Outsourcing, Strategic, Business, Reduce, Costs, Access, Specialist, Executives

Chief executives embrace strategic outsourcing to reduce costs, access specialist skills and build a flexible business

18 Mar 2004 | (Survey)

A recent survey conducted by Computer Sciences Corporation (NYSE: CSC), which questioned the views of CEO’s, CIO’s and CFO’s within Europe’s top 250 businesses[1], has highlighted key trends in how and why strategic outsourcing is being embraced to improve business performance: - Their main objective for strategic outsourcing continues to be to reduce or control costs. - A key future objective is for outsourcing to deliver greater flexibility and business transformation. - They now prefer to work with consortia that provide access to specialist skills from multiple suppliers.

The survey entitled "Strategic Outsourcing: Current Practices and Future Expectations" is the first to give a snapshot view of the strategic outsourcing activities of Europe’s top 250 owned companies. It explored senior executives’ perception of outsourcing five years ago, today and three years ahead to reveal the trend that outsourcing is increasingly being seen as an important driver of future business growth. By questioning them on the robustness of their current business strategy and levels of satisfaction with large outsourcing deals (in excess of €50million) it provides a comprehensive overview of the European outsourcing landscape.

Amongst the key findings the survey revealed that the main objective for strategic outsourcing continues to be to reduce and control costs. Whilst board-level executives of those companies which already have long-term outsourcing contracts are generally happy with service delivery and standard implementation and deployment, they are now looking for outsourcing to enable greater flexibility and transform the way IT supports their business.

“Whilst the past three years have seen major organisations choose to outsource parts of their business to meet tough economic objectives, the findings of this survey reflect the real opportunities for businesses that embrace a strategic approach to outsourcing,” commented George Bell, president of CSC’s European operations. “Outsourcing enables businesses to reduce costs, tap into high levels of expertise and helps executives transform their businesses and respond to an increasingly volatile and changing economy.”

The survey also highlighted the key issues and dilemmas facing senior executives when deciding on an outsourcing strategy. Nearly 80% of respondents felt that choosing an outsourcing provider required an above average level of effort, and 65% said it was equally challenging to manage the on-going relationship. However, 90% of respondents would prefer to manage a number of best of breed suppliers.

“Using multiple suppliers can provide businesses with access to high levels of expertise, but this typically requires more time and effort for businesses in both the selection of outsourcing providers and on-going management,” continued Bell. “Companies need to weigh up the cost, service and management implications of either outsourcing to one supplier or to multiple suppliers. An alternative to these approaches is to outsource to a single supplier who manages a number of service companies on the client’s behalf. We therefore expect to see in Europe an increase in deals signed on new consortia or alliance based models. These will be similar to the contracts that CSC has been running in the US for a number of years, which provide access to specialist suppliers through a single point of contact and management.”

A presentation detailing the main findings of the survey, including a breakdown of respondents by country and industry sector, can be obtained by contacting CSC.

For further information please contact:
Joanne Davis
CSC Press Office
Tel: 01252 536737
Mob: 07799 476532
Email: jdavis62@csc.com

Charlotte West / Matt Cooper / Louise Kingham
Harvard Public Relations
Tel: 0208 759 0005
Email: csc@harvard.co.uk

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