Business Times

22% UK SMEs want to outsource, disregard negatives - report

By Jagdish Hathiramani

More than one in five (22%) UK small and medium enterprises (SMEs) are "likely" to offshore or outsource elements of their business processes, according to a November survey of 200 UK SME's. This is even though 64% of all respondents still believed offshoring to be "detrimental" to the UK economy.

Commissioned by Sri Lankan outsourcing body SLASSCOM and conducted by ICM Research, the survey is featured in a report titled "The SME Offshoring Readiness Index" which further indicates that the UK SME sector has a combined turnover of £750 billion (or more than Rs. 140 trillion).

In addition, the report identifies India, Poland and China as the primary choices for offshoring while Sri Lanka, Russia and Brazil are considered less well known, or emerging, destinations. Interestingly, a majority of respondents (totalling 183 out of the 200 questioned) had no previous offshoring experience while some analysis suggested that this was an area of opportunity prompted by the UK's lack of resource availability.

In addition, while 9% indicated that they were willing to offshore within the next 12 months; 44% of these identified customer service as their priority area followed by data processing (37%), IT development / maintenance (30%), other back office processes (19%) and finance and accounting (12%). Apparently a key differentiator of offshoring in customer service is its capability of providing extended hours of operation such as with after-hours service.

Further, survey respondents indicated their interest in offshoring to be prompted by drivers as diverse as current cost of UK labour (28%), the ability to expand and strengthen their UK businesses (22%), a focus on core competencies (16%), lengthening of service hours (14%) and even providing access to skills otherwise lacking in the UK (13%), while some areas of worry included loss of personal control (33%), data security threats (22%) and the possibility of reputation damage (21%).

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