2008-3-13

IT Outsourcing Being Used To Enhance Business Performance

More organizations are now turning to IT outsourcing (ITO) to enhance business outcomes instead of just to control or reduce costs, according to a survey by Gartner.

According to a 2007 Gartner survey of 750 IT and outsourcing executives in North America, Asia/Pacific and Europe, 41% of organizations that were currently outsourcing IT said they use ITO to enhance business outcomes and performance. Approximately 47% of organizations still identified controlling or reducing costs as the primary benefit expected from ITO. However, there is a shift taking place. In 2005, only 28% of respondents reported enhanced business outcomes and performance as the primary benefit of ITO.

"Cost issues remain strong, and the shift in buyer expectations toward viewing ITO as a means to enhance operations is a sign of a maturing market that has higher expectations from ITO providers," said Allie Young, vice president and distinguished analyst at Gartner. "In addition to cost competitiveness, providers must create a vision for outsourcing that accentuates other business or IT impact to appeal to a maturing buyer set that will eventually seek more value."

In all major regions, buyers of ITO anticipate increasing their use of ITO in the coming 24 months. On a global basis, 88% of organizations that are currently outsourcing anticipate moderate or high levels of outsourcing compared with 67% in 2007. About 85% of Europe, the Middle East and Africa (EMEA) organizations and 90% of Asia/Pacific organizations expect to continue at the same level or increase their outsourcing during the next two years, up from 62% and 73% in 2007, respectively.

Both North America and Asia/Pacific respondents said data privacy/security was the top inhibitor to ITO, while EMEA organizations were more likely to be concerned about loss of control in outsourcing.

Source:http://www.tech2.com/biz/india/news/outsourcing/it-outsourcing-being-used-to-
enhance-business-performance/20581/0

[Back]