Outsourcing has moved from the fringes of business activity to become a crucial part of the entire business process, according to the results of a recent survey commissioned by Accenture South Africa.
Until recently, companies that outsourced services generally only did this with non-essential functions such as catering, cleaning and transport. Few were prepared to risk outsourcing core functions such as manufacturing.
"This has changed, with companies that previously only dabbled on the periphery now prepared to outsource mission-critical functions," says John Bell, a director at Accenture`s Resources Operating Group.
"The survey has shown that, although cost reduction remains a key motivation, strategic reasons are increasingly being given as the primary motivation. In other words, it allows management to focus on core competencies while devolving key parts of the business process to specialist outside firms."
He believes that the outsourcing trend is - at least in part - being driven by the country`s ongoing brain drain, as outsource service providers offer a depth of skill and specialist knowledge that most companies find difficult to attract and retain.
Of the 71 companies surveyed, all engaged in some form of outsourcing, and more than half said they were satisfied with the results.
Bell says a key finding was the improvement of staff morale in the outsourced function. For example, IT staff in a manufacturing operation have little hope of making it to the top of the organisation, but when this function is outsourced to a specialist IT firm, their career opportunities multiply.
"Perhaps the most important of all the findings is that the outsourcing trend is accelerating. This shows the extent to which companies are redefining their core businesses and outsourcing mission-critical functions to specialist outside firms. Something like this was inconceivable only a decade ago."
Share
