Wednesday, April 11, 2007

Firms in Automotive, Manufacturing, and High-tech Industries to Outsource IT and BPO Back-office Functions – EquaTerra

According to a study conducted by EquaTerra, firms across various industries including automotive, manufacturing, and high-tech in North America have been increasingly outsourcing their back-office IT and business processes functions to external vendors to remain globally competitive. In addition, reduced cost, improved customer satisfaction levels, and enhanced performance are the major factors driving the need for outsourcing such functions.

It has been discovered that firms across the three industries have been outsourcing their IT, call centers and CRM, finance and accounting, contract manufacturing, logistics, application development, and engineering functions for a long time. At present, they need to focus on outsourcing back-office IT and BPO.

Among the key findings, about 32 percent of firms revealed that they outsourced at least 1 process and are expecting to outsource few more processes in the future. About 38 percent of firms are expected to outsource their functions to new geographies or business units while about 29 percent are expected to expand their existing outsourced process areas.

According to EquaTerra, big outsourcing vendors are expected to offer a wide range of services in other areas, such as R&D, logistics services, document services, warranty, and after-sales services. However, the number of vendors offering multiple services across various geographies will not be substantial. In addition, it is expected that organizations will outsource their back-office BPO functions to low-cost destinations, such as India or China, and leverage those markets as well. However, Central and Eastern Europe will remain the preferred destination among buyers.

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