Financial crisis and outsourcing

We are in the midst of global economic downturn.Since businesses are cutting costs and no. of employees what impact do you think it’s going to have on outsourcing industry (specifically marketing and procurement outsourcing)?

I think marketing and procurement services will be in high demand due to the following reasons:

  1. Companies are cutting business travel expenses and outsourcing of purchasing and marketing can help to reduce these costs.
  2. Since businesses are cutting overheads and headcount they need marketing and purchasing outsourcing service providers to do marketing and procurement instead of their regular employees.
  3. Outsourcing service providers can reudce the price by achieving economies of scale.
  4. Outsourcing service providers charge per contract rather than fixed annual fees as compared to inhouse operations.
  5. In addition to reducing operational costs businesses can get more professional services from outsourcing service providers.
  6. Offshore outsourcing service providers in marketing and procurement can also lower the risks attached with quality,logistics and payments etc…

That’s why I think in 2009-2010 demand for marketing and procurement outsourcing will soar despite the global recession.What do you think?


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