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Datum nieuwsfeit: 08-11-2006
Hackett onderzoeksalert: Uitbesteding back office-activiteiten kunnen jaarlijks EUR 48 miljard besparing voor Europese Top 500-bedrijven opleveren
( BW)(HACKETT-GROUP)(ANSR) Hackett Research Alert: Offshoring of
Back-Office Functions Could Generate EUR 48 Billion in Annual Savings
for Top 500 European Companies
Hackett Research Estimates that 1.3 Million Employees May be
Directly Impacted In the Future as Companies Take Advantage of Global
Labour to be Competitive
Business Editors
LONDON--(BUSINESS WIRE)--Nov. 8, 2006--Europe's Top 500 companies
could potentially save EUR 48 billion annually, or almost EUR 96
million on average per company, by offshoring many of their back
office activities, according to research from The Hackett Group, a
strategic advisory firm and an Answerthink company (NASDAQ: ANSR).
Advances in technology, along with increasingly educated global work
forces, enable the portability of business support activities across
information technology (IT), finance, human resources (HR) and
procurement to take advantage of labour arbitrage. Hackett estimates
that the increased use of offshore resources may impact up to 1.3
million general and administrative (G&A) jobs, or on average 2,620
positions per company within the FT Europe 500.
The Hackett Group is a world leader in best practice research,
benchmarking, and business transformation services that enable
executives to achieve world-class enterprise performance.
According to Hackett's research, globalisation has created an
environment where executives must constantly re-evaluate their cost
structures for general & administrative (G&A) operations against a
host of emerging global resources. Hackett also found that the best
companies are strategically improving performance in Finance, IT, HR,
procurement, working capital, and other areas in ways that help them
respond to the pressures of globalisation.
However many companies are relying on outdated sourcing analysis
techniques that lead them to materially underestimate the benefit
available through offshoring back office operations. With labour
arbitrage savings approximating 62%, Hackett finds that executives
must diligently standardise and simplify business processes to capture
the potential value of activity centralisation. Many organisations
fail to examine the characteristics of business processes, allowing
activities that provide no competitive advantage to remain
decentralised in industrialised countries at a higher cost.
Distributed activities are generally not portable, and therefore not
included within the scope of a globalisation initiative. The education
base and skill sets available in India, China, The Philippines,
Pakistan, Eastern Europe, Brazil, and other emerging countries
continues to expand, offering a new level of savings combined with
improved quality and talent, significantly strengthening the business
case for globalisation.
"Companies have long been aware that they can take out cost and
improve back office efficiency by streamlining businesses processes,
improving the way they use technology, and centralising operations,
either in a shared service centre or with an outsourcer. But over the
past few years, the resources available offshore have matured rapidly,
creating immediate opportunities to materially reduce companies' cost
structures," said Hackett Vice President, Tom Bangemann.
According to Hackett Managing Director Michel Janssen, "Today,
companies can turn to established offshore resources that deliver
labour cost reductions while maintaining or even improving the skill
level of staff. The potential savings of up to EUR 96 million annually
for a company are simply too compelling to ignore. Yet most executives
will miss the potential impact of service globalisation due to the
under-scoping of initiatives. Taking full advantage of service
globalisation requires a deep understanding of the nature of business
processes and how they can be optimally organised and delivered."
Having said this, companies still must use a well balanced
assessment methodology that fully considers the business' strategy,
culture, transactional characteristics and readiness for change. By
taking the broadest logical view of the processes in scope combined
with a holistic evaluation methodology firms can ensure that they are
maximising the benefit opportunities available through global markets
while managing the risk associated with these progressive
transformation initiatives.
Opportunities Extend Well Beyond IT
Hackett's analysis of the globalisation impact on Europe's Top 500
companies draws upon ongoing benchmark studies that have captured
outsourcing costs since 1992. While IT represents the largest
functional opportunity, significant savings can be generated in other
G&A areas, including finance, HR, and procurement. Hackett's analysis
of the savings opportunity breakdown for a typical FT Europe 500
company is based upon the median number of FTEs per process group,
labour arbitrage cost differential, and the potential degree for
offshoring by process group. The table below provides a summary of the
functional analysis:
-0-
*T
Annual Savings # of Staff Functional Activities
(EUR millions) Potentially Offering Largest ROI
Impacted Opportunities
----------- ---------------- ----------- -----------------------------
Application mgmt; Technology
IT EUR 46.0 1,093 infrastructure
----------- ---------------- ----------- -----------------------------
General accounting & external
reporting; Cash
disbursements; Revenue cycle
Finance EUR 28.7 933 activities
----------- ---------------- ----------- -----------------------------
Data mgmt reporting &
compliance; Total rewards
Human admin; Payroll admin
Resources EUR 12.4 348
----------- ---------------- ----------- -----------------------------
Purchase order processing;
Procurement EUR 8.8 246 Sourcing execution
----------- ---------------- ----------- -----------------------------
----------- ---------------- ----------- -----------------------------
Total per
company EUR 95.9 2,620
----------- ---------------- ----------- -----------------------------
Total for
FT Europe
500
companies EUR 47.9 billion 1.3 million
----------- ---------------- ----------- -----------------------------
*T
To see the full version of this research, please click on the
following link for the Hackett Research Insight Center:
www.thehackettgroup.com/insights/96M
More information on The Hackett Group is available: by phone at+44
(0)20 7003 8150; by e-mail at info@thehackettgroup.com; or on the Web
at www.thehackettgroup.com.
About The Hackett Group
The Hackett Group (www.TheHackettGroup.com), a strategic advisory
firm and an Answerthink company, is a global leader in best practice
research, benchmarking and business transformation services that
enable world-class enterprise performance across selling, general and
administrative (SG&A) and supply chain activities. Through the
acquisition of REL Consultancy Group, we offer Hackett-REL Total
Working Capital services to free up cash flow from operations. Hackett
provides strategic insight, best practice advice and implementation
services grounded in performance metrics obtained through14 years and
3,500 benchmark studies at 2,100 of the world's leading companies. Our
clients comprise 97% of the Dow Jones Industrials, 50% of the FTSE 100
and 70% of the DAX 30.
--30--MT/ny*
CONTACT: For The Hackett Group
Media:
Greg Vitarelli, +44 (0) 207 379 4010
Communications Manager
gv@sherpanet.com