Businesses Are Keen To Outsource It Functions
Newly released figures show that retail companies have ramped up their pending on IT in recent months
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According to a report by Computer Weekly, businesses in the retail, manufacturing, telecoms and media sectors across Europe, the Middle East and Africa (EMEA), spent more on IT outsourcing over the first three financial quarters of 2011 than in the whole of 2010.
Retail firms, in particular have turned to outsourcing specialists in order to attempt to gain an advantage over their competitors. Speaking to Computer Weekly, Martyn Hart, Chairman of the National Outsourcing Association said: "Outsourcing in the EMEA retail sector has risen 600% on last quarter, and 75% year-on-year. This is due to major retail players seeking competitive advantage by adopting high-tech IT solutions and infrastructure upgrades.
Mr Hart said supermarket giant Tesco was one example of a company that has made a significant investment in outsourced technology services. In August the company signed an eight-year technology deal with Microsoft, which will supply the supermarket with the latest versions of its products and services.
Outsourcing is not only popular with retail companies either, as Irelands Department of Health has confirmed its seeking to outsource several senior management positions at two hospitals to third-party providers over the coming months.
According to The Journal, vacancies at Mid-Western Regional Hospital in Limerick and University Hospital Galway have been put out to tender, with four out of the five bidders based in Britain. External staff hired will be answerable to the Health and Safety Executive (HSE).
In an interview with Galway FM, Health Minister James Reilly explained that an attempt at internal recruitment had proven largely unsuccessful, and insisted the decision to outsource managerial roles would not have a detrimental impact on the delivery of patient care. Were bringing in external managerial expertise to do three things: manage the hospital, grow new management underneath them, and upskill management, he said. For me and my department, the bottom line is about patients.
Last week, insurance giant Aviva announced plans to outsource 400 jobs at its Dublin base to contractor Capita, while a further 6,000 of its 2,000-strong Irish workforce are expected to be relocated to Britain as part of a drive to make efficiency savings.
And, it doesnt end there, as Edinburgh City Council is reportedly set to outsource its waste and cleaning services to a third-party provider, which is currently undergoing a major restructuring.
According to the Scotsman, the local authority is poised to hand the contract to Lancashire-based firm Enterprise, owned by private equity firm 3i. The company announced earlier this year it had sold its debt to a consortium of financial institutions including Goldman Sachs, Angelo Gordon and KKR.
In these challenging times it is essential that the council critically examines every opportunity to enhance services and improve efficiency, said council leader Jenny Dawe. Thats why we embarked on a detailed exploration of alternative models of business for the council to engage in.
Councillors will meet on Thursday to discuss the proposals, which the local authority hopes will provide savings of 71.6m. Enterprise recently agreed a 23-year contract to provide environmental and facilities management for Peterborough Council.
by: Tim Bisley
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