An Eversheds Perspective
Outsourcing has undergone several re-inventions. From it¹s beginnings in the 1950s to the recent makeovers such as service provision and business process re-engineering - it has long been recognised as an effective tool to perform financial engineering on a company¹s balance sheet. Over half of the FTSE 100 now outsource in some way.
Whilst cost savings are still one of the most popular drivers, the use of outsourcing has matured to being a powerful tool for driving through changes in business strategies. Generally, our clients first outsource in areas where cost considerations are paramount, but they broaden their outsourcing activities into functions where there is no reason for them to have a particular expertise - such as facilities management and information services maintenance. As they gain experience with outsourcing arrangements and management, companies expand their outsourcing further, until they are even outsourcing senior management and areas touching their customers.
The outsourcing market itself is changing rapidly, with a number of trends, including;
- Consolidation of outsourcing providers.
- Globalisation - including talk of India losing its edge in the offshore outsourcing to be potentially replaced by China.
- Green sourcing - where recent research has revealed environmental factors play a key role in the selection of outsourcing suppliers and partners.
Eversheds finds that each outsourcing project is unique because of the individual nature of any business, so it is never just a mechanical exercise. Frequently, unsuccessful outsourcing arrangements result from a failure to give sufficient thought and consideration to the complexity involved. By comparison, those agreements which are most effective often reflect investment of time and resources at the outset in assessing the customers requirements for the future and in obtaining appropriate contractual commitments.
We look forward to discussing these issues with you further whilst welcoming you at the International Outsourcing Forum in 2009.
David Glover
Partner

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For further information please contact:
Imogen Lee
Eversheds LLP
T: 0845 497 4566
E: imogenlee@eversheds.com
Anna Jacobs
Slaughter and May
T: 020 7090 3232
E: anna.jacobs@slaughterandmay.com |