Companies based in Asia are seriously considering outsourced services for their core competencies in an effort to streamline their operations, reports the Economist Corporate Network (ECN). Industry watchers are warning, though, that these companies should carry out intensive due diligence before making any decision.
The ECN study covers more than 130 companies among different verticals. Companies belonging to the IT sector comprise about 2.4 percent of those surveyed.
Although the report indicated that companies were least likely to outsource product development and product design, companies studying the advantages of R&D outsourcing rival those who are also considering the outsourcing of human resource administration, finance and accounting.
ECN provides members with in-depth studies on business and economic trends. Study author Ross O’Brien, director of ECN Hong Kong, says that most of their large multinational clients “deploy in-region R&D to help them create a virtuous cycle.”
“[A] locally-developed product, which responds to application needs, form factors and price-points of Asian markets, is increasingly needed as tech companies depend on sales in Asia to shore up their global growth objectives,” O'Brien explains.
Rolf Jester, Gartner's Distinguished Analyst and Asia-Pacific vice president for IT services, comments that outsourcing R&D may not be for any company. “Each company competes on different characteristics. R&D and the ability to truly design innovative things may or may not be one of those characteristics, and each company needs to make that decision,” opines Jester.