Despite the economic downturn, IT outsourcing has increased, according to a study by Computer Economics.
Since the recession started, companies have increased the amount they spend on outsourcing services. In 2008, 3.8% of total IT spending went on outsourcing but this figure rose to 6.1% last year and it currently stands at 7.1%.
Of course, one reason for this could be that when companies cut down on internal staff, they contracted out essential tasks to service providers as a means of cutting costs. It’s also worth bearing in mind that the majority of capital projects were put on hold and operating expenses cut during the economic crisis.
The VP of research at Computer Economics, John Longwell, said that IT organisations are now outsourcing more of their IT functions than they did a few years ago. The recession started to accelerate the trend but there are also a lot of organisations outsourcing applications to ‘software as a service’ vendors.
SaaS and hosted applications are the most frequent form of outsourcing, but not the most popular. Based on frequency and level, outsourcing Web and e-commerce systems came out tops.
The study also discovered that outsourcing desktop support has the greatest cost reducing potential. Almost 44% of businesses that outsourced this function to contractors and freelancers reported lower costs than performing the function in-house.
Outsourcing IT security is also proving a popular measure. Half the organisations that outsource IT security say that their service levels have improved.
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