23 February 2010 | Nick Martindale
UK government spending cuts are likely to lead to a rise in outsourcing and offshoring of IT projects, a report by research firm TechMarketView predicts.
The study showed that impending budget cuts mean the public sector will be forced to consider different ways of slashing costs, regardless of which party wins the next election.
“There will be some opportunities but the strongest growth is likely to come in IT and business process outsourcing as various public sector departments look to do more with private sector partners in order to reduce costs and improve efficiency,” said Tola Sargeant, research director.
“As the decade progresses we expect to see a gradual trend towards a greater use of offshoring. Things that were unthinkable a few years ago suddenly become a possibility.”
The findings echo those from the National Outsourcing Association last month.
Cardiff Council’s 15-year contract with the Indian-based outsourcer Tata Consultancy Services was an example of the kind of arrangement which could become commonplace, said Sargeant.
As public sector bodies seek to extract maximum value from suppliers, the expectation is that procurement frameworks and the use of e-procurement packages are likely to become more popular.
“The government is going to want the best possible price and the best quality terms and conditions,” she added. Sustainability and green IT projects will also remain prominent.