January 6, 2009

Hackett: Offshoring of Back Office Jobs is Accelerating;Global 1000 to Move More than 350,000 Jobs over Next Two Years

Finance Now Being Globalized Faster than IT for the First Time; By 2010, 1 in 4 IT Positions Will Be Located Offshore

ATLANTA & LONDON, January 6, 2009 - Global 1000 companies are significantly accelerating their movement of back office jobs to India and other low-cost labor markets, according to new research from The Hackett Group (NASDAQ: HCKT).

According to Hackett, over 350,000 jobs in corporate finance, IT, HR, and procurement will move offshore in 2009 and 2010 alone, bringing the total number of back office jobs in these key areas being done offshore to over 800,000. For the first time, finance positions are now moving offshore more quickly than corporate IT jobs.

By 2010, 1 in 4 jobs in IT overall will be located offshore, Hackett's research found. More than 1 in 5 transactional jobs in finance will be located offshore as well, along with about 1 in 6 transactional jobs in procurement and human resources.

Hackett's research also found that as companies accelerate their use of offshore resources, the recession is driving hiring freezes and staff cuts at home. In finance and IT, about 50% of all companies surveyed are freezing hiring, cutting staff, or doing both simultaneously.

This activity is balanced somewhat by the effect of globalization as the engine of economic growth, Hackett's research explained. Over the past five years, the top Global 1000 companies have seen global revenue growth running 50% higher than local & regional revenue growth.

According to Hackett's research, typical Global 1000 companies currently realize over $16 million in annual savings through offshoring of back office operations. This number will grow to nearly $30 million by 2010. But this still represents only about a third of the total potential cost savings, which could reach up to 17% of total G&A costs. Hackett's study, completed in Q4 of 2008, captured information from 200 global companies.

"These numbers need to be taken in the context of this mega-trend that will impact all companies that must compete on a global basis,"said Hackett Chief Research Officer Michel Janssen. "Current economic uncertainty creates an even bigger demand for companies to lower their cost structures and the use of low cost countries has moved into the mainstream of global business models.

"Companies are clearly taking aggressive action, accelerating the pace of their globalization efforts, particularly in finance and IT, while at the same time implementing hiring freezes and/or staff cuts for their other back office staff positions,"explained Mr. Janssen. "In most cases, these companies already have a global footprint, and are simply using outsourcers or captive shared services they already work with to handle new business process or work with new business units."

Hackett President Wayne Mincey added that "It's important to note that there's more to globalization than the movement of back office jobs offshore. Growth in exports has been a major contributor to the performance of most companies in the past few years, and this has provided significant balance. One of the key's to getting the North American and European economies back on track will be executing business strategies that take full advantage of labor cost reductions, but more importantly, drive top-line opportunities that globalization brings which benefits both the company and the overall economic health."

About The Hackett Group

The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory firm, is a leader in best practice advisory, benchmarking, and transformation consulting services, including shared services, offshoring and outsourcing advice. Utilizing best practices and implementation insights from more than 4,000 benchmarking engagements, executives use Hackett's empirically based approach to quickly define and prioritize initiatives to enable world-class performance. Through its REL brand, Hackett offers working capital solutions focused on delivering significant cash flow improvements. Through its Hackett Technology Solutions group, Hackett offers business application consulting services that helps maximize returns on IT investments. Hackett has worked with 2,700 major corporations and government agencies, including 97% of the Dow Jones Industrials, 73% of the Fortune 100, 73% of the DAX 30 and 45% of the FTSE 100.

Founded in 1991, The Hackett Group was acquired by Answerthink, which was renamed The Hackett Group in 2008. The Hackett Group has global offices in the United States, Europe and India.

More information on The Hackett Group is available: by phone at (770) 225-7300; by e-mail at info@thehackettgroup.com; or on the Web at www.thehackettgroup.com.