Non-Environmental Cost-Benefit News

Three-quarters of U.S. and European multination.Is use outsourcing or shared services to support financial functions-but less than half consider outsourcing to be cost effective, according to PricewaterhouseCoopers' Management Barometer Survey (PwC; www.pwc.com). Despite this finding, 29% of the companies expect to increase their outsourcing of financial functions.

"Companies that turn to outsourcing for cost savings should conduct comprehensive feasibility studies to better understand their potential return on investment," said Dan DiFilippo, global leader for performance improvement and U.S. leader for governance, risk, and compliance at PwC. "Many companies enter outsourcing arrangements without conducting a proper cost-benefit analysis."

Of the respondents to the PwC survey, 31 % see limited or very little benefit to outsourcing, 44% report that their organizations have saved a moderate amount, and 3% saved a great deal.

Another survey that assessed the costs and results of outsourcing came to a different conclusion from the PwC research, at least with regard to outsourcing training. Bersin & Associates' (www.bersin.com) Training Outsourcing: What Works(TM) reports that outsourcing saves money and staff: Companies that outsource training functions spend 31 % less per learner than those operating internal training operations ($827 vs. $1,191). Training outsourcers also have 26% fewer training staff per learner (7.8 staff per thousand learners) than internal training programs (10.5 staff per thousand learners).

HR Focus January 2005 Volume 82, Issue 1; page 8
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