US Technology Outsourcing to Reach Record Levels in 2013, According to BDO … – Fort Mills Times

Sixty-one percent of CFOS say manufacturing will be, once again, the most heavily outsourced function for U.S. technology companies despite recent rises in U.S. manufacturing in other industries. There have been a few notable examples of technology companies – including Apple, Lenovo and GE – bringing manufacturing back to the U.S. Southeast Asia maintains its position as the leading outsourcing destination despite supply chain interruptions that plagued the region over the past few years. Following manufacturing, R&D is the second most expected outsourced function (56 percent) followed by distribution (42 percent) and IT services and programming (30 percent).

These findings come from the sixth-annual BDO Technology Outlook Survey, which examined the opinions of 100 chief financial officers at leading technology companies throughout the United States. The survey was conducted from December 2012 to January 2013.

Other major findings from the 2013 BDO Technology Outlook Survey include:

• The U.S. tax environment is not hindering international growth.
  Though technology companies are using outsourcing to gain a
  competitive advantage, 61 percent of U.S. technology executives
  surveyed do not believe that the U.S. tax system is hindering their
  ability to compete in a global marketplace. In fact, domestic tax
  concerns, including corporate tax rates (39 percent) followed by
  taxation of overseas activities (21 percent), are the primary concerns
  related to the U.S. corporate tax reform. However, technology CFOs do
  not believe that a repatriation tax holiday would incentivize them to
  bring outsourced services and operations back to the U.S.: 72 percent
  of executives surveyed said it would not change their plans in 2013.
• China remains top outsourcing destination. China (38
  percent) is still top-of-mind for technology CFOs surveyed, however
  many are condensing the regions to where they outsource. In 2012, CFOs
  reported they were outsourcing to 8 different counties; in 2013, CFOs
  surveyed only noted outsourcing to six countries, excluding Western
  Europe and Latin America in this year’s results. Most outsourcing
  dollars are still directed toward Asia, with India as the second most
  popular destination followed by Eastern Europe and Russia (29 and 16
  percent, respectively).
• Sales and marketing, research and development are key areas for
  employment growth in 2013. As U.S. technology companies
  increase hiring in 2013, sales and marketing (32 percent) and research
  and development (30 percent) are the leading positions employers are
  looking to fill. Manufacturing is also on the rise, with 27 percent of
  CFOs saying they will add the most new positions in that area this
  year.

Material discussed in this release is meant to provide general information and should not be acted on without professional advice tailored to your firm’s individual needs.

About BDO Technology and Life Sciences Practice

BDO is a national professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. Guided by core values, including competence, honesty and integrity, professionalism, dedication, responsibility and accountability for 100 years, we have provided quality service and leadership through the active involvement of our most experienced and committed professionals.

BDO works with a wide variety of technology clients, ranging from multinational Fortune 500 corporations to more entrepreneurial businesses, on myriad accounting, tax and other financial issues.

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