Whilst many multinational companies have either outsourced or off-shored back office, development or support functions to India and Eastern European countries in recent years, many Irish based companies have outsourced to domestic service providers. Why?
Cost is always a factor in the outsourcing decision, but not always the dominant factor. Whilst Irish companies have secured significant cost reductions from domestic providers, they have also secured excellent service from a technical and customer contact perspective, good cultural fit and best-in-class IT services.
The growth in outsourcing has been significant in recent years. According to TPI, the global outsourcing market grew by 37% in 2004 to $163bn. The value of €1bn plus deals declined with companies outsourcing more discrete services to niche providers. Business Process Outsourcing (BPO) contracts, as opposed to IT only deals, grew by 50%. Indeed, the results of a recent survey by PricewaterhouseCoopers in Ireland indicate that 68% of respondents are already outsourcing with almost 50% planning to outsource additional services. Large outsourcing deals have been announced in Ireland in the last year across the financial, media and telco sectors. However, although the benefits of outsourcing can be substantial, the risk of failure is still high due mainly to poorly designed and documented arrangements between buyers and suppliers.
At PricewaterhouseCoopers, we:
- Act as independent advisors on all issues affecting the outsourcing of services.
- Focus on assessing the strategic fit and driving out benefits for the company.
- Advise buyers of outsourcing services on the planning, design and management of successful outsourcing arrangements.
What drives the outsourcing decision:
