Firms mull outsourcing to cut costs

The profitability of Britain's asset management industry is being "squeezed" by rising regulatory costs and increased competition, which could see more firms considering IT outsourcing in London, reports iHot Desk.

According to the Financial Times, more than half of businesses in this sector expect their return on equity to fall below 15% this year - down from an average of 20% three years ago.

"To cut costs, the asset management industry will embrace outsourcing over the next three years in areas such as fund accounting, custody and back-office technology," the newspaper reported.

As the global community watches in horror at the scenes unfolding in Cairo, many in the outsourcing community are pondering the demise of what appeared to be the next big thing in terms of location in offshore services delivery, reveals Sourcing Focus.

The virtual state of martial law imposed by the Mubarak government not only impacts the ability of outsourcers to service their clients, but also counters the pro-business message of openness that has been the watchword for foreign investment for the past several years.

The largest question remains whether this once-waking outsourcing giant can recover regardless of a change in government, and what the broader implications are for offshoring.

The Europe, Middle East and Africa (EMEA) outsourcing market is showing signs of life again, as cash-strapped end-users turn to restructuring deals, states CRN Channel Web.

The total value of EUR20 million-plus outsourcing deals in the region rose 81% sequentially to EUR10.5 billion in the fourth quarter of 2010, according to outsourcing advisory firm TPI.

But that total was still 31% down on the same quarter last year and the market fell 14% to EUR30 billion for 2010 as a whole.