Most U.S. companies plan more outsourcing.

United States
November 22, 2006 7:26pm CST
Following is the article from Forbes magazine.. What's your view on this... NEW YORK, March 26 (Reuters) - Most U.S. companies plan to outsource more of its back-office functions overseas where labor is cheaper, despite a public relations backlash and weaker prospects for cost savings, according to a survey of 182 companies released on Friday. About 86 percent of U.S. companies plan to increase the use of offshore outsourcing firms, according to a poll by Chicago-based management consulting firm DiamondCluster International (nasdaq: DTPI - news - people). But companies have lost the illusion of dramatic cost savings from outsourcing, the survey said, because managing far-flung international operations can be costly and difficult. They expect outsourcing to save only 10 percent to 20 percent of their costs, down sharply from 50 percent two years ago. As a result, customers are demanding lower prices, leading to fierce competition between U.S. outsourcing providers such as International Business Machines Corp. (nyse: IBM - news - people) and Accenture Ltd. (nyse: ACN - news - people) and their India-based rivals.
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