Outsourcing Europe Gains Acceptance

CIOL reports the practice of outsourcing business, long popular in the United States and Britain, is gaining in acceptance in continental Europe and is diversifying rapidly from technology services to other business processes. In Europe, more outsourcing deals were signed last quarter than in any single quarter since 2000.

In Germany, Europe's biggest economy, banks are leading a trend of handing over entire business processes to third parties, with overall outsourcing revenues in the first nine months of 2004 tripling from the year-ago period, Technology Partners International said.

Driving the latest spurt of outsourcing growth is so-called business process outsourcing (BPO), in which companies contract out entire processes, for example human resources from hiring to pension administration.

Previously, firms tended to outsource only information technology functions such as server management, IT integration or customer relations to call centres.