UK shows the way for outsourcing

US firms are still too "rash" when it comes to IT outsourcing compared to European businesses who take a much more mature and effective approach, according to Gartner.

In its annual technology forecast the analyst house says outsourcing will continue to grow rapidly, especially in Europe, and is advising businesses to consider farming out non-core parts of their IT infrastructure.

The trend to offshore outsourcing is also continuing unabated, with Gartner estimating that a quarter of all tech jobs will be based in low-cost overseas countries such as India by 2008.

Peter Sondergaard, head of European research at Gartner, told silicon.com that Europe is leading the way when it comes to outsourcing best practice. He said that while cost is still important, it is not the sole consideration on this side of the pond.

"Europe has become much more mature. Outsourcing continues with strength throughout Europe and it is not just a UK phenomenon. In the US there are rash decisions made solely around cost containment," he said.

Sondergaard said European firms take a more strategic approach that looks at business processes and IT governance when approaching outsourcing.

Separate research, conducted among CEOs, CIOs and CFOs within the top 250 European companies, from service provider CSC, concludes that UK businesses are also ahead of their European rivals when it comes to outsourcing.

Three-quarters of UK companies had long-term IT services contracts compared to just over a third across the rest of Europe. Outsourcing was cited by the UK firms as a key driver for business transformation and creating flexibility as well as cost reduction.

The move to the consortia outsourcing model was also highlighted in the study, with 90 per cent of respondents saying they would prefer to manage a number of best of breed suppliers.

George Bell, CSC's president of European operations, said in a statement: "Using multiple suppliers can provide businesses with access to high levels of expertise but this typically requires more time and effort for businesses in both the selection of outsourcing providers and on-going management. Companies need to weigh up the cost, service and management implications of either outsourcing to one supplier or to multiple suppliers."