Partner Article

Outsourcing industry confident over next 6 months

Suppliers of ‘back office’ support services are predicting better business conditions over the next six months, according to research from KPMG.

The quarterly study of the outsourcing industry found that 59% of firms expect the pace of customer demand to increase between now and April 2013.

Based on conversations with their clients, the majority of suppliers believe IT will be the functional area most likely to seek support, followed by requests from finance and accounting teams, HR and customer care.

89% of respondents suggested they would be able to increase the scope of current projects over the next 12 months.

Overall trends in outsourcing appeared to be changing, as during recession the trend was to focus on offshore services, and now onshore outsourcing is regaining popularity. Despite the optimism, the research found only 38% of respondents demonstrated ‘actual growth’ on the 3 months to the end of September.

Richard Trott, Shared Services and Outsourcing Regional Lead for the North of England, says: “It is encouraging to see that suppliers are more bullish about business prospects than they have been for some time, but whilst we are not exactly in a recession, we are not quite celebrating a recovery either.

“In many cases business optimism is based on first-stage conversations with clients and it will be telling how many translate from conversation to contract.

“Despite officially being out of recession, negative global economic conditions continue to weigh heavily on organisations’ decisions on how, when and where to invest in outsourced support.

“With the past Quarter showing weak signs of growth, the only way to inspire confidence is for suppliers to ensure they are constantly on top of their game. If they unable to meet demands, we are likely to see more conversations and fewer contracts as clients maintain a ‘wait and see’ approach to the services they sign up for.”

Elsewhere in the findings, 70% of suppliers suggested that projects are not managed properly during the transition phases, and 56% said they were not adequately resourced.

This was posted in Bdaily's Members' News section by Tom Keighley .