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E&Y - Outsourcing in Europe: An in-depth review of drivers, risks and trends in the European outsourcing market - November 2013

by General Think Tank Officer, Minister of Change, Corporate Doctor, Technology Evangelist, Management Terrorist, Big Data Quality Cleric, Matrix Tester, Unconventional Economist, ETF | Forex | Indices | Commodities casual trader, Information broker at Your workplace on Nov 21, 2013

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E&Y - Outsourcing in Europe: An in-depth review of drivers, risks and trends in the European outsourcing market - November 2013 ...

E&Y - Outsourcing in Europe: An in-depth review of drivers, risks and trends in the European outsourcing market - November 2013

This research highlights that cost-efficiency remains the main driver for consideration and implementation of outsourcing initiatives, with 42% of respondents listing cost reduction among their top three reasons for outsourcing. Cost is the key driver for first generation outsourcing initiatives. In Northern Europe (Sweden, Norway and the UK), access to specific knowledge, expertise and tools are also key drivers.
With cost reduction, efficiency and quality improvements being listed as the top three objectives when outsourcing, it is surprising to note that services are transitioned to an external outsourcer on an as-is basis, with no transformation of the service.
When it comes to the retained organization, almost two-thirds (62%) of respondents employ staff who were not responsible for the service prior to outsourcing, indicating that most understand that the skill set required to manage an outsourced service is different to operationally delivering that service.
Approximately 75% of IT services remain in-house, indicating that even a mature market such as ITO demonstrates large potential for growth in the coming years.
There is no clear trend balancing local and regional economic factors with acceptance of offshore or global delivery models, with Spain, and notably Sweden, being the least adoptive of near and offshore delivery models. These two countries were also the most pessimistic about the potential in the ITO and BPO market, with 15% and 14%
respectively predicting contraction, and with the lowest number of respondents of any country surveyed anticipating year-on-year growth.
Interestingly, although respondents note that innovation is difficult to define and harder to measure, 70% of respondents do in fact embed innovation clauses within their services contracts.

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E&Y - Outsourcing in Europe: An in-depth review of drivers, risks and trends in the European outsourcing market - November 2013 E&Y - Outsourcing in Europe: An in-depth review of drivers, risks and trends in the European outsourcing market - November 2013 Document Transcript