Outsourcing: Others Say It Will Grow

Global expenditure on outsourcing services will continue to rise, 'back-sourcing' will become minimal, client control will increase along with their ability to manage contracts, and any existing 'fear' of outsourcing will soon dissipate.

These are the finding of a study put out by LogicaCMG. The study, undertaken by Leslie Willcocks of Warwick Business School and Sara Cullen of Cullen Group, encompasses over 1,200 organisations from across Europe, USA and Asia-Pacific, compiling views into a list of 'Top Ten' predictions for the next five years.

The study has also highlighted the importance of the CEO in executing successful outsourcing initiatives and notes that one-third of outsourcing deals could fail due to lack of CEO involvement.

Outsourcing of IT and other business processes is likely to move from a 2005 average of 12 per cent of organizational costs to 20 per cent by 2008.

Business Process Outsourcing (BPO) will overshadow and incorporate IT outsourcing and mainstream BPO expenditure is likely to grow worldwide by 10 per cent a year from $140 billion in 2005 to over $220 billion by 2010.

Outsourcing is here to stay and 'back-sourcing' will be minimal at a tenth of contracts, which come up for renewal. The most popular course of action at the end of a contract will continue to be to extend it with revisions, a quarter being re-tendered. In addition to this, the study states that outsourcing will help 'insourcing' and market disciplines will determine in-house service provision.

Comment: I hope this isn't true.

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