Outsourcing is Great

[Lucifer Box]

It's official, Logica says so... :lol

Sell the IT department down the river
By John Oates
Published Wednesday 29th June 2005 08:41 GMT

Companies which outsource do better than those who don't, according to research commisioned by a company that does, er, outsourcing.

Companies which outsource business processes perform better, and have higher stock market valuations, than companies which keep services in-house, according to the LogicaCMG-commissioned report.

The research looked at the share price of companies which had announced an outsourcing deal. The study found share prices one month after a deal was announced were, on average, 1.7 per cent higher for firms which had outsourced. In five out of seven sectors firms which outsource outperform those that don't. In the best cases companies saw an 11 per cent increase in share price.

LogicaCMG, which paid for the research, believes outsourcing could have an even bigger impact on share prices if companies did a better job of explaining how they intend to invest the savings acheived by outsourcing.

It predicts the total outsourcing market to be worth £370bn by 2010, an increase of 52 per cent on 2004. British companies could add as much £9.9bn to stock market valuations.

The study was carried out by the Centre for Economic and Business Research between April and June 2005.

Also a rather dubious basis for assessing how great outsourcing is - before the outsourcing has had any business impact at all!

[ChicoLondon]

Lets just say I have previous experience with Logica in the outsource arena. Ahem...the phrase talk the talk.....etc comes to mind.

[Lucifer Box]

Outsourcing is Great

As it's the FD who normally make most if not all of the outsourcing decision, it's a sad fact that "talking the talk" is often all that's required. :rolleyes

[SupremeSpod]

So, all we have to do in our defence is point out the offshoring disasters and if the powers that be insist in offshoring wait in the wings for the project to go tits up and charge a bleeding fortune to fix it...

Easy really!

[trajectory]

Obviously busy over there is Israel, Spod !!

They fly you 3000 miles (?) do to something you could perfectly well in the UK (post to CUK).

What's the ale like over there?

[SupremeSpod]

Only been out for a beer once. Gold Star.

It's not that I'm busy, I'm just setting up the integration environment and pressing the flesh.

I might be flying back to the UK for a week tomorrow and then back here a week on Saturday.

Ah, well, just think of the air miles.

[MarillionFan]

"Lets just say I have previous experience with Logica in the outsource arena. Ahem...the phrase talk the talk.....etc comes to mind. "

8o

Shhhhhhhhhh.

[trajectory]

When I graduated (donkeys' years ago admittedly) Logica mopped up all the muppets off our course who couldn't get a job anywhere else. Talk about not fussy.

[rootsnall]

You'll always have dumb senior management looking for an easy opt out on IT, if the outsourcers can come up with some stats to show it works ( and saves money !? ) that should be enough to win the business for them. I've had quite a few experiences of outsourcing/offshoring, all failures on quality and cost. At my current client ( an early outsourcer and tight with the money ) they have successfully got rid of a well known dodgy US outsourcer after learning the hard way. Its all back in house with contractors on board so we may be safe yet. I think offshoring is a bigger con especially on development projects but the clients can never really work out how much they've wasted by repeatedly bouncing specs and dodgy code around the globe until its too late.

[xoggoth]

a better job of explaining how they intend to invest the savings acheived by outsourcing.

What? Surely they invest it all in expansion in the UK. It benefits all of us. That's what the globalists on this board keep telling us anyhow.