ZEW’s FAZIT Company Survey – Baden-Württemberg’s Companies Outsource To Providers Within The Federal State

Business Process Outsourcing (BPO) is a common practice used by a total of 42 percent of companies in Baden-Württemberg working in the IT and media sectors or IT user industries. This means, they partly or completely outsource business processes to external service providers. Accounting, human resources and IT are outsourced most often. An interesting observation is that 85 percent of these Baden-Württemberg companies outsource to companies which are also located in the federal state of Baden-Württemberg. These are the results of the sixth representative FAZIT Company Survey, carried out by ZEW in the summer of 2008. The results of the survey, in which over 1,000 companies participated, have been published in the new ZEW Forschungsband.

Another 12 percent of Baden-Württemberg’s companies practising BPO outsource their business processes to providers throughout the Federal Republic. Offshoring, i.e. outsourcing to providers in other countries, however, is rare.

"Baden-Württemberg’s companies mainly outsource to companies which have service or management functions, but are less familiar with the underlying core business", says ZEW researcher Bettina Müller. A total of 47 percent of the outsourcing companies, for example, outsource their whole or part of their accounting department. 43 percent of the surveyed companies outsource their IT sector and 37 percent their human resources department, in part or as a whole. Production, marketing, transport or logistic are also often given into the hands of third parties. At least one third of the companies outsource at least parts of these business processes. Distribution, research and development, customer service and purchasing, however, usually stay in the respective companies.

Ninety percent of outsourcing companies in Baden-Württemberg mainly outsource their business processes to be able to make use of specialists’ knowledge. Sixty-eight percent outsource some of their business processes to be able to better focus on their core business. In many cases, however, external factors play an important role. Large companies especially are influenced by a current or expected shortage of highly skilled workers (51 percent). Furthermore, faster internet connections and improved software applications are important external factors contributing to a company’s decision to outsource business processes.

The FAZIT Company Survey

The "Research Project for Current and Future-Oriented IT and Media Technologies and their Use in Baden-Württemberg" (FAZIT) is a non-profit research project, sponsored by the Federal State of Baden-Württemberg. More than 1,000 companies from Baden-Württemberg participated in the survey in the summer of 2008. These companies are situated in the IT and media sector (software, data processing services, IT and media hardware, telecommunication, audiovisual media, printing and publishing, advertisement and market communication, content services) as well as other branches working with IT and media technologies (chemistry, engineering, medical engineering, metrology, control engineering, auto industry, traffic, banking and insurance industry, research and development and technology service providers).

For further information please contact

Dr. Bettina Müller, Phone:+49/621/1235-352, E-mail: bettina.mueller@zew.de