More Firms Are Tempted To Outsource Their Jobs

A new report has suggested that major European outsourcing firms could lose large

financial institutions to Indian rivals over the coming few months.

According to Computer Weekly, research compiled by Deutsche Bank and the Value Leadership Group noted that some banks had grown frustrated by what they saw as an unwillingness to exploit the full potential of offshoring on the part of European third-party providers.

Most banks we polled complained that despite the service agreements, during the last financial year multinational firms like Accenture and IBM saw resource issues offshore and used a greater proportion of their onsite headcount, whilst executing application development projects, the study observed.

The survey also found that while the service quality offered by Indian IT firms is on a par with their competitors in Europe, they are more willing to move work offshore and find a freelancer, and as such are assuming an ever greater share of the market.

Earlier this month, John Worthy, a technology partner at law firm Field Fisher Waterhouse indicated that plans to ring-fence UK investment and retail banking operations could represent a major opportunity for IT contractors over the next few years.

It seems pharmaceutical firms are choosing to outsource more of their operations in an effort to cut costs and maximise efficiency too. According to Logistics Week, research conducted by DHL Supply Chain found many life sciences manufacturers were keen to boost flexibility and expertise by linking up with third-party providers. Data from Blue Fin Group recently revealed six of the worlds top 10 pharmaceutical companies had outsourced part of their US distribution operations already.

The survey indicated that regional factors in Brazil, Mexico, Canada and the US had all had an impact on developing well-organised supply chain mechanisms, while business overheads were also singled out as a key driver behind the move towards outsourcing.

These industry-wide opportunities and risks, combined with unique local factors, are pushing the evolution of supply chain models - now more than ever, said Luis Felipe Martinez, senior director of operations for the life sciences and healthcare industry at DHL Supply Chain.

Last week, right-of-centre think tank Policy Exchange claimed outsourcing some back-office duties could allow UK police forces to protect frontline services.

According to Reuters, the company, which provides services including procurement, payroll management and invoice processing, announced this week that the implementation of cost-cutting measures had ensured its operating cashflow was above expectations, and claimed anaemic growth would force companies to look to third-party providers to save money.

Growth in the developed economies is hard to come by for companies so they are looking at ways of taking costs out and where businesses are trying to take costs out, that always provides opportunities for people like ourselves, said chief executive Ken Lever. There are lots of growth opportunities out there.

by: Tim Bisley

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