The year is about to close with a little more than one month to go but the outsourcing industry has no qualms in pushing for further development. However, as the industry continues to sign different kinds of outsourcing contracts with different kinds of companies, there are still some industry players that are quite slowing down when it comes to their company’s revenue growth. Also, it is noticeable there are other industries that continue to become good targets for outsourcing companies for reasons that will be discovered along the way.
CGI Group Inc. (NYSE:GIB), a provider of information technology and business process services based in Canada, has been gaining quite attention as the company has been in the news since the month of November began. One of the notable news regarding CGI Group Inc. was on November 1, where a statement has been released announcing that CGI’s wholly-owned subsidiary in the United States, CGI Federal Inc., has been awarded a contract by the United States Army. The contract covers IT operations wherein CGI will be providing hardware and software support, training, network support, and maintenance to the US Army. There is already an existing contract between the two parties, that has spanned for over a decade already, and this recent announcement is only to inform the public of the agreement that they are to renew the partnership for another one year base period, with two one year option periods.
The public sector is one of the good target markets for outsourcing despite the fact the security measures required and the presence of other risks that go along with signing a contract with a government institution is higher as compared to companies belonging in the private sector; one of the risks would be inclined towards the accounting side. The amount of work that is being outsourced by the government institutions who seek outsourcing is definitely voluminous, which means long-standing projects for an outsourcing company. Also, it has been predicted before that government outsourcing will continue to flourish in the year 2010; it is already near the end of 2011 and yet the government still continues to delegate a part of their operations to an outsourcing solutions provider.
Outsourcing companies see government institutions as a good venture for quite a number of reasons. Since government agencies are deemed to ensure that all citizens are satisfied upon their signing on to avail their services, the public sector is a good market to pitch the efficiency card to, where outsourcing can help them improve their efficiency especially with a quick turn-around time by outsourcing companies. Another point that solutions providers can use would be cost of outsourcing versus the cost of hosting their operations in-house. Outsourcing their services would definitely cause government agencies to lower their expenses on operations, especially during times when budget cuts are widespread.
It is no doubt that government offices are quite a good catch for outsourcing companies, however, not all outsourcing solutions providers are equipped to sign a contract deal with a public sector agency. As mentioned earlier in the article, the amount of work to be delegated would be quite voluminous and quite a number of outsourcing industry players are already eliminated as government institutions look at large outsourcing companies, such as Accenture (NYSE:ACN) and CGI Group Inc., to provide manpower to attend to their needs. Also, government agencies see that medium and large outsourcing companies are those who will be able to provide them a more stable facility. But relatively small companies must not lose hope as there are also some parts of government operations that can be delegated to them, but just not as big as those being outsourced to multinational outsourcing companies.
In the market today, there are quite a number of companies that can be enlisted to outsource especially today, where the benefits of outsourcing is already out in the open for everyone to see. Outsourcing companies, regardless of size, will be able to sign more contracts with companies if they know which type they should pitch their services to. This way, they will be able to provide better service and work quality to their clients.
Author: Jamee C.
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