Jinfo BlogOutsourcing - quality or cash?

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By Tim Buckley Owen

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Outsourcing is back to the fore - and it's not just about saving money. As FreePint invites responses to its joint survey with Outsell of outsourcing in the information industry, several recent reports could offer guidance as to what the future may hold. Providing some initial context, an Economist Intelligence Unit report, Global Firms in 2020: the Next Decade of Change for Organisations and Workers, foresees a trend towards a leaner, more contract-based workforce.

Sponsored by the Society for Human Resource Management, it finds 67% of the senior executives it polled expecting to hire on contract or outsource work rather than employing full time staff. Three further reports, specifically on outsourcing, move progressively closer to the territory occupied by information professionals.

But they don't always agree on what its impact might be. Business process outsourcing (BPO) has traditionally been seen as a vehicle for reducing costs, says the Forbes Insight report Value-Based BPO in a Resurgent Economy. Over 60% of executives believe that its importance in supporting their business model will grow - but they are increasingly evaluating its success in terms not of cost savings but of its long term business value in areas such as productivity, competitiveness and customer service (registration required).

Previewing its Outsourcing & Vendor Management Summit earlier this month, IT services industry specialist Gartner identified 10 forces impacting IT outsourcing - including inevitably the Cloud, which it said would allow IT service users to focus on what the services provide, rather than how they're hosted.

Greater emphasis on business intelligence, analytics and pattern recognition would be what demonstrated IT's value to the enterprise, it said. Closest to home for information professionals - and striking a slightly more cautious note - is a new analysis from knowledge process outsourcing (KPO) specialist Evalueserve.

Back in 2005, it predicted that KPO industry revenues would reach $16.7 billion by 2010-11 - but the recession means that it now doesn't expect the $17bn target to be hit until 2013-14. Although Evalueserve acknowledges that it seems counterintuitive, offshoring of knowledge services actually slowed during the recession as firms switched instead to survival mode. And, somewhat contradicting the Forbes and Gartner reports, it also suggests that business process and IT outsourcing have become strictly cost saving commodities, whereas KPO has increasingly been about transformational opportunities (http://digbig.com/5bcjyr and follow link to 1 September).

Information managers may care to chew on these various findings as they contemplate their own response to the FreePint/Outsell survey (participate at http://digbig.com/5bchey) - not least because the changes won't necessarily be easy. As the EIU report's editor Gilda Stahl explains, assessing the needs of competing workforce factions and business imperatives while maintaining morale and company loyalty will be 'an incredible balancing act'.

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