2012 Global Outsourcing Survey ResultsAustralian InsightsDeloitte ConsultingApril 2012
 Has the time arrived for outsourcing to be considered “mainstream”? Outsourcing and the “Cloud” - hype ? Does outsourc...
About the survey
2012 Deloitte Global outsourcing and insourcing survey respondents          Global : What are the revenues of your organiz...
Current state of outsourcingand future outsourcing plans
How does your organisation use outsourcing?   Global: Is outsourcing a standard practice in your organisation?         Aus...
How does your organisation consider outsourcing and shared services?   Global: Does your organisation distinguish between ...
Which option best describes your company’s current and future sourcing plan for thefollowing business functions?          ...
For those business functions where you currently or plan to employ outsourcing,where does the majority of your outsourcing...
Has the time arrived for outsourcing to be considered mainstream? Outsourcing continues to “go mainstream”, becoming anot...
Cloud computing
Is your organisation currently using cloud computing services?                   Yes, 30%                                 ...
Opportunities and obstacles in cloud computing                                           Is your company currently using c...
Key trends from cloud computing Though often hyped, there continues to be a substantial amount of uncertainty about cloud...
Most recent outsourcingexperience and outcome
What was the value and duration of your most recent outsourcing contract        What is the total contract value?         ...
What were the objectives of your most recent outsourcing initiative?                                    How important were...
What cost reduction was anticipated and achieved from your most recent       outsourcing experience ?                     ...
How effective was the vendor transition?      How long was the transition period for your most recent            Did the t...
Did the most recent outsourcing experience live up to expectations?     How satisfied are you with the outcome of your mos...
Does outsourcing deliver the key benefits “sold” by vendors A large number of organisations have achieved significant cos...
Conclusions Has the time arrived for outsourcing to be considered “mainstream”? Outsourcing and the “Cloud” - hype ? Do...
Copyright © 2012 Deloitte Development LLC. All rights reserved.
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2012 Global Outsourcing Survey Results

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2012 Global Outsourcing Survey Results

  1. 1. 2012 Global Outsourcing Survey ResultsAustralian InsightsDeloitte ConsultingApril 2012
  2. 2.  Has the time arrived for outsourcing to be considered “mainstream”? Outsourcing and the “Cloud” - hype ? Does outsourcing deliver the outcomes “sold” by vendors?
  3. 3. About the survey
  4. 4. 2012 Deloitte Global outsourcing and insourcing survey respondents Global : What are the revenues of your organization? Australia : What are the revenues of your organization? $500 million to $5bn or less than $1 more 27% billion $25 billion or 11% more $15 billion to Less than $500 Less than 19% less than $25 million $500m 48% billion 23% $1bn-$5bn 5% 14% $5 billion to less than $15 billion 19% $1 billion to less than $5 billion 23% $500m-$1bn 11% What is the geographic reach of your organization? 53% 40% 27% 22% 18% 15% 17% 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx 8% Globally In more than one In the same Domestically Globally In more than In same Domestically geographic region geographic region one geo but not geographic but not globally globally locationAs 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 legalstructure of Deloitte LLP and its subsidiaries. -4-
  5. 5. Current state of outsourcingand future outsourcing plans
  6. 6. How does your organisation use outsourcing? Global: Is outsourcing a standard practice in your organisation? Australia : Is outsourcing a standard practice in your organisation? No, but No, but considering considering it it, 19% 22% Yes 34% No, 21% Yes, 60% No 44% 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx -6-
  7. 7. How does your organisation consider outsourcing and shared services? Global: Does your organisation distinguish between outsourcing Australia: Does your organisation distinguish between and offshoring? outsourcing and offshoring? No, view decisions Yes, view together decisions 24% No, view separately, decisions 46% Yes, view together, Dont know decisions 54% 26% separately 50% Australia: Does your organisation distinguish between outsourcing and shared services ? Dont know 22% 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx Yes, view No, view decisions decisions separately separately 59% 19% -7-
  8. 8. Which option best describes your company’s current and future sourcing plan for thefollowing business functions? Global Australia Information Technology 76% 81% IT 24% 39% Operations 42% 53% Finance 9% 15% Finance 37% 53% HR 8% 12% Human Resources 30% 46% legal 15% 19% Legal 40% 42% Real Estate 0 Real Estate/Facilities 32% 41% Procurement 4% 10% Procurement 24% 36% Sales/Marketing support 0 Sales/Marketing Support 11% 24% Currently uses outsourcing Expected future increase in outsourcing 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx -8-
  9. 9. For those business functions where you currently or plan to employ outsourcing,where does the majority of your outsourcing occur? Offshore Near Shore Information Technology 51% 70% Procurement 21% 24% Finance 41% 47% Human Resources 19% 22% Operations 39% 44% Finance 13% 18% Procurement 36% 34% Real Estate/Facilities 9% 19% Human Resources 14% 31% Information Technology 10% 15% Sales/Marketing Support 8% 29% Legal 5% 17% Legal 7% 13% Sales/Marketing Support 4% 19% Real Estate/Facilities 5% Operations 4% 9% 3% Currently uses outsourcing Expected future increase in outsourcing Expected future use of outsourcing Currently uses outsourcing Currently uses outsourcing Expected future increase in outsourcing Expected future use of outsourcing Currently uses outsourcing 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx -9-
  10. 10. Has the time arrived for outsourcing to be considered mainstream? 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 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx - 10 -
  11. 11. Cloud computing
  12. 12. 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 Which cloud computing services have you implemented? computing services? Email & Messaging 43%Reduce capital 50% 35% spending Web Site Hosting / Maintenance 39% IT Infrastructure as a Service 32%Increase agility 42% 42% Front Office Systems 29% Reallocate 35% 27% resources Back Office Systems 29% Access to new Voice / Telephony Systems 18%technologies or 35% 35% services Middle Office Systems 14% Very important Important 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx - 12 -
  13. 13. Opportunities and obstacles in cloud computing Is your company currently using cloud computing services? Yes, 30% No, 47% Don’t know, 23% Do you plan on using cloud computing within 3 years? Global Yes, 38% Don’t know, 56% No, 6% AU 20% 36% 44% If no, why do you believe you will not use cloud computing? Cloud computing is too new of a concept for my 75% business Data privacy concerns 75% Security concerns 50% 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx My business lacks the knowledge to implement 50% 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 . - 13 -
  14. 14. Key trends from cloud computing 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 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx - 14 -
  15. 15. Most recent outsourcingexperience and outcome
  16. 16. What was the value and duration of your most recent outsourcing contract What is the total contract value? What was the expected duration? 6 Years or more 18%Greater than $1 billion 2% 5 Years 26% Between $501 million 2% and $1 billion 4 Years 6% Between $151 million 6% and $500 million 3 Years 24% Between $76 million 8% and $150 million 2 Years 13% Less than $75 million 82% Less than 2 Years 13% (Australia: 95%) 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx - 16 -
  17. 17. What were the objectives of your most recent outsourcing initiative? How important were each of these objectives in your most recent outsourcing effort? Reduce operating costs 62% 25% Improve customer service 42% 31% Gain competitive advantage 20% 29% Gain tax advantages 20% 23% Leverage new technologies 17% 25% Desire to consolidate 17% 25% Access more flexible HR models 11% 42% Improve controls 10% 4% Very important Important 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx - 17 -
  18. 18. What cost reduction was anticipated and achieved from your most recent outsourcing experience ? Global Australia 37% 33%29% 37% 25% 31% 19% 28% 17% 18% 10% 9% 16% 16% 15 10% 11% 1% 6% 8% 4% 7% 8% 5% 00% to 10% 11% to 20% 21% to 30% 31% to 40% Greater than Costs actually 40% increased 0-10% 11-20% 21-30% 31-40% >40% Costs Dont increased know Antiicpated Achieved • Actual cost savings were less than anticipated . However, overall significant costs savings (>10% ) 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx 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. - 18 -
  19. 19. How effective was the vendor transition? How long was the transition period for your most recent Did the transition negatively impact service delivery? outsourcing effort? Major business Less than 90 days 30% disruption, 5% 90 to 180 days 54% No business disruption, 181 to 270 days 8% 36% Minor business disruption, 271 to 365 days 5% 59% Greater than 365 days 3% 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx - 19 -
  20. 20. Did the most recent outsourcing experience live up to expectations? How satisfied are you with the outcome of your most What factors led you to be less than satisfied with your recent outsourcing initiative? most recent outsourcing initiative? Vendor underestimated scope/effort 52% Lack of service level attainment 48% Sub-par vendor performance 38% Lack of timely project/service 29% request execution Satisfied, Neutral, 16% Sub-par vendor resources 29% 69% Lack of business case attainment 24% Dissatisfied, 8% Attrition of key resources 24% Lack of vendor innovation 24% Extremely Lack of vendor knowledge of my 24% satisfied, 7% business 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx - 20 -
  21. 21. Does outsourcing deliver the key benefits “sold” by vendors 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. 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx - 21 -
  22. 22. Conclusions Has the time arrived for outsourcing to be considered “mainstream”? Outsourcing and the “Cloud” - hype ? Does outsourcing deliver the outcomes “sold” by vendors? 2012_Global_Outsourcing_and_Insourcing_Survey v37.pptx - 22 -
  23. 23. Copyright © 2012 Deloitte Development LLC. All rights reserved.
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