Niyamath Parveez

Although the vast majority of talk about outsourcing in recent months has been of an extremely positive nature, it is not always the right option at the right time for firms. The fat that many firms are still undertaking due diligence before rushing into outsourcing proves that it is a vital business component and should not be used just because everyone else seems to be doing it. There is no doubt that used well, outsourcing is a fantastic tool and can be the difference between success and failure for some firms but there does need to be a review of the processes involved to ensure outsourcing will work for the best of all concerned.

This is exactly what British Airways have done in announcing that they are no longer continuing with their plans to utilize outsourcing. The firm had intended to outsource a number of parts and components of its website, www.ba.com and were hoping to tie in with major industry players and gain from their established third party knowledge and experience. Although then financial aspect is one of the major factors to pursue outsourcing as a business decision, gaining access to top of the range technology and systems is also another big reason why outsourcing remains on the agenda for many firms. However, BA also had the fact that the website was costing them around £30m each year to run so clearly there was scope to make a monetary saving.

However, no outsourcing task comes without costs and after examining the tenders and the situations, the bosses at BA have decided to not continue with their outsourcing plans with a lack of sufficient efficiencies cited as the main reason the plan has been put on the back burner. The unpredictable nature of the world economy has caused many organizations to reassess their view on the world and has caused many to take a more cautious approach to signing new contracts or undertaking new work. It is one thing signing a contract to ensure money comes in but if the deal is for long term and the market recovers, the firm could be on the end of a very bad business deal. Many small firms do not have the option to think too long term and need to sign deals to keep themselves solvent in the short term but a company like British Airways can probably afford to take a wider view of the situation.

It is still likely though that BA will continue to look for ways to improve their website and drive down the cost of maintaining it so this may still lead to work and projects for some of the firms involved in the outsourcing process, one of which was believed to be ITA Software, an American based company. As part of the reason for examining outsourcing was to find better and more relevant technology, BA are likely to remain in the hunt for improvements and this may well see them work with some of their potential outsource firms on a more informal basis.