Nov

18

Across the Atlantic, things are definitely heating up for outsourcing.

Alsbridge, a Dallas consulting company on outsourcing and benchmarking, has seen many changing trends for the outsourcing model in the United States as well as in Europe.

In the United States, though most Alsbridge clients are large businesses, founder and CEOS, the consultancy company is receiving a surge in demand for its services from small business owners and entrepreneurs, all looking for any means to reduce costs to keep their businesses afloat during these turbulent economic times.

“It’s classic for small businesses to outsource in waves because the current financial crisis is acting as a catalyst for companies to seriously consider outsourcing, we are riding that wave.”

- Ben Trowbridge, Founder and CEO, Alsbridge

Outsourcing is also booming in Europe where it appears, based on a previous Alsbridge study, the continent is now bigger than the Americas in value and number of IT outsourcing deals. Last 2007, Europe signed 220 major contracts worth £25 billion collectively, and the Americas signed 194 contracts, worth £16 billion in total for the same year.

“Europe accounted for 36 percent of all outsourcing deals – both IT outsourcing and business process outsourcing (BPO) – in quarter one.”

- Tony Adams, Senior manager, Alsbridge

However, with this increase in demand comes an increase of challenges. Company buyers are now pressuring outsourcing vendors for upfront savings and flexible contracts. Outsourcers will have to be more agile to survive, drive in savings as well as more value if they hope to avoid the risk of failed contract or possible litigation.

The heat is also on the buyers considering the potential of outsourcing for their businesses, too.

Trowbridge warns that the process of screening third-party providers and implementing the business process outsourcing takes research and time as owners will need to set the scope of their outsourcer’s duties, evaluate costs and locations, and decide how much flexibility and control they require.

As it is, business owners are in a struggle to spare the time and effort it takes to make outsourcing work for them while saving their own business’ interests.

They also have to prepare contingency plans and include these into the contract in case their outsourcing provider goes belly up or under-deliver.

The global recession affects everyone, no one is completely safe. Everyone is bound to get burned.

References:

  1. Chapman, Siobhan. “Downturn drives agile outsourcing demands.” 17 November 2008. Computer World UK. Accessed 17 November 2008. Link here
  2. Maltby, Emily. “Overseas outsourcing heats up again.” 11 November 2008. Cable News Network, Accessed 13 November 2008. Link here

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