IBA outsourcing and the crisis in Europe

Back when the global economic crisis started, many industry commentators declared that this would be a boost for the international IT outsourcing market. With companies in Europe and the US struggling to ride out the downturn, there would be strong growth in offshore outsourcing.

But things never really played out like that. Outsourcing usually needs a big upfront investment in training, knowledge transfer, and additional management to make the transition run smoothly. Many companies just decided to avoid that short-term investment even if it was clear that there would be benefits in the long-term.

We are not out of the woods yet, but there is more stability. The US is growing slowly now and many countries in Europe are seeing promising growth – though the uncertainty of the Euro is still causing many to fear for the immediate future of the Mediterranean economy.

Research and consulting company, Everest Group, in a recently published research suggested that outsourcing in Europe was worth €180-200bn in 2010. Their latest research for 2011 is not published yet, but estimates suggest that this figure will have increased to about €220bn. This is about a 10 per cent increase in demand even in quite an uncertain economic climate.

Industry observers suggest that much of this new demand is because companies in France and Germany are starting to explore a more global delivery model. In the past they were far more resistant to offshoring, but today it has become a strategic necessity, regardless of the global economic situation it is just how technology is delivered today.

All this is good news for those of us who have been delivering remotely all along, right through the economic crisis. Whether companies are exploring offshore outsourcing because they need to reduce their cost, or they just need to find more expertise and faster, we know exactly how to help.