Outsourcing expected to expand

3 August 2009
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04 August 2009 | Jake Kanter

Confidence is returning to the outsourcing market as organisations step up cost-cutting, a report from the National Outsourcing Association (NOA) has found.

The survey of 50 business process and IT outsourcing professionals reported that 40 per cent were more confident about the marketplace this year than in 2008.

More organisations are turning to outsourcing to analyse and cut costs. It also found there was greater scope to extend existing outsourcing deals and the increased importance of the CFO was driving growth in the market.

IT outsourcing showed the largest growth in revenue last year, up 12 per cent in the fourth quarter of 2008 compared with the same period in 2007. Business process outsourcing (BPO) - including procurement - only grew by 6 per cent.

This is expected to change this year with outsourcing services suppliers predicting a rise in BPO as more businesses try to find ways to cut costs.

NOA chairman Martyn Hart said: "Outsourcing has traditionally been seen as a cost-saving mechanism for business, so in times of economic turbulence it is not surprising the industry is continuing to grow."

In a separate report out yesterday, the SAP UK and Ireland User Group found more IT buyers would like greater access to and interaction with senior management at technology vendors. It is thought greater communication at board level means buyers could increase their influence or solve problems more easily.


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