Analysts See Link Between Outsourcing And Profitability

Over two-thirds (69%) of analysts in the City and Wall Street think the outsourcing of business critical processes can improve a company's share price. Meanwhile 64% think such outsourcing can have a significant impact on a company's profitability.

A MORI survey for Xansa gauged the opinion of 100 sell-side analysts in the UK and US towards outsourcing or Business Process Management (BPM). The survey highlighted differences in the opinions of Wall Street analysts, who operate in a more mature BPM market, and City analysts. For example, four in five (78%) US compared to three in five (60%) UK analysts believe that BPM can positively impact on company share prices.

Around two-thirds of analysts in both countries cited an 'improved focus on the core business' as a benefit of BPM (66% in US and 62% in UK), while 'the ability to reduce a company's cost base' was also rated as a benefit (by 60% in US and 70% in UK).

Over half (52%) the UK analysts surveyed stated that they want to see companies put more emphasis on BPM over the next two years.

One hundred telephone interviews were completed between 25 April and 24 May 2002, amongst sell side analysts in the telecoms, media & technology, banking, insurance, retail & consumer goods sectors.

Interviews were evenly distributed between the UK (50) and the US (50) The sample of organisations and individuals approached for this study were compiled by MORI from Nelson's Directory of Investment Research.

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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