List: 15 US Companies That Outsource to Stay On Top
The top US companies are what they are today because they know how to strategize. They have a clear vision of both their short- and long-term goals, a concrete timeline, and the right tools. Most importantly, they know when to get help from experts on certain aspects of the business.
A 2021 study shows that at least 68 percent of all companies in the US are outsourcing parts of their business to third-party providers. The trend is expected to go up, as experts project the outsourcing world to grow from a $92-billion industry in 2019 to a whopping $114-billion industry in 2025.
There are various reasons why the top companies outsource parts of their business operations, and it mostly depends on their specific needs and goals. Some outsource to innovate, some do it for flexibility, some for global expansion, but most of them outsource for savings.
The US companies that have found success in outsourcing services include startups, medium-sized businesses, and even the big names of the industry, such as Google and Facebook. Here is a list of top US companies that outsource part of their business operations.
Apple
The California-based tech giant behind iPhones and MacBooks has become a pioneer in today’s technology, thanks to the vision and genius of the late great Steve Jobs. While Apple designs all their products in their head office in the US, they have been outsourcing the manufacturing, software audit, and Software audits and performance tests to partners across the globe.
By outsourcing contracts to multiple partners offshore, Apple was not only able to reduce the cost of labor, but it also gained access to supplies and components needed to produce iPhones, iPads, Macs, and other wearable devices at a much lower cost. Apple has since decided to diversify its supply chain to Southeast Asia to leverage talent on a top outsourcing spot.
Microsoft
A pioneer of many innovations in the digital era, Microsoft has produced software, systems, and devices that both people and businesses use every day. But part of the success of Microsoft is its offshore teams as the Washington-based tech giant has been outsourcing internal support and IT services to its trusted provider in another country.
Outsourcing for over two decades has lifted heavy daily loads from Microsoft’s core team, allowing the company to focus on innovating their products and to keep up with current technological trends, such as artificial intelligence and cloud computing. To date, Microsoft continues to be among the top 5 IT companies in the US.
A company that took over the world by storm, Facebook has grown into one of the top businesses around the globe. While CEO Mark Zuckerberg keeps the programming and IT aspects of the business in-house, the company has benefitted from outsourcing content moderators, who filter dark, violent, and offensive content in the platform.
Since 2016, Facebook has been outsourcing customer support, IT services, and content moderation to their partners in the Philippines. They also outsource similar services to over 20 countries. With trusted offshore outsourcing partners doing an excellent job, Facebook was able to expand, acquiring other platforms such as WhatsApp, Instagram, Giphy, and more.
From being just the top search engine, Google has expanded into various ventures, including advertising tech, cloud computing, software, and hardware. Since 2011, the multinational tech giant has outsourced various operations, from support functions to IT services. In 2018, Bloomberg said Google’s outsourced employees outnumbered their core staff.
Google is just one of the many American companies that outsource to trusted providers in the Philippines. The company’s Manila office is one of its primary drivers of success not just in the country, but also in the Asia-Pacific region. Outsourcing has not only helped Google do well in the Asian market, but it has also created many jobs.
The world’s top employment-oriented social networking website has evolved over the years, but not without the help of outsourcing. With millions of users worldwide, LinkedIn leveraged outsourcing back-office functions, such as customer support, to third-party providers abroad, allowing the company to position itself as a top brand over the years.
When Microsoft completed the acquisition of LinkedIn in 2016, the platform had at least 450 users in 200 countries. With incredible innovation and strategy that included outsourcing parts of its business processes, LinkedIn grew exponentially just 5 years later, having over 800 million users worldwide today.
Citi
Citigroup Inc. is a trusted brand in the realm of finance. But the New York-based company had the help of outsourcing partners throughout its long history. Among the business processes outsourced by Citi are customer service and IT functions. Its partners in India and the Philippines have allowed the company to scale up their operations with relative ease.
Outsourcing allowed Citi to cater to more clients without sacrificing quality. In fact, just in the Philippines, Citi’s institutional business provides a range of services to over 950 multinational corporations and leading local corporates, including 90% of the top 20 companies listed on the Philippine Stock Exchange.
Procter & Gamble
Ohio-based Procter & Gamble offers its services in almost every part of the world. To maintain a huge global operation, the leading multinational consumer goods corporation outsources many parts of their operations that need specific expertise, such as sales and facilities management, to allow their core team to focus on innovation.
In 2014, CEO A.G. Lafley said the idea of outsourcing is not to replace P&G’s capabilities with offshore talent but to use their core talent more effectively for innovation and synergy. Today, with the help of its partners, P&G continues to thrive despite the pandemic, with an annual net sale of $76 billion in 2021, from $71 billion in 2020.
Cisco
Outsourcing has been a key strategy for Cisco to gain market leadership throughout the years. Now considered a worldwide leader in IT and networking, Cisco has found success in outsourcing network monitoring and management operations. It has also outsourced most of its physical infrastructure upgrades to partners across the globe.
With partners around the world supporting the business, Cisco was able to survive and thrive during the pandemic. In 2020, the first wave of COVID-19, usage of Cisco’s internet-of-things products grew 16% in manufacturing, 12% in utilities, and 10% in the public sector, something which would be quite difficult to achieve without outsourcing.
Pfizer
One of the most trusted brands in the biopharmaceutical industry, Pfizer has achieved success by outsourcing aspects of the business that need talent beyond their expertise, such as sales, and data management. The company has also outsourced research and development and manufacturing to help them position their brand on top of the global market.
Today, Pfizer plays a key role in the global vaccination drive against COVID-19, and the company has decided to outsource more of its vaccine and intravenous drugs production to make more space for the COVID-19 mRNA vaccines production locally. The accessibility of Pfizer’s COVID-19 vaccines in the US is proof that the strategy did them wonders.
Walmart
A household name in the American retail industry, Walmart has found success in partnering with many manufacturing firms across Asia. Intending to focus on innovating their retail services, the world’s biggest retail firm has also outsourced warehouse operations, software development, and even finance and accounting.
Walmart operates more than 11,700 stores under 59 company names in 28 countries around the world while managing an average of $32 billion in inventory. The retail giant’s outsourcing-aided supply chain management has become a model of success for other firms in the industry with global aspirations.
Wells Fargo
One of the world’s biggest banks and a Fortune 500 company, Wells Fargo, has been outsourcing business operations to partners offshore under the Business Process Outsourcing model. Some of the roles the company outsource include customer support representatives, payroll consultants and analysts, process engineers, and financial accountants.
Wells Fargo has a big presence in the Philippines where it continues to maintain BPO partnerships. While it has moved a few limited tech roles to India, the US-based bank said it will continue to operate and grow its team in Manila, which the company describes as a strategic location for business.
IBM
The New York-based tech giant is one of the largest employers in the United States, and 70 percent of its around 300,00 employees are outsourced. The International Business Machines Corporation (IBM) continues to rely on third-party providers for various IT functions, such as network management, and even for creating whole IT infrastructures.
IBM has expansive offices throughout the Philippines, and its partnership with outsourcing providers in the country has allowed the company to leverage the deep talent pool there, reduce overhead costs in IT infrastructures, and use Manila’s strategic location and economy to gain an edge in the ASEAN market.
Coca Cola
The world’s most popular beverage company has also been into outsourcing services. With more than 500 soft drinks brands, Coca-Cola outsources the bottling of its products around the globe through franchising. While Coca Cola produces the drinks themselves, the products are outsourced to bottling partners in different countries.
Coca-Cola has over 200 bottling partners around the world. This includes the Manila-based bottling and distributing partner Coca-Cola Beverages Philippines Inc. (CCBPI), which has 19 brands manufactured in 19 plants and distributed nationwide through 50 sales offices and distributions centers.
Hewlett-Packard
The Hewlett Packard Enterprise Company, simply known as HP, is one of the most successful computer and software services manufacturers in the world. Part of its global success is the Texas-based outsourcing partners in different countries. By outsourcing, HP leverages the quality of customer service and IT professionals in countries like the Philippines and India.
The Philippines, in particular, has become a “critical element” in HP’s expansion in the Asia-Pacific region, according to a company official. HP’s outsourcing journey in the Philippines began in the mid-1990s and has since delivered results for the company. It has also provided many jobs for local IT talent.
Nike
Today, Nike is one of the most popular brands across the globe. But its global success is hinged on its outsourced business operations offshore. Nike does not have a manufacturing plant of its own. It only does designs in its Oregon headquarters, while outsourcing manufacturing to partners in the Philippines, Vietnam, China, Indonesia, and Taiwan.
Following the outsourcing model, Nike has grown into the top footwear company in the world with a 47% market share that bests rivals Adidas, Rebook, Fila, New Balance, and Converse. Just in Asia-Pacific and Latin America, Nike footwear revenue amounted to $3.6 billion in 2021, significantly higher than $2.9 billion 5 years earlier.
Outsourcing hotspots
When it comes to outsourcing countries like India, Brazil, Ukraine, and Poland come to mind. But one of the top outsourcing destinations for US companies is the Philippines. In fact, most of the above-mentioned firms have outsourcing partners in Manila.
The Southeast Asian nation has a very mature outsourcing industry with over 780 business process outsourcing companies serving a global market. Aside from a very low labor cost, the Philippines offer a deep and diverse talent pool with a great cultural fit.
READ MORE: A guide to outsourcing in the Philippines
More than back-office functions, many US companies have found success in outsourcing high-end roles, such as accountants, architects, engineers, graphic designers, virtual assistants, and software developers, to the Philippines.
Outsourcing is a strategy that can catapult your business to the top, regardless of size. The key is to first have clear goals for outsourcing. From there, it is just a matter of finding the right partner that can deliver flexible results tailor-fit to your needs.