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29/10/2008

Offshoring advances: report indicates growing maturity of sector and its durability in a recession

A report published today by Intellect, the voice of the UK high-tech industries, highlights the increasing diversity of offshoring services and their use as standard business practice. The sector is shown to be well placed to handle an economic downturn because it delivers businesses efficiency, and therefore much-needed savings in difficult times. It looks ahead to the emerging world of global sourcing, where a range of business processes are increasingly performed in multiple locations and over global networks.
The report, written by Paul Morrison of Alsbridge a specialist outsourcing advisory firm, is built on an extensive survey of offshoring experts including: suppliers, end users, analysts and academics. The survey asked respondents to select the most important statements out of a list of 43 potential future trends. Key results include:

• 96% of respondents identify an increase in ‘multisourcing’ as a major future trend, where the variety of offshoring opportunities in multiple locations requires skilled management. This is reinforced by 94% who see a growing need for in-house sourcing expertise as another major trend.
• Similarly, 89% of respondents identify ‘from offshoring to global sourcing’ as a significant trend whereby they see a shift from point-to-point offshoring, to sourcing across a range of locations.
• Only 47% of respondents feel that a recession will result in more strident opinion against offshoring, coming 38th out of 43 trends. This is complemented by 77% of respondents who identified offshoring as a normal or unremarkable business.

• 89% of respondents highlight ‘onshore excellence’ as a key trend – that the UK will continue to be competitive in many activities which could theoretically be offshored to cheaper locations. While this is a reflection of the confidence in the deep pools of expertise close to home, it is not an indicative of a reversal in work already offshored. Indeed bringing work back to the UK is ranked the 2nd lowest trend.

• Public sector offshoring will not be significant in the coming years with, ‘the public sector joins the club’, one of the lowest scoring trends, ranked 37th out of 43.

Paul Morrison, Director at Alsbridge, said:

“Industry has given a clear indication that in the current financial climate offshoring remains an asset, not a liability. Offshoring is fast becoming a required business practice which offers crucial efficiency savings in a time of serious financial pressure.” 

Ben Andersen-Tuffnell, Programme Manager at Intellect said:

“The offshoring opportunities available to UK businesses are better than ever before. The increased quality and quantity of services available mean that the most savvy businesses will be the smart purchasers of services from a shifting global network. Taking advantage of this is set to be one of the crucial business skills of the future.”

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