Feeds

In praise of outsourcing

What's good for the economy is good for you. Oh yes

  • alert
  • submit to reddit

Combat fraud and increase customer satisfaction

Outsourcing will become ubiquitous within five years and has the potential to increase UK gross domestic product by a cool £16bn and close the country's productivity gap by 10 per cent.

This upbeat assessment was voiced in a study published today by LogicaCMG which focuses on the macroeconomic impact of outsourcing in the UK.

According to the study, UK companies have the potential to outsource 46 per cent more than current levels by 2008. If they do so they will improve their productivity levels by 2.7 per cent and the UK's historic 28 per cent productivity gap with its main global competitors would be cut by 10 per cent.

The management and consultancy firm's research, The Potential Economic Impact of Increased Outsourcing, estimates British business could see £1.7bn in additional profits while GDP could rise by £16bn if more companies outsourced over the next five years.

The report indicates that real consumer expenditure could be boosted to £4.4bn by 2008, equating to an extra £177 per household, per year, in the UK.

Outsourcing is fast becoming an intrinsic part of how we do business globally, according to Kirk Smith, outsourcing strategist, LogicaCMG. "In five years, we could see the terms 'business process outsourcing' and 'offshore' becoming standard business practice and we will no longer have to label them," he said.

"The increased use of outsourcing will lead to the development of global service networks. Companies will no longer be preoccupied with where services are delivered from, as long as the supplier (or chain of suppliers) meets their current and changing business requirements."

Douglas McWilliams, chief executive, cebr, which wrote the report on behalf of LogicaCMG, cited government data showing that UK productivity grew at 1.9 per cent per annum between 1995 and 1999. He said the study suggests that if companies in the UK were to fully embrace outsourcing, the rate of productivity growth could increase to 2.4 per cent per annum.

"Overall, the benefits of outsourcing for individual companies and their shareholders have been well documented, but I think a lot of people will be surprised to see how the benefits could extend across, and strengthen, the entire economy over the longer term," he said.

Kirk Smith added that the trend towards outsourcing is inexorable, as the prevailing harsh economic climate demands that companies must keep shareholders happy in their use of capital and willingness to slash operational costs: "The critical long-term benefit of outsourcing is in enabling a business to focus this core talent on where and how it can create the greatest value," he said. ®

Related stories

Lehman moves help desk out of India
Cambodian data entry outfit provokes 'sweatshop' slur
IT outsourcing: manufacturers concentrate on service

3 Big data security analytics techniques

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
Kingston DataTraveler MicroDuo: Turn your phone into a 72GB beast
USB-usiness in the front, micro-USB party in the back
AMD's 'Seattle' 64-bit ARM server chips now sampling, set to launch in late 2014
But they won't appear in SeaMicro Fabric Compute Systems anytime soon
Microsoft's Nadella: SQL Server 2014 means we're all about data
Adds new big data tools in quest for 'ambient intelligence'
BOFH: Oh DO tell us what you think. *CLICK*
$%%&amp Oh dear, we've been cut *CLICK* Well hello *CLICK* You're breaking up...
Inside the Hekaton: SQL Server 2014's database engine deconstructed
Nadella's database sqares the circle of cheap memory vs speed
prev story

Whitepapers

Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.