2012 global outsourcing survey results
DESCRIPTION
Australasian InsightsTRANSCRIPT
Deloitte Consulting
April 2012
2012 Global Outsourcing Survey Results
Australian Insights
Has the time arrived for outsourcing to be considered “mainstream”?
Outsourcing and the “Cloud” - hype ?
Does outsourcing deliver the outcomes “sold” by vendors?
About the survey
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2012 Deloitte Global outsourcing and insourcing survey respondents
22%
8% 17%
53%
DomesticallyIn the samegeographic region
In more than onegeographic region
but not globally
Globally
Global : What are the revenues of your organization?
What is the geographic reach of your organization?
Less than $500 million 23%
$500 million to less than $1
billion 11%
$1 billion to less than $5 billion
23%
$5 billion to less than $15 billion
19%
$15 billion to less than $25
billion 5%
$25 billion or more 19%
As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal
structure of Deloitte LLP and its subsidiaries.
Australia : What are the revenues of your organization?
27%
18% 15%
40%
Globally In more thanone geo but not
globally
In samegeographic
location
Domestically
Less than $500m 48%
$500m-$1bn 11%
$1bn-$5bn 14%
$5bn or more 27%
Current state of outsourcing
and future outsourcing plans
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How does your organisation use outsourcing?
Global: Is outsourcing a standard practice in your organisation?
Yes, 60% No, 21%
No, but considering
it, 19% Yes 34%
No 44%
No, but considering it
22%
Australia : Is outsourcing a standard practice in your organisation?
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How does your organisation consider outsourcing and shared services?
Global: Does your organisation distinguish between outsourcing and offshoring?
Yes, view decisions
separately, 46%
No, view decisions together,
54%
Yes, view decisions separately
50%
Don't know 26%
No, view decisions together
24%
Australia: Does your organisation distinguish between outsourcing and offshoring?
Australia: Does your organisation distinguish between outsourcing and shared services ?
Yes, view decisions separately
59%
No, view decisions separately
19%
Don't know 22%
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Which option best describes your company’s current and future sourcing plan for the
following business functions?
24%
36%
41%
42%
46%
53%
53%
81%
11%
24%
32%
40%
30%
37%
42%
76%
Sales/Marketing Support
Procurement
Real Estate/Facilities
Legal
Human Resources
Finance
Operations
Information Technology
Currently uses outsourcing Expected future increase in outsourcing
24%
9%
8%
15%
0
4%
0
39%
15%
12%
19%
10%
IT
Finance
HR
legal
Real Estate
Procurement
Sales/Marketing support
Global Australia
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For those business functions where you currently or plan to employ outsourcing,
where does the majority of your outsourcing occur?
Offshore Near Shore
5%
13%
29%
31%
34%
44%
47%
70%
3%
7%
8%
14%
36%
39%
41%
51%
Real Estate/Facilities
Legal
Sales/Marketing Support
Human Resources
Procurement
Operations
Finance
Information Technology
Expected future use of outsourcing Currently uses outsourcing
9%
19%
17%
15%
19%
18%
22%
24%
4%
4%
5%
10%
9%
13%
19%
21%
Operations
Sales/Marketing Support
Legal
Information Technology
Real Estate/Facilities
Finance
Human Resources
Procurement
Expected future use of outsourcing Currently uses outsourcingCurrently uses outsourcing Expected future increase in outsourcing Currently uses outsourcing Expected future increase in outsourcing
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Outsourcing continues to “go mainstream”, becoming another standard business practice. However, Australian take-up lags global
trends.
The outsourcing market continues to confuse outsourcing with offshoring. Australian offshoring take up is much below global.
Shared services and outsourcing are seen by Australian organisations as separate considerations and may impact upon the
efficiency and effectiveness of Australian shared services
Globally, IT, Finance and HR continue to lead in BPO though all processes are expecting to increase. Australia lags global
organisations in all areas
In Australia, Planning, Budgeting and Forecasting, talent management and spend analysis are areas identified most likely as
expanding in outsourcing beyond current transactional and IT services.
Offshoring still relatively small in AU
Has the time arrived for outsourcing to be considered mainstream?
Cloud computing
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Is your organisation currently using cloud computing services?
Yes, 30% No, 47% Don’t know, 23%
How important were the following factors in your decision to use cloud
computing services?
Which cloud computing services have you implemented?
50%
42%
35%
35%
35%
42%
27%
35%
Reduce capitalspending
Increase agility
Reallocateresources
Access to newtechnologies or
services
Very important Important
43%
39%
32%
29%
29%
18%
14%
Email & Messaging
Web Site Hosting / Maintenance
IT Infrastructure as a Service
Front Office Systems
Back Office Systems
Voice / Telephony Systems
Middle Office Systems
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Opportunities and obstacles in cloud computing
The majority of respondents that currently do not use cloud computing technologies do not know if they will be utilizing cloud
computing in three years. Australian respondents have much less appetite .
Yes, 30% No, 47% Don’t know, 23%
Do you plan on using cloud computing within 3 years?
Is your company currently using cloud computing services?
Yes, 38% Don’t know, 56% No, 6%
If no, why do you believe you will not use cloud computing?
75%
75%
50%
50%
Cloud computing is too new of a concept for mybusiness
Data privacy concerns
Security concerns
My business lacks the knowledge to implementcloud computing
20% 36% 44% AU
Global
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Though often hyped, there continues to be a substantial amount of uncertainty about cloud based outsourcing and its future adoption
Though almost a third of respondents (15% in AU) use cloud based outsourcing, many of the applications are in messaging and web
hosting, products that have been maturing for far longer than many other cloud offerings
Data privacy and security are major concerns of those respondents that do not believe that they will be using cloud based
outsourcing in the next three years
Key trends from cloud computing
Most recent outsourcing
experience and outcome
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What was the value and duration of your most recent outsourcing contract
What is the total contract value? What was the expected duration?
13%
13%
24%
6%
26%
18%
Less than 2 Years
2 Years
3 Years
4 Years
5 Years
6 Years or more2%
2%
6%
8%
82%
Greater than $1 billion
Between $501 millionand $1 billion
Between $151 millionand $500 million
Between $76 millionand $150 million
Less than $75 million(Australia: 95%)
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What were the objectives of your most recent outsourcing initiative?
How important were each of these objectives in your most recent
outsourcing effort?
62%
42%
20%
20%
17%
17%
11%
4%
25%
31%
29%
23%
25%
25%
42%
10%
Reduce operating costs
Improve customer service
Gain competitive advantage
Gain tax advantages
Leverage new technologies
Desire to consolidate
Access more flexible HR models
Improve controls
Very important Important
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What cost reduction was anticipated and achieved from your most recent
outsourcing experience ?
29%
33%
17%
10% 10% 1%
37%
25%
19%
4%
9% 6%
0% to 10% 11% to 20% 21% to 30% 31% to 40% Greater than40%
Costs actuallyincreased
Antiicpated Achieved
Global Australia
• Actual cost savings were less than anticipated . However, overall significant costs savings (>10% )
were achieved by 57% of global organisations and 39% of Australian respondents
• Some organisations reported costs increase although some of the experiences are relatively recent.
28% 31%
18%
7% 5% 0
11%
37%
16% 16%
8%
15
8%
0-10% 11-20% 21-30% 31-40% >40% Costsincreased
Don'tknow
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How effective was the vendor transition?
How long was the transition period for your most recent
outsourcing effort?
Did the transition negatively impact service delivery?
No business disruption,
36%
Minor business
disruption, 59%
Major business
disruption, 5% 30%
54%
8%
5%
3%
Less than 90 days
90 to 180 days
181 to 270 days
271 to 365 days
Greater than 365 days
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Did the most recent outsourcing experience live up to expectations?
Satisfied, 69%
Neutral, 16%
Dissatisfied, 8%
Extremely satisfied, 7%
52%
48%
38%
29%
29%
24%
24%
24%
24%
Vendor underestimated scope/effort
Lack of service level attainment
Sub-par vendor performance
Lack of timely project/servicerequest execution
Sub-par vendor resources
Lack of business case attainment
Attrition of key resources
Lack of vendor innovation
Lack of vendor knowledge of mybusiness
How satisfied are you with the outcome of your most
recent outsourcing initiative?
What factors led you to be less than satisfied with your
most recent outsourcing initiative?
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A large number of organisations have achieved significant cost reduction although in some cases below expectations. A rigorous,
structured approach to deal strategy and deal preparation helps to ensure an accurate and achievable cost reduction estimate
Customer satisfaction with recent outsourcing deals is high; little substantial disruption to business has occured
Vendor underestimating scope is the largest contributor to deal dissatisfaction. This can be improved by using a structured
contracting process
Vendor communications and vendor escalations are the most often used remedies for underperforming deals. The quality of the
vendor management organization is critical to resolving issues.
Does outsourcing deliver the key benefits “sold” by vendors
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Has the time arrived for outsourcing to be considered “mainstream”?
Outsourcing and the “Cloud” - hype ?
Does outsourcing deliver the outcomes “sold” by vendors?
Conclusions
Copyright © 2012 Deloitte Development LLC. All rights reserved.