Western firms plan cut in IT outsourcing
Below expected cost savings achieved by IT outsourcing services are forcing a number of corporates in Western countries to think over bringing part of their jobs back in-house according to a new study.
The report released on Monday by International technology research agency Forrester said organisations in North America and Europe plan to continue their IT outsourcing initiatives despite cost savings concerns, but at the same time, many of them also plan to bring some elements of IT outsourcing portfolio back-in house.
As per the report, 36 percent of the firms surveyed agreed that cost savings from services were lower than expected and another 28 percent of respondents believed that their providers are unable to respond rapidly to changing business needs.
Forrester Principal Analyst Bill Martorelli said few outsourcing clients said the quality of work that IT services and outsourcing partners perform was poor, they nevertheless had converns about their providers and the cost effectiveness of IT outsourcing.
The report said that many respondents indicated that they intend to bring some services, or some element of services, back in house after outsourcing them. However, the clients have substantial plans to outsource various IT activities, suggesting that expectations for growth in the industry are well founded.
The report was based on interviews with over 1000 North American and European enterprises about their plans on services spending for the next 12 months. The report said information technology service budgets were focused on current works with 66 percent respondents saying their IT services budgets were dedicated to existing operations and maintenance as opposed to new initiatives and projects.
