More Mid-sized Companies are Embracing Offshoring/Outsourcing, Survey Says

As President Obama has begun his Insourcing campaign, designed to bring more manufacturing jobs back onshore, Duke University’s Fuqua School of Business released results of its latest survey of offshoring and outsourcing practices. Companies that have moved processes offshore say they have gained in flexibility and agility, and the ability to compete in challenging economic environments, Duke says.

According to Fuqua professor Arie Lewin, 66% of respondents this year said offshoring has led to improved flexibility, up from 48% in 2009 and 66% last year. India, China and the Philippines dominate, especially in the areas of IT infrastructure, application development and maintenance, contact centers and innovation activities, but Latin America is emerging as a new global sourcing site. Mid-sized companies are reporting aggressive plans to expand and begin new offshroing initiatives, with 73% of respondents from mid-sized companies saying that they plan to expand existing offshore business processes over the next 18-36 months.

Both mid-size and large companies expect to initiate new global sourcing activities, primarily in contact centers, application development and maintenance, engineering, product development and knowledge and analytical services.

More U.S. companies appear to see global sourcing as part of a comprehensive growth strategy, the study suggests, and more than half of U.S. companies in most industries have a corporate strategy in place.  (For pharma, the figure was 47%) To access the full report, and news of Obama's program, click here.