31 January, 2012 - A mixed global economic outlook, high levels of volatility, weak consumer demand, and ongoing corporate uncertainty will continue to impact outsourcing demand and consulting growth, according to the KPMG's 4Q11 Sourcing Advisory Pulse Survey.
The survey, which was of KPMG field advisors and leading global business and IT service providers, also found that organizations engaged in outsourcing are recognizing the need to invest in IT-enabled solutions, but must overhaul business and operating models to fully exploit the technologies’ potential.
“Buyers are placing great emphasis on investing in IT, but given the economic uncertainty, all efforts undertaken will occur under watchful, cost conscious eyes,” said Stan Lepeak, global research director in KPMG’s Management Consulting Group. “Buyers and providers are smarter, more experienced, and less likely to enter into larger and more risky deals, and evolutionary innovations such as cloud computing and targeted BPO are changing the nature of what constitutes outsourcing.”
Some 73 percent of advisors and 79 percent of providers cited the weak economy as likely having the biggest impact on buyer businesses and operations, especially in Europe. But there are positive signs for improving economic growth in some western markets, such as North America, and emerging market growth still is expected to be strong: 53 percent of advisors and 45 percent of service providers responded that improving global economic conditions would have the biggest positive impact on their clients’ businesses in 2012, suggesting large scale outsourcing deals will accelerate as the economy improves.