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Current plans to lead to outsourcing growth?
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Blog Sponsored by - OffshoreITStaffing.com
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Blog Sponsored by - OffshoreITStaffing.com
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Current plans to lead to outsourcing growth?
As new research suggests that public sector IT managers will have to outsource more work regardless of which party wins next month's election, experts predict that many IT professionals will move from government organisations to the private sector.
According to a report released in April by analyst firm Kable, IT and business process outsourcing (BPO) deals involving public sector organisations will grow 19 percent in value over the coming year, to £5.13bn. Kable predicts that this figure will grow a further 19 percent in the 2006/07 tax year.
Kable said the growth would not depend on the result of next month's election, a point supported by Alan Rodger of analyst firm Butler Group. "The approach to outsourcing is an area where there is very little difference between the leading parties," he said.
Kable added that such growth will be driven by an outsourcing element now included as standard in new infrastructure projects.
Peter Foster of analyst company Pierre Audoin Consultants said that current practices, such as making IT services firms responsible for the ongoing management of the new public sector systems that they supply, means that the growth in outsourcing will continue.
Government IT directors are also under pressure to lower costs by outsourcing work, which means the growth will continue even if projects such as Labour's controversial ID card scheme are cancelled with a change of government, according to Foster. "The scale of the savings envisioned by the Gershon review into public sector efficiency cannot be achieved without IT outsourcing," he said.
Experts warned that the efficiencies promised by outsourcing could result in job losses. Seyi Agboola of Kable cited as an example the anticipated reduction in the number of IT support staff in the NHS once it successfully consolidates multiple databases into a single infrastructure.
"Efficiency means scaling back in certain areas," Agboola said. "The Gershon review plans to remove 80,000 public sector jobs and some of those will be IT positions."
But Nick Kalisperas of trade group Intellect argued that although many public sector IT professionals will be transferred to the private sector, most will be retained by their new employers.
"The sheer size of the projects means [the outsourcers] require skilled IT staff with public sector experience," Kalisperas added.
According to a report released in April by analyst firm Kable, IT and business process outsourcing (BPO) deals involving public sector organisations will grow 19 percent in value over the coming year, to £5.13bn. Kable predicts that this figure will grow a further 19 percent in the 2006/07 tax year.
Kable said the growth would not depend on the result of next month's election, a point supported by Alan Rodger of analyst firm Butler Group. "The approach to outsourcing is an area where there is very little difference between the leading parties," he said.
Kable added that such growth will be driven by an outsourcing element now included as standard in new infrastructure projects.
Peter Foster of analyst company Pierre Audoin Consultants said that current practices, such as making IT services firms responsible for the ongoing management of the new public sector systems that they supply, means that the growth in outsourcing will continue.
Government IT directors are also under pressure to lower costs by outsourcing work, which means the growth will continue even if projects such as Labour's controversial ID card scheme are cancelled with a change of government, according to Foster. "The scale of the savings envisioned by the Gershon review into public sector efficiency cannot be achieved without IT outsourcing," he said.
Experts warned that the efficiencies promised by outsourcing could result in job losses. Seyi Agboola of Kable cited as an example the anticipated reduction in the number of IT support staff in the NHS once it successfully consolidates multiple databases into a single infrastructure.
"Efficiency means scaling back in certain areas," Agboola said. "The Gershon review plans to remove 80,000 public sector jobs and some of those will be IT positions."
But Nick Kalisperas of trade group Intellect argued that although many public sector IT professionals will be transferred to the private sector, most will be retained by their new employers.
"The sheer size of the projects means [the outsourcers] require skilled IT staff with public sector experience," Kalisperas added.
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