Thursday, October 12, 2006

The Latest on Outsourcing

It appears that outsourcing may not be destroying life as we know it (or at least not yet).

Multinationals cut down on outsourcing

The wave of outsourcing that has engulfed the global economy over the past few years is showing signs of abating as multinational companies opt for shorter and smaller deals, according to a study to be published on Thursday.

The outsourcing industry has just experienced its worst quarter in four years and is unlikely to match the $81.9 bn in contracts won in 2005 by the end of this year, data from the consulting firm Technology Partners International shows.

A slowdown in 2006 would mark the second consecutive yearly fall in the volume of outsourcing contracts since their $84.7 bn peak reached in 2004.

The results suggest that, following the drive to curb costs and streamline operations by contracting out non-core functions, multinationals might be running out of major operations to outsource.