taken from todays computer weekly


UK hits top spot in global outsourcing survey

The UK has overtaken the US as the leading national market for new outsourcing contracts for the first time, according to new research.

The UK represented over 37% of the market for major outsourcing contracts awarded worldwide for the first three months of 2005, followed by the US (25%) and Asia Pacific (4%), the quarterly analysis of the outsourcing market by outsourcing advisory firm TPI found.

Europe’s share of the total value of new outsourcing deals worth more than £27m more then doubled in the first three months of 2005, accounting for 70% of around £7.5bn worth of contracts awarded. In the same period last year Europe’s share of the outsourcing market was 34%.

“While some may argue that Europe’s €2.4bn mega deal – the Reuters/BT contract – skews the results for this first quarter, Europe still accounted for well over half of new contracts worldwide – a high point for European outsourcing,” said Duncan Aitchison, managing director, international with TPI.

The rise of offshore outsourcing deals continued during the first three months of this year. TPI said it saw a 17 percentage point increase in the proportion of outsourcing deals involving an element of offshore servicing compared to 2004.

Meanwhile, the so-called Big Six suppliers in the outsourcing market – Accenture, ACS, CSC, EDS, Hewlett Packard and IBM – saw their combined market share fall by 57% in the first quarter of 2005. They won only 27% of major contracts awarded in the first quarter of this year, compared with 63% in the first quarter of 2004. Non-Big Six firms have secured 64% of new deals against 45% a year ago.

Recent TPI research conducted among UK senior management responsible for offshore outsourcing decisions found that 60% see the large Indian outsourcing providers as offering a service to rival that of Western suppliers irrespective of the cost savings.

Is this good news? Offshore outsourcing? It doesn't sound like it.

Is this good news? Offshore outsourcing? It doesn't sound like it.

It depends whether you believe in free trade or not I guess.

The upside would be cheaper goods and services for British consumers and more profits for british companies while at the same time helping the economic development of poor countries. Also it frees up labour in this country to do higher value jobs making us more prosperous.

The downside is that this move to higher value jobs can only take place if the people made redundant by outsourcing have the neccesary skills to get these better jobs, our education system and the general population needs to be flexible and efficient to allow this to happen.

My company has made use of outsourcing; primarily software engineers from Bangalore in India. Whilst some of them are very competent a significant proportion weren't and communication was a BIG problem. We were both speaking English but a lot of them had very heavy accents and they couldn't understand us either - which was quite problematic when communicating very technical concepts. The idea works if you can bundle up a piece of work, hand them the spec and say get-to-it. With smaller projects the extra overhead of managing and co-ordinating them was barely worth any savings over having a skilled team in-house. Thankfully my office now acts as an out-sourcing branch itself - in place of the over-paid US developers!

i'm confused, does this mean the UK wins 37% of all global business outsourced, or that the UK awards 37% of all global outsourcing contracts?

I think awarded. Yay for Britain. :)

Goooooooooo Accenture!

the economist disagrees with computer weekly then

which source has more authority mmmmmm........

the economist disagrees with computer weekly then

which source has more authority mmmmmm........

Looking at the article again I think it is just talking about the IT sector.

That list of the "Big Six" is outdated now. When CapGemini won the ASPIRE contract (IT for the Inland Revenue and the new HMRC department) they won the largest single IT contract in UK history at around £4 billion and became one of the world's five largest outsourcing companies.

im always a little confused by offshore outsourcing as companies say its important to stay competitive with foriegn rivals from other countries, but what japanese corporation sticks call centres in china?

That wouldn't work too well because the Chinese do not speak Japanese.

But my Sony products are made in China.

:)

exactly lou, so where is the competing with foriegn companies when they are unable to do it?

It's about profit. The more prfit they make the more they can compete.

It is just a job, eventually everyone everywhere is going to have a formal job of some description so people like the Daily Express should get over it! Oh and while they are at it they should start moaning at the real problems such as the lack of skills and imagination displayed by a large proportion of this countrys workforce and the imbalance of social and environmental safety nets across the world

exactly lou, so where is the competing with foriegn companies when they are unable to do it?

Competing isn't just about keeping up with foreign companies, it's about getting one over on them wherever possible. If we can do something that the Japanese companies can't then that is a competitive advantage.