Outsourcing: Current and future trends

TLDR

Outsourcing is driven by cost savings and core‑competency focus, with future emphasis on best‑of‑breed practices via technology and increased HR and IT outsourcing. The study surveys firms in the U.S., U.K., and Continental Europe to assess outsourcing as a key strategic lever. Findings show that partnership alliances and performance‑driven contracts will rival trusted supplier relationships, and keiretsulike horizontal linkages will be needed to achieve scale and competency benefits. © 2005 Wiley Periodicals, Inc.

Abstract

Highlighted are two reasons for outsourcing: cost and focus on the core competencies of the enterprise. Surveying U.S., U.K., and Continental Europe companies concerning current and future outsourcing trends positions outsourcing as a prominent strategic lever. Achieving “best-of-breed” practice is predicted to occur through new technology. Also, human resources and IT outsourcing will become more prominent. The results strongly indicate that partnership alliances and performance-driven contracts will become as important as the current preferred, trusted supplier relationship. Keiretsulike, horizontal linkages will be required to realize scale and competency advantages from future outsourcing arrangements. © 2005 Wiley Periodicals, Inc.