03 May 2011
At eight per cent of overall GDP, the outsourcing sector brings in as much for the UK economy as the financial sector, according to a report released today by Oxford Economics Research.
IT- and data-related services account for €41bn (£36bn) of a total turnover of €207bn for this sector, according to the report.
The report categorised outsourcing as governed by an "ongoing or time-specific agreement involving a degree of delegation or management responsibility".
The outsourcing sector as a whole employs 3.1 million individuals, equivalent to 10 per cent of all UK workforce jobs.
However, the number of jobs in outsourced IT is a fraction of this at 339,000 compared with manufacturing at 2.6 million or public administration at 1.6 million.
The report states that the combined turnover of computer programming, consultancy and related activities as well as data processing, hosting and web portals was £41.7bn. Within that some £6.7bn was made up of services to the public sector with £35bn being services provided to the private sector.
Bindi Bhullar, director of global IT services provider HCL Technologies, commented on the research:
"Successful outsourcing projects have previously been seen as the elephant in the room. There has long been a reluctance to discuss the benefits outsourcing brings to the UK economy. It is great to see this credible research highlighting the significance of IT and IT-related BPO.
"The research comes as welcome news to the outsourcing industry, which has been in the spotlight recently as a result of the government's drive to cut costs and reshape public services," he added.
It is encouraging to see outsourcing maintain its place in business practice and subsequently deliver great benefits to the overall UK economy during this period of continuing financial difficulty. After all, outsourcing can give businesses the opportunity to minimise their cost base whilst accessing the very best skills, on a flexible basis.
SME owners face many difficult choices as the business reaches a tipping point where it requires more resources. But many people are discovering that propelling the business forward does not have to result in additional investment in people, and all of the legislative and financial complications that comes with this.
Adopting an outsourced IT model, for instance, ensures that a business will receive the very best IT solutions and support, without the costly investment in a skilled, trained and experienced workforce. IT is undoubtedly a business enabler and a vital ingredient for any successful business, but it is so often something that a business owner knows very little about. Working alongside a reliable consultant and outsource provider allows the business owner to focus on what they are good at – running the business.
Outsourcing can offer many small businesses the flexibility to grow without the risks associated with increasing its fixed outgoings. The very best skills can be accessed as and when they are required, and a business can increase its profitability without increasing its headcount.
Richard Barker
CEO
Sovereign Business Integration
www.sovereign-plc.co.uk
Posted by: Richard Barker 05 May 2011
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