Tuesday, July 14, 2009

PA Consulting survey: businesses considering multi-sourcing

A new survey conducted by PA Consulting indicates that most businesses are looking at multi-sourcing as one of the possible ways out of the current crisis.

Industry analysts estimate that businesses will increasingly restructure their outsourcing fuctions over the next three to five years and consider multi-sourcing for its diversified risk and cost-efficiency. However, experts also warn that multi-sourcing can hurt a business if the professionals in charge overlook its challenges.

As PA Consulting's latest survey shows, almost 75 percent of businesses are considering multi-sourcing in the current economic crisis. "We advise caution," says Graham Beck, a senior sourcing advisor at the company. "Businesses and professionals do not realise that multi-sourcing requires special capabilities."

Jonathan Cooper-Bagnall, a member of PA’s management group, warns: "If organisations fail to manage single sourcing efficiently, there are serious questions to be asked about their evolution to complex outsourcing model."

Compliance with the legislation and security issues are some of the things that companies must take into account. While outsourcing is a good way to cut expenses and it allows businesses to hire expert services, they must fully understand the legal issues, risks and service level agreements involved in order to manage outsourcing properly.

"There are far greater security and compliance requirements today," warns Lesica. "Outsourcing and offshoring now require security assessment, audits and implementation of stringent and comprehensive security measures."

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