I was at the office of the analyst Datamonitor in London yesterday. The plan was to go and meet Peter Ryan, the lead analyst for call centres and business process outsourcing (BPO), and to go for some dinner. Peter is based in Canada, so he is not on this side of the Atlantic very often.

I took advantage of him being around to get some opinion on the present threat of recession. I have heard conflicting views in the outsourcing community – some suppliers are looking forward to a wave of new business as cost cutting becomes more important, and some fear the worst.

Peter dragged his colleagues Pat O’Brien and Ed Thomas into the room to talk as well – both London-based analysts focused on the BPO sector. We talked about the potential recession and how it might impact the BPO and general outsourcing marketplace. The entire conversation can be played back on the Talking Outsourcing podcast, but I’ve captured a few key messages in this blog post.

Pat opened the conversation by declaring: “Outsourcing suppliers seem to be suffering as much as the wider market in terms of share price. The idea of outsourcing getting more popular in a downturn has not been reflected by investors. The suppliers that have been hit hardest so far are the ones with the most exposure to financial services.”

Clearly Pat does not agree with those vendors who think the recession will be a boon. Following on from this, Peter said: “A lot of people seem to feel that contact centre outsourcing is about to see a lot of new business, happy days for all. But if there is a downturn in the economy then there are fewer consumers purchasing fewer products leading to fewer opportunities for queries about products and so fewer contact centre interactions. Of course, that means there is also less scope for outbound sales as well.”

Oh dear, it looks glum based on the chat so far, but Ed injected some enthusiasm for the future by reminding us that the world has yet to end.

“Contract signing might be falling off, but acquisition activity is not. Look at the recent news of HCL trumping Infosys for Axon and TCS just picking up the Citigroup BPO activities. Companies clearly still have cash available and are investing it with an eye on the future,” he said.

Based on this chat with the Datamonitor analysts, a few points became very clear. There is no automatic boom time ahead for outsourcing suppliers just because of a potential recession. However, there is much more focus on the price of the services – forget about the past few years of strategic outsourcing and flexible resourcing. Now, cost is king again.