The Channel logo


By | John Oates 29th June 2005 08:41

Sell the IT department down the river

For a higher share price?

Companies which outsource do better than those who don't, according to research commisioned by a company that does, er, outsourcing.

Companies which outsource business processes perform better, and have higher stock market valuations, than companies which keep services in-house, according to the LogicaCMG-commissioned report.

The research looked at the share price of companies which had announced an outsourcing deal. The study found share prices one month after a deal was announced were, on average, 1.7 per cent higher for firms which had outsourced. In five out of seven sectors firms which outsource outperform those that don't. In the best cases companies saw an 11 per cent increase in share price.

LogicaCMG, which paid for the research, believes outsourcing could have an even bigger impact on share prices if companies did a better job of explaining how they intend to invest the savings acheived by outsourcing.

It predicts the total outsourcing market to be worth £370bn by 2010, an increase of 52 per cent on 2004. British companies could add as much £9.9bn to stock market valuations.

The study was carried out by the Centre for Economic and Business Research between April and June 2005. ®

Related stories

LogicaCMG goes down the Tube
Logica ups profits on falling revenues
IBM, Logica spar for £80m MoD deal

alert Send corrections


Frank Jennings

What do you do? Use manual typwriters or live in a Scottish croft? Our man advises
A rusty petrol pump at an abandoned gas station. Pic by Silvia B. Jakiello via shutterstock

Trevor Pott

Among other things, Active Directory needs an overhaul
Baby looks taken aback/shocked/affronted. Photo by Shutterstock

Kat Hall

Plans for 2 million FTTP connections in next four years 'not enough'
Microsoft CEO Satya Nadella


League of gentlemen poster - Tubbs and Edward at the local shop. Copyright BBC
One reselling man tells his tale of woe