Confidence in the outsourcing sector is booming despite the current economic crisis, according to new research from the National Outsourcing Association (NOA).
The NOA’s quarterly Outsourcing Confidence Index revealed that many outsourcers are more confident about their prospects now than they were in 2008, with 40% expecting to see revenue growth.
The survey also revealed that the UK outsourcing market saw growth of 8% in 2008, despite the worsening economic situation. The IT outsourcing sector saw 12% growth with the BPO sector showing growth of 6%.
With companies a little less sure about spending money during the recession and unwilling to commit to long-term contracts, 18% of outsourcing deals decreased in length over the last year. However, only 10% of outsourcing contracts have decreased in value, with 20% increasing and the remaining 70% staying the same.
“Outsourcing has traditionally been seen as a cost saving mechanism for business, so in times of economic turbulence it is not surprising that the industry is continuing to grow. However, with the increased pressure on companies to cut costs many are pushing through higher volume low cost contracts, over shorter time frames, which more often than not sets the outsourcing contract up to fail,” said Martyn Hart, Chairman of the NOA.
Hart added that the key to a successful outsourcing deal during the recession is to follow best practice. “Today, it is more important than ever that contracts work for both parties and by following best practice from the outset both the supplier and the outsourcer will be able to form a mutually beneficial partnership which is paramount to outsourcing success,” he said.
