Outsourcing predicted to weather the economic storm

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A report just published by the trade association for the UK technology industry has found growing maturity of the IT outsourcing sector will ensure its durability in a recession.

Intellectsaid outsourcing was well placed to handle an economic downturn because its research found it is perceived to deliver businesses efficiency and much-needed cost savings.

Paul Morrison, the report author and director of specialist outsourcing advisory firm, Alsbridge interviewed 94 offshore outsourcing experts, including suppliers, end users, analysts and academics about which, out of 43 potential future trends, were likely to materialise.

Only 47 per cent of the survey respondents felt a recession would result in any offshoring backlash, placing it 38th out of the 43 trends. This was reinforced by 77 per cent of respondents who identified offshoring as a normal or unremarkable business.

A further 89 per cent also highlighted “onshore excellence” as a key trend, suggesting that the UK will continue to be competitive in many specialist outsourcing activities that could potentially be offshored to cheaper locations.

This largely optimistic consensus led respondents to identify a number of emerging trends deemed most likely to lead the sector’s growth. A whopping 96 per cent of respondents identified an increase in ‘multisourcing’ as a major future trend, where the variety of offshoring opportunities in multiple locations requires skilled management. And this was reinforced by 94 per cent who saw a growing need for in-house sourcing expertise as another major trend.

Similarly, 89 per cent of respondents identified ‘from offshoring to global sourcing’ as a significant trend, where see a shift from point-to-point offshoring, to sourcing across a range of locations emerges. And the idea of bringing outsourced work back to the UK was ranked the 2nd lowest trend.

One potential blip on the horizon predicts the public sector is losing it appetite for offshore outsourcing, as the statement ‘the public sector joins the club’ was one of the lowest scoring trends, ranked 37th out of 43.

Morrison commented: “Industry has given a clear indication that in the current financial climate offshoring remains an asset, not a liability. Offshoring is fast becoming a required business practice which offers crucial efficiency savings in a time of serious financial pressure.”

Ben Andersen-Tuffnell, Intellect programme manager, added that UK businesses should make sure they have the skills to capitalise on the growing offshoring opportunities available. “The most savvy businesses will be the smart purchasers of services from a shifting global network,” he said.

A separate survey earlier this week also suggested outsourcing will see a boost from the economic troubles.

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