So, the event has started and has kicked off with an interesting panel debate about the future of outsourcing and offshoring in Europe (Continential Europe that is, not UK). Clear differences were discussed based around the UK’s long historic context of outsourcing and it’s labour markets, compared with French, German, Dutch markets. Dominique Raviart, a senior analyst from Ovum’s French arm gave some interesting observations on the potential for outsourcing in France, where he feels the offshore model is ‘too formal for the French’. He did agree, however, that the next 5-10 years would be key and represent opportunities for outsourcers, but that typical outsource providers would have to be educated on ‘the way Continential European companies work’. The private sector will gradually open up for offshoring, but he admits that understanding of outsourcing is much lower than in the UK and that a fair degree of learning is needed from their side too, particularly for BPO. Labour laws and ‘social perspectives’ (I took to mean job protection) are also significant barriers. So, Dominique believes the European arms of the international companies will do most offshoring/outsourcing business, and IT apps and Infrastructure services are far more likely to move before BPO. He raised some interesting stats - of the top 2000 companies (global), 60% use offshore outsourcing in one shape or form, but in Continental Europe only 18%. Not sure if this is exact, but the delta is interesting. His final plea to the outsource providers is not to ‘oversell yourselves’ by which he means don’t claim to be a full service provider if you are not. Fair enough.
On the subject of statistics, I also note that there are tons of the things being bandied around and all are a bit different (and too numerous to mention here), but in a nutshell, they all make the same point: it’s a BIG marketplace, for example: ‘the European outsourcing marketplace is worth $7bn now, but will be worth $31bn by 2010’. Xansa’s very own David Leigh provided an erudite reflection on the UK government marketplace, again to make the point that growth potential is massive - a £40bn size of prize in Central Government alone. It’s also vital to look at the business case on a full-economy basis - don’t just think ‘jobs are leaving the UK’ but consider the replacement of jobs with other types - the freeing up of money in the NHS Finance & Accounting BPO that Xansa’s JV with the Department of Health provides funding for another 3,000 doctors or 12,000 nurses for front line care. So, labour law debates in Continental Europe should consider such issues, as the UK has been doing for years.