UK drives further outsourcing growth

India remains favoured offshore destination

UK businesses are expected to spur growth for offshore outsourcing, with India remaining the top destination, according to research published this week.

Offshore spending is expected to grow 50 per cent year on year in 2006 and 2007, with growth primarily driven by UK-based firms, says analyst Gartner.

Increasing demand is also coming from Germany and the Nordic region, while growth in the more established US market is predicted to increase by 30 per cent in the same period.

Gartner research vice president Ian Marriott, speaking at the firm’s European Outsourcing and IT Services Summit this week, said the market for offshore outsourcing is growing and the number of businesses using offshore firms globally will rise from 13 to 20 per cent in the next two years.

India is the main destination for offshoring, especially among European companies, followed by China and Brazil.

But new members of the European Union such as the Czech Republic, Hungary and Slovakia are also proving popular with mature European countries, offering political and economic stability and lower costs.

When choosing offshore partners, Marriott warns that firms are unlikely to find everything they need in any one country.

‘Make an analysis of the countries incorporating factors such as costs, political and economic stability, the labour pool, infrastructure, educational system, security and scalability,’ he said.

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