PWC: Rise in offshoring, drop in satisfaction
A survey by PriceWaterhouseCoopers shows that a high percentage of financial companies shipping off work to companies overseas to cut on costs. The current high of 80% of the financial institutions is expected to rise even more to 94% in three years time through at least one of three ways:
- starting out and setting up business in a foreign country
- heading a joint venture
- outsourcing the whole business to a third party company overseas
Usual destination for such ventures is India, with China coming in a close second. Other fast-rising players in the outsourcing field include Ireland, Romania, and the Philippines.
29% of the respondents indicated intentions of offshoring as much as 10% of the payroll functions, which is nearly twice the number of respondents currently outsourcing portions of their workload.
Spurring the growth of this phenomenon are faster and more reliable communication lines, the enhanced Internet connectivity, and a competitiveness fostered by the growing number of an educated workforce. 2005 revenues for business outsourcing alone have been pegged at US$ 130 billion. Primary motivation for outsourcing lies in the cost savings gained by operating in lower-costing countries with high supply of qualified workers.
This however has not guaranteed complete satisfaction with the clients.
"Satisfaction levels with offshoring often leave much to be desired: only half the survey respondents pronounced themselves satisfied with the overall impact," reads the report. "Among the key sources of dissatisfaction are cost overruns, difficulties in recruiting and retaining staff and cultural differences between offshore employees and customers."
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