Capgemini News

Outsourcing Survey Results Announced

Companies Look Beyond Cost Reduction When Choosing An Outsourcing Partner According To Capgemini/IDC Bi-Annual Survey

18 April 2005

April 18-19, 2005 - New York, NY
The results of a BPO outsourcing survey conducted by IDC, the premier global market intelligence and advisory firm in the information technology and telecommunications industries, and Capgemini U.S. LLC, a global leader in consulting, technology and outsourcing, found that a company’s ability to focus on its core competencies is the number one driver in deciding to pursue a BPO outsourcing strategy, ahead of the need to save money, which was ranked most important a year ago. According to the Capgemini/IDC survey of almost 200 participants attending the IDC Outsourcing Forum East this week, IT outsourcing ranked number one as having the biggest potential upside to companies over the next three to five years, followed by customer care and F&A outsourcing. Consistent with last year’s findings, IT outsourcing continues to be the main service outsourced (38.3%) this year.

What industry is your organization’s primary business?

Service provider/vendor (45.2%)
Service industries (telecom, facilities, etc.) (16.1%)
Product industries (energy, automotive, retail, manufacturing, etc.) (9.7%)
Financial services (7.4%)
Health/Life Sciences (1.6%)

To date, what has your organization already outsourced to external service providers?

 

IT (38.3%)
Customer Care (18.7%)
Human Resources (17.8%)
Supply Chain/Procurement (13.1%)
Finance & Accounting (F&A) (12.1%)

Is your organization planning to outsource any of the following functions over the next year?

 

IT (38.9%)
Human Resources (20.8%)
Customer Care (18.1%)
Finance & Accounting (F&A) (12.5%)
Supply Chain/Procurement (9.7%)

What is the most important selection criteria for your organization when comparing BPO providers?

 

Ability to offer transformational services in addition to operate capability (50%)
Lowest cost solution (15.6%)
Company that can provide global coverage for onshore & nearshore operations (15.6%)
Company with economic stability, not a start-up (10.9%)
Point solutions for each process (e.g. Accounts Payable with one provider, Accounts Receivable with another) (7.8%)

Rank the following drivers in order of importance (1 the highest, 6 the lowest) for a company deciding to use BPO in their corporate strategy? (Average ranking listed)

 

Focus on its core competencies (2.84)
Save money (2.89)
Deliver internal value & shareholder value through competitive advantage (2.89)
Drive process visibility, efficiency and integration (3.43)
Implementation of best practices (3.48)
Accessing or enhancing technology environment (4.06)

What has been the greatest internal challenge your company has faced when exploring or considering BPO?

 

Inadequate change management strategy (33.3%)
Lack of internal metrics/goals (20.6%)
Cultural issues (between employees and BPO) (14.3%)
Managements resistance (14.3%)
No internal challenges (12.7%)
Employee communications (4.8%)

What are the most important legal issues concerning BPO today (circle all that apply)?

 

Governance procedures (35.9%)
Intellectual property rights (25%)
Business Continuity (21.7%)
Termination rights (17.4%)

What impact has the Sarbanes-Oxley regulations had on your organization’s finance and accounting (F&A) BPO strategy?

 

No impact one way or the other (60.3%)
Major positive impact (embraced full F&A outsourcing to aid in compliance) (15.5%)
Minor positive impact (utilize some F&A outsourcing to aid in compliance) (10.3%)
Minor negative impact (considered but decided against any F&A outsourcing) (10.3%)
Major negative impact (will not consider F&A outsourcing as a compliance tool) (3.4%)

What is the most important F&A capability of a BPO service provider?

 

Ability to ensure process controls are implemented and enforced (45.6%)
Ability to transform processes (38.6%)
Ability to provide low cost transaction processing (14%)
Reporting (Statutory and/or Management) (1.8%)

Please rank in order of importance (1 is highest, 7 is lowest) the outsourcing strategies that have the biggest potential upside to your organization over the next 3-5 years? (Average ranking listed)

 

IT outsourcing (2.38)
Customer care outsourcing (2.96)
F&A outsourcing (3.08)
HR outsourcing (3.08)
Global procurement (4.0)
Engineering outsourcing (4.0)
Product development (4.06)

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