Companies should take a long-term approach on their outsourcing decisions and view their service providers as strategic partners rather than pure suppliers, according to KPMG Consulting. Peter Ross, managing director of the consulting unit of auditing firm KPMG, said many companies had focused on short-term economics and overlooked the long-term benefits of a good outsourcing arrangement. 'I think it needs to be a win-win situation. So many people are looking for a win-lose deal,' he said. 'They need to remember it is not a one-off deal.' Outsourcing has gained popularity among large organisations which want to focus their resources on their core business, leaving support functions such as information systems, accounting and human resources work to outside contractors. While many are looking to cut costs by outsourcing tasks that may be performed more cost-effectively by outside specialists, Mr Ross said the main driver for companies to outsource is the lack of in-house expertise. Information technology (IT) is one such area where companies are finding it increasingly difficult to maintain a self-sufficient in-house operation, as they could not cope with the rapid pace of technological changes. IT accounts for the bulk of outsourcing work in Hong Kong, Mr Ross said, adding the business outsourcing market in Asia has seen the highest growth rates in the world, at between 25 per cent and 40 per cent. Describing the relationship between companies and their outsourcing service providers as one similar to marriage, he said companies need to carefully manage their performance expectations on an outsourcing relationship to avoid disputes. 'Most disputes arise from expectation gaps that are not met,' he said. He said firms should quantify performance standards as much as possible in outsourcing contracts, in addition to allowing for flexibility to accommodate unexpected changes in technology and the economic environment. Independent parties may need to be brought into the companies in cases where top management, which wants to roll out swift outsourcing decisions, faces resistance from middle management.