U.K. Leads Outsourcing Race

U.K. Leads Outsourcing Race<@VM>Techtoons

Steve LeSueur

by Steve LeSueur, Editor

Not that we needed more evidence, but the United Kingdom recently reaffirmed the strength of the outsourcing market outside the United States.

The U.K. Department of Social Services has awarded a $3 billion contract to Electronic Data Systems Corp. to provide software application development services for the agency. EDS' major partners in the 10-year contract, announced Aug. 8, include IBM Corp. and Price-waterhouseCoopers.

As Senior Editor Nick Wakeman reports, the U.K. deal is part of a larger trend toward information technology outsourcing among foreign governments. The market research firm Input Inc. predicts that spending on outsourcing by European central governments will grow by 17 percent annually during the next five years, more than double the U.S. growth rate of 7 percent.

The factors driving outsourcing overseas are the same as those driving it here, such as saving money, reducing head count, increasing productivity, increasing online services and keeping up with technology. But as one industry executive suggested to Nick, foreign
governments "may be moving down the outsourcing path more quickly than the United States because they felt the recruitment and retention pinch sooner."

Systems integrators are following a lot of outsourcing projects here in the United States, such as the planned $16 billion Navy-Marine Corps Intranet. But as Nick's story makes clear, the grass is pretty green outside U.S. boundaries as well.

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