Why do it yourself if someone else can do it cheaper, better, etc.? That appears to be the rationale behind recent announcements from Supervalu and Procter & Gamble to go outside to have important functions within accounting and information technology (IT) handled by a third-party.
In the case of Supervalu, the grocery wholesaler and retailer announced it would layoff at least 110 finance department employees in Minneapolis and Boise after it made the decision to outsource its accounts payable, vendor accounts receivable and other accounting operations to India. As an Idaho Statesman article points out, this is not the first time that Supervalu has outsourced jobs overseas. Last year, it sent 180 IT jobs to India.
Procter & Gamble also announced it had signed a $650 million outsourcing deal to have BT Group run P&G's VoIP, internet services, remote access, audio and videoconferencing as well as firewall and anti-virus security services.
Alistair Wilson, P&G's associate director of global business services responsible for networks and telecom, offered an explanation for the move to BT. "Just like we buy power and just care that the light goes on, we just want to plug something into a jack in the wall and know that the power is there to give us dial tones or computer connections when and where we need them," he told InformationWeek.
P&G has also gone down the outsourcing road before. In 2003, it signed a 10-year deal with HP to handle certain IT functions. The same year it signed an agreement with IBM to manage human resources.
Discussion Questions: Do you expect to see the percentage of companies outsourcing IT, HR, accounting functions, etc. begin to pick up? Will more of these outsourcing deals mean sending jobs overseas? What do you see as the relative merits/drawbacks to outsourcing jobs rather than keeping them in-house?