Friday 7th September, 2012

According to KPMG’s latest global pulse survey, demand for Outsourced support services is expected to fall in the last half of 2012. Organisations are holding back from renewing contracts for core outsourced services during economic uncertainty.

According to the data, which is based on the views of senior executives in some of the world’s largest global business and IT service providers, little over half expect to see customer demand increase between now and the end of this year.

The declining confidence surrounding anticipated future demand for outsourced services stems from respondents’ experiences over the past three months.

Shamus Rae, partner in KPMG Management Consulting’s shared services and outsourcing advisory team, said: “Negative market conditions in the Euro Zone continue to have a detrimental impact on business confidence as uncertainty forces buyers to delay decisions. The knock-on effect is also being felt as organisations maintain a tight rein over discretionary spending.

He added: “Amongst those business customers who are renewing contracts, cost reduction has regained its position as the primary driver to outsource key services, but the ongoing market volatility is driving organisations to focus on short-term initiatives rather than projects that will boost performance over the longer-term.”

The survey also found that a desire to reduce operating costs has regained top spot when respondents were asked what drives outsourcing decisions amongst their client base.