More than half of outsourcing end-users are more confident in the use of outsourcing to support their business objectives than they were in 2009, according to the National Outsourcing Association’s (NOA) quarterly Outsourcing Confidence Index released today.

While the financial services sector was found to be the most positive about the use of outsourcing in 2010 and beyond, the services sector also showed high confidence with 61 per cent followed by the retail sector which was marginally less confident with 55 per cent.

The research also found 60 per cent of users intended to outsource services not previously outsourced this year, whilst 56 per cent of those already outsourcing planned to increase the scope of existing contracts.

The concentrated focus on cost reduction has also led-to a greater interest in offshoring, with 100 per cent of respondents planning on increasing offshoring by the end of 2010 and 88 per cent of respondents placing high importance on multi-shoring. However according to the report 78 per cent of respondents believe supplier outsourcing capability has not improved over the past 12 months.

Martyn Hart, Chairman of the NOA, said, “Outsourcing has traditionally been seen as a cost saving mechanism for business, so during the torrid 2009, it is not surprising that interest in outsourcing is continuing to grow. However, continued focus on cost above everything else, means that many are pushing through higher volume low cost contracts, over shorter time frames. This short-termism can be dangerous and these kinds of contracts frequently fail.”

He continues, “That said it looks like suppliers still have some work to do to ensure they’re fully catering for what users want in 2010. This is likely to be an ongoing issue as users continue to seek new cost savings from less mature providers and locations around the world.”