Outsourcing Toolkit

Outsourcing boom expected this year

Nick Heath silicon.com

Published: 08 Jan 2008 08:42 GMT

A weak global economy and the need for businesses to cut costs are predicted to drive outsourcing growth up in 2008.

More than half (53 percent) of companies plan to increase outsourcing spending in 2008, up from 38 percent in 2006 and 48 percent in 2007, according to a survey of 250 IT professionals by US-based outsourcing and business process outsourcing (BPO) company Syntel.

Bharat Desai, chief executive of Syntel, said outsourcing is one industry that will not suffer from the crisis in the credit markets.

Desai said in a statement: "In a weak or uncertain economy, companies look for technology solutions that will increase productivity, efficiency and savings."

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The link between outsourcing and savings was reinforced by a separate study by BPO provider Sutherland Global Services, which found cost reduction and the ability to provide a variable cost model was in the top five reasons for outsourcing for more than 90 percent of businesses it questioned.

The study of BPO trends for 2007 surveyed major global companies in the insurance, banking, telecom, retail and banking industries. It found that tech support and customer care departments continue to be the most commonly outsourced divisions, standing at more than 60 percent and 40 percent respectively, and that India and the US are the most popular locations, chosen by about 70 percent and 60 percent of respondents.

Data and site security topped the list of what companies want from their outsourcers for 80 percent of businesses, with an understanding of process and industry experience close behind.

Credit: Outsourcing boom predicted in 2008 from silicon.com