Outsourcing to help Europe return to growth?

IBA Group

Mark Kobayashi-Hillary

In the past three years or so, since the initial credit crunch and then global economic slowdown, outsourcing as a business strategy has taken a knock.

It’s not that there is anything wrong with it as a strategy. It’s just that outsourcing usually involves change, some change in processes and the way things are done. That needs planning and transition, so even if the future state saves money, many firms have declined to go through the process of getting there while survival has been the priority.

If you look back to the time around 2008/2009, most firms were probably focused on budget revisions, retrenching people they cannot justify keeping, and targeting business activities to those that create the most immediate return – completely focusing on getting through the recession.

But talk to most firms today and there is a more interesting and positive picture emerging. There remains the fear of a double-dip recession in countries such as the UK, and Germany is starting to struggle under the weight of supporting the Eurozone, but the major economies of Europe have been growing again – albeit slower than we used to enjoy. There is certainly a growth in business optimism and a greater desire to spend on improving company operations.

Firms are exploring how best to ride the growth when it comes, and that does involve a large amount of planning how to work with partners. The focus is now on positioning a trusted group of partners together and aiming for growth over this decade.

The biggest change in behaviour will be the desire to leverage existing assets over the next couple of years. When firms have already sunk cash into developing expertise and systems in-house, they won’t just discard that knowledge overnight.

It’s been a tough time over the past couple of years, but the new decade looks like an exciting place to be and outsourcing within Europe is going to be an important business strategy that helps us all return to growth.