LAKE BUENA VISTA, Fla., March 12, 2012 – The outsourcing industry is “coming of age”, the annual membership survey from the International Association of Outsourcing Professionals® (IAOP®) reveals, showing steady volume, revenue and employment in the industry.

As another sign of the industry’s maturity, a record number of nearly 800 delegates from 38 countries gathered for the association’s recently concluded three-day Outsourcing World Summit in Florida.

Despite the past year’s economic conditions, 70 percent of customers said they plan to either increase or maintain their current outsourcing volume, according to results from the association’s annual member survey, based on inputs from its more than 110,000 members and affiliates worldwide. This is the same rate as last year’s response.

More than 55 percent of customers want to use outsourcing to increase flexibility and help meet corporate business plans, while nearly 50 percent expect short and long-term cost savings from outsourcing.

Average revenue for outsourcing providers listed in the 2012 Global Outsourcing 100, also released at the conference, was $1.6 billion, with a growth rate of 6 percent versus 13 percent in 2008.

“The growth of the outsourcing industry over the past 25 years has been phenomenal,” said Jagdish Dalal, IAOP Managing Director, Thought Leadership. “Outsourcing is now a mature industry, which means it’s more readily accepted as a general business principle versus there being reluctance by top leadership to engage in outsourcing.”
 

• At the same time, current economic factors will determine the industry’s future, said Dalal in presenting the findings during a keynote address at the Summit’s 15th anniversary. These key factors include:
• The same number of employees -- 17,400 employees -- were engaged in providing outsourcing services in 2012 as 2008, even though revenues have declined, indicating profit pressure.
• The wage gap between China and U.S. manufacturing is expected to close in five years, according to the Boston Consulting Group. This will potentially impact the service levels requirements and locations for outsourcing.
• “Economic factors at work – such as the wage gap closing and revenues decreasing – can slow the growth of the industry as a whole,” he said.

Other results from the survey conducted with the support of Accenture include:

• The future of cloud-based computing as a platform to deliver outsourcing services is still mixed. Almost one-third of customers said they have no plans for cloud-based service acquisition – almost the same number as in 2010. Meanwhile, 80 percent of providers indicated that they either offer or are considering offering cloud-based services
• Both customers and providers are not concerned or do not see an impact of political rhetoric around outsourcing, and customer’s view of “corporate social responsibility” was largely unchanged
• Overall, the number and characteristics of Outsourcing Professionals remain unchanged.  However, more companies indicate they have a higher number of employees involved in outsourcing

Members Honored

The association also honored as Members of the Year: Eric Rongley, CEO of Bleum; Mary Lacity, Professor of Information, College of Business, University of Missouri; and Rene Herlaar, COP, Head of Network, Technology Networks, Vodafone, The Netherlands for their work to advance the industry and the association.

IAOP announced the dates for its next summits: The 2012 Latin America Outsourcing Summit, Oct. 2-3, at the Renaissance Sao Paulo Hotel in Sao Paulo, Brazil; and The 2013 Outsourcing World Summit, Feb. 18-20, at the JW Marriott Phoenix Desert Ridge, Phoenix, Arizona.

About IAOP
The International Association of Outsourcing Professionals® (IAOP®) is the global, standard-setting organization and advocate for the outsourcing profession. With more than 110,000 members and affiliates worldwide, IAOP helps companies increase their outsourcing success rate, improve their outsourcing ROI, and expand the opportunities for outsourcing across their businesses. To learn more, visit www.IAOP.org.