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Study: Outsourcing Out; Tech Investments in Social Media and Cloud In

The stagnant global economy and the impact of problems with several European Union members continue to act as a drag on businesses. However, there is a silver lining within a new study of global business and services providers for those who oppose the idea of outsourcing and champion technological advancements.

KPMG's 4Q11 Sourcing Advisory Pulse Survey found most providers and field advisors had a negative view of the health of the overall economy. The survey said about 61% of service providers reported pipeline growth during the last three months, down about 15% from the previous quarter. And less than half of those polled expected any notable increase in demand before mid-year, a sentiment showing a similar drop from the last metric. Among the things being rethought or dismissed by many companies is the idea of outsourcing job functions, according to the study.

"Given the economic uncertainty, all efforts undertaken will occur under watchful, cost-conscious eyes," said Stan Lepeak, global research director for KPMG's Management Consulting Group. "Buyers and providers are smarter, more experienced and less likely to enter into larger and more risky deals. Evolutionary innovations such as cloud computing and targeted BPO are changing the nature of what constitutes outsourcing."

To wit, respondents to the study noted that technological investment was the second most important priority initiative, with 50% of advisors and 62% of service providers listing it, behind only the all-important "lowering costs" goal. Therein, business respondents made it known that investments of time or money in IT improvements and bolstering their social media platforms are front of mind.

Jay Mathews, a collection manager for NACM, in a late 2010 interview for Business Credit noted that it was amazing how fast social media platforms like Facebook, Twitter and LinkedIn have evolved not just for personal use but business strategies as well.

"People [in the credit and collections industry] are now using Facebook a lot," Matthews told NACM, noting that he wouldn't have considered using it just one year prior for any business purposes. "People put all kind of personal details up there. It's fascinating to me the amount of details they put up and amazing what you can gather from Facebook, for example."

Brian Shappell, NACM staff writer