HMRC restructures outsourcing contracts

HM Revenue & Customs has agreed to restructure its IT outsourcing contract in response to HMRC`s aim to significantly reduce IT running costs by 2011, reports PublicTechnology.

The restructuring of the Aspire contract balances the need for HMRC to meet its commitments to cost reductions, under the 2007 Comprehensive Spending Review.

"The IT outsourcing relationship between HMRC and Aspire has gone from strength to strength over the past three years, as we have seen significant improvements in service quality and delivery capability," says Deepak Singh, HMRC CIO.

Outsourcing will remain strong in 2008, with HR outsourcing contracts worth $1.1 billion and finance and accounting outsourcing (FAO) contracts worth $600 million coming up for renewal, according to offshoring advisory firm Everest Research Institute, reports TMCNet.

In its study, 2008 Market Predictions, the firm said demand for FAO services will continue to be strong in the next 12 to 18 months.

Captive units, niche BPO players and technology providers would be prime acquisition targets, according to the study.

Infrastructure outsourcing is going to be the next big wave in outsourcing, according to India Times.

While Indian IT companies are handling infrastructure outsourcing work worth $1.2 billion, this figure is expected to touch $8.8 billion by 2010.

According to research by global offshoring advisory firm Everest, most of this work will come to the IT majors Tata Consultancy Services, HCL Technologies, Wipro and Satyam. "The potential of this segment is huge and Indian companies should be able to get outsourcing contracts worth $8.8 billion by 2010, which is a conservative estimate."