Offshoring rollback?
Unmet expectations have urged major companies to rethink their strategy on outsourcing functions, mostly in the field of IT. A Deloitte Consulting survey served as basis for this report by the Financial Times.
A huge three quarters of the survey respondents encountered problems with their outsourced projects while a quarter have reported to bringing back their operations in-house. The report goes on to quote the Deloitte survey that there was evidence of a “fundamental shift’ among the large companies. Even those that had initially overlooked the costs and benefits of outsourcing are part of this shift.
Ken Landis, senior strategy principal at Deloitte says, “Outsourcing was a tool developed in a recessionary environment and companies are now questioning whether it is the right strategy in a growth economy, especially when half the time the expected cost savings do not materialize.”
He goes on to add that this has prompted the larger companies to be more critical of new outsourcing deals, resulting in renegotiation of existing agreements and bringing back of other jobs in-house.
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