IT Outsourcing Is Changing But Still Appealing

Making the decision to outsource some or all of your IT systems is a difficult decision to make but the appeal is stronger than ever, says Karl Flinders, services editor at Computer Weekly.

He points out that while the evolution of IT means firms will often need to make regular investments into the their computer infrastructure, lowering costs is the priority for most in this current climate.

Indeed, a recent study conducted by the consultancy KPMG found that 70 per cent of business decision makers made the move to outsourcing because it can significantly lower their overheads.

However, the study also found that factors such as access to skills (51 per cent), quality improvements (48 per cent) and ways in which to improve the business (21 per cent) are all becoming increasingly important.

Robert Morgan, director at Burnt Oak Partners, a London-based outsourcing consultancy, told Mr Flinders that despite these undeniable benefits, firms should still only approach outsourcing after they have first made sure what level of service is right for them.

“Once a decision to outsource is made, there is no going back without considerable pain, risk and investment to bring it back in house,” he said.

General Motors can be seen as an example of a firm which is currently going through the process of reversing its outsourcing and bringing more operations back in-house.

Currently the car manufacturer uses third party companies for 90 per cent of its IT with just ten per cent carried out in-house, but it is looking to completely reverse this.

Mr Flinders believes that cloud computing is also set to change the way in which companies view outsourcing.

He said: “The cloud, which is a form of outsourcing where many companies share resources on demand, will soon become a dilemma for business. The lower costs, flexibility and ability to change suppliers is attractive compared with fixed-term, fixed-cost outsourcing contracts.”

Source: ihotdesk
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