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Is outsourcing looking shaky?

A piece in LocalGov is suggesting that the future of outsourcing is looking fragile. This is one of our favourite things; one company has some poor results, there’s a high-profile collapse from earlier in the year to reference and someone else faces an “uncertain future” (hint: no company’s future is absolutely certain, ever – so if you say something like that you can be certain the lawyers won’t come after you).

The high-profile collapse is of course Carillion, the gift that keeps on giving, at least to journalists and other commentators.

Our feeling is slightly different, being close to the industry. The last report from Arvato suggested that public sector outsourcing is still growing but a lot of it is happening in the cloud rather than anything anyone might previously have identified as a traditional outsourcing deal. Automation is increasingly important too (sometimes in the cloud, sometimes not).

Poor governance, as seemed to happen in the Carillion case, seems to be on the way out. Financial motivation on its own is no longer a reason to outsource, as new guidelines have suggested. These moves should be welcomed by all stakeholders.

But outsourcing shrinking? We think not.

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