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Computing, July 12, 2001

Firms look offshore to cut budgets

By Hazel Ward

OFFSHORE outsourcing in the UK is being driven largely by the need to cope with a slowing economy.

This was the consensus of opinion among speakers and delegates at a conference on off-shore outsourcing held by US supplier IMR Global in London last week. They felt that firms regard offshore outsourcing as a way of cutting costs.

Bob Aylott, directing consultant at outsourcing consultancy firm Orbys, said most UK companies were only in the early phase of experimenting with offshore outsourcing.

But that was likely to change, he said, particularly as a result of the economic slowdown currently affecting the US and Europe.

"Very little is being outsourced in the UK at the moment, but there are a lot of people experimenting with small projects.

"Offshore outsourcing in the applications area is the issue that's bubbling up now in the UK, and because of what's happening in the US it is becoming a matter of doing business.

"Outsourcing should not be an experiment, nor a risk, it should be a strategic decision," Aylott said.

Another factor likely to drive activity in the offshore sector is the growing pressure from suppliers, particularly in the US, who are increasingly looking to the UK for business, Aylott added.

This time last year, such a conference would not have taken place because companies were involved in other initiatives and offshore was not such a popular option, he said.

Among the 40 or so delegates were representatives from companies such as Northern Rock, American Express, Prudential, Royal & Sunalliance and Friends Provident.

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