Spending on the outsourcing of IT functions is rising at a rate that is in step with IT operational budgets as a whole, according to a new report, “IT Outsourcing Statistics 2015/16,” from IT research firm Computer Economics.
Enterprises may choose to contract with a service provider in order to preserve capital, reduce costs, improve operational flexibility, increase service levels, reduce management overhead or rapidly deploy new capabilities, the study found.
“Outsourcing enables an organization to augment in-house capabilities without making long-term commitments or large capital investments,” the study said, based on a survey of 132 IT organizations in the U.S. and Canada. The onus falls on IT executives who need to “continually evaluate the potential of outsourcing to help meet their tactical and strategic objectives.”
Perhaps unsurprisingly, it is large organizations – those with IT operating budgets of $20 million or greater – that are leading the trend, spending 7.8 percent of their IT budgets on outsourcing, the study showed. Most of the migration to third-party providers is done for help desk and web/e-commerce operations.
Outsourcing of disaster recovery and desktop support are the IT functions with the greatest potential for successfully reducing costs, and the outsourcing of web/e-commerce operations and IT security are the functions found to have the greatest potential for improving service, the study found.
Another trend the study identified is a rapid growth of SaaS, as evidenced by findings that 65 percent of organizations outsource application hosting. This is the most frequently outsourced function in the study, with organizations reporting that they plan to increase the amount of work they outsource.