Some 90 percent of U.S. companies outsource at least one activity within their company, spending a total of $350 billion with many deals exceeding $1 billion, according to business intelligence firm Cutting Edge Information.
In the past, Cutting Edge says outsourcing initiatives were looked as a sign of corporate weakness; but now such activities suggest a strategic way to improve organizational performance, the firm notes.
In “Outsourcing from Strength,” Cutting Edge says it has uncovered effective and proven ways companies have successfully achieved their outsourcing goals.
The Durham-based firm says the report shows how companies have cut costs and streamlined operations by outsourcing their non-essential work. It features practices from more than 50 companies across 20 industries with a new focus on the pharmaceutical industry.
The study profiles outsourcing strategies from many of large companies, as well as outsourcing practices from growing firms. They include Pfizer, Merck, Ford, GE, IBM, Sprint, Dell and EDS.
General Motors, for example, discovered that more than 100,000 of its US employees travel each year. The carmaker made the determination that serving as an enormous travel agency was not part of its core competencies.
After a search, GM retained Captura Software to handle the processing, saving the company an estimated $3.7 million per year through this outsourcing, a 93 percent cost reduction.
Other topics in the report include how the best companies select the right outsourcing providers for their needs; proven techniques for aligning outsourcing with growth strategies; field-tested processes to get the most out of outsourcing deals; tips for coordinating supply chain operations through strategic outsourcing; and pre-designed measurements to hold vendors accountable for results.
Cutting Edge: www.cuttingedgeinfo.com