Friday, February 29, 2008

More Organizations Are Using IT Outsourcing to Enhance Business Performance Rather Than to Just Cut Costs

According to a 2007 Gartner survey of 750 IT and outsourcing executives in North America, Asia/Pacific and Europe, 41 percent of organizations that were currently outsourcing IT said they use IT outsourcing (ITO) to enhance business outcomes and performance. Approximately 47 percent 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 percent of respondents reported enhanced business outcomes and performance as the primary benefit of ITO.

In all major regions, buyers of ITO anticipate increasing their use of ITO in the coming 24 months. On a global basis, 88 percent of organizations that are currently outsourcing anticipate moderate or high levels of outsourcing compared with 67 percent in 2007. Over the next two years, 89 percent of North American organizations anticipate outsourcing at high or moderate levels, up from 67 percent in 2007. About 85 percent of Europe, the Middle East and Africa (EMEA) organizations and 90 percent of Asia/Pacific organizations expect to continue at the same level or increase their outsourcing during the next two years, up from 62 percent and 73 percent 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.

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1 comment:

neo phyte said...

Well, the research only further buttresses a fact known for some time now. The days when SaaS played on costs are almost gone now. Companies such as NetSuite are now positioned as vendors of suites of business software that can manage the entire gamut of business issues for you.