Archive for May, 2009

Geography of Offshoring is Shifting, According to A.T. Kearney Study

India and China continue as top offshoring destinations; but Central/Eastern Europe falls while Southeast Asia and Middle East countries rise

Deteriorating cost advantages and improved labor quality are driving a dramatic shift in the geography of offshoring according to the latest edition of global management consulting firm A.T. Kearney’s Global Services Location Index (GSLI), a ranking of the most attractive offshoring destinations.

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May 21st, 2009

Managed IT outsourcing ‘booming in Europe’

Managed IT outsourcing activity is increasing in the economic downturn, it has been revealed.

According to IT industry analyst Gartner, around 60 per cent of organizations in western Europe will outsource more IT and business process functions in 2009, while renegotiation of existing contracts will rise to more than 60 per cent.

Research carried out by the group indicated organizations are increasingly relying on managed IT outsourcing to achieve cost optimization. (more…)

May 11th, 2009

Outsourcing deals rising, but risks increase as focus narrows to cost cutting

Almost 60% of organisations in Western Europe say they will outsource more IT and business process functions this year, compared to last, according to an online survey by analyst Gartner. The analyst also predicts that prices of IT services outsourcing will decline by 5—20% through 2010.

“The outsourcing market’s growth has slowed from 2008, but today’s market is characterised by a high volume of activity across the board,” says Claudio Da Rold, vice president and analyst at Gartner.

“These outsourcing contracts very often include offshore work and intense renegotiations. Last year, the activity was primarily concentrated on renewals and new deals,” he adds.

And it’s all about cost reduction. More than 70% of respondents rated budget and cost containment as their top concerns in 2009, up 17.5% from 2008.

“The focus on cost reduction is driving a high usage of outsourcing and global delivery in Europe in 2009 and 2010. However, under the current economic and technological conditions prices are going to decrease, creating a market full of opportunities and challenges for both end-users and service providers,” comments Da Rold. (more…)

May 11th, 2009

Are You Ready for Transformational Outsourcing?

Extracting better value from an outsourcing relationship also means transforming the organization, not just keeping headcounts.

Outsourcing is not new anymore. In fact, it has become necessary to outsource either part or most of many organizations’ operations, especially in the current business climate. As ExecutiveBrief had predicted at the start of the year, the decision is not about whether to outsource or not; it is about outsourcing as a critical aspect to the survival of an organization.

However, signing up the help of third parties to cut costs and keep head counts is not the best way to approach outsourcing, no matter the economic climate. Instead of cutting costs, extract better business value from consulting engagements in terms of improving internal processes, learning from the experiences that consultants have earned from their exposures to past projects and clients, and optimizing productivity. (more…)

May 11th, 2009

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