcing include unwillingness to lose control of a key process, cited by 44 per cent of respondents opposed to off-shoring of work, followed by the high cost of implementation (32 per cent), while 27 per cent believe it is too complex or risky to contract out services.

Outsourcing is least prevalent in southeast Asia (26 per cent), eastern Europe (31 per cent) and the Nordics (33 per cent).
In contrast, more than half of the businesses in southern Europe (64 per cent) and Latin America (51 per cent) either currently use outsourcing providers or plan to do so.
In India, 38 per cent of businesses are open to outsourcing, according to the report, which covered 3,300 business leaders in 45 economies.

The key drivers to outsourcing include improving efficiencies cited by 57 per cent of respondents, followed by cost reduction (55 per cent), better access to expertise (45 per cent) and ensuring business continuity (45 per cent).

Among businesses that currently outsource back-office services or plan to do so, 57 per cent globally cited improving efficiencies, marginally ahead of reducing cost (55 per cent), as the key drivers, the report said.
About 46 per cent of BRIC businesses cited better access to expertise as an outsourcing driver, compared with 39 per cent in the G7, and 45 per cent cited mitigating risk through using specialists, versus 35 per cent across the G7.
"The results clearly show that outsourcing is worthy of serious consideration," Grant Thornton India LLP Partner Vinamra Shastri said.
Shastri said outsourcing can help high-growth businesses to manage their workload and focus on priorities, boosting productivity and results and providing them with a competitive edge.