Outsourcing IT operations is one of the most successful ways a business can cut costs, figures from the latest Norton Rose survey show.

The report, entitled Outsourcing in a Brave New World, found that 87 per cent of consumer companies and 86 per cent of suppliers believe outsourcing is an effective way of driving down unnecessary expenses.

It also stated that in times of economic hardship during the credit crunch, many businesses had been forced to turn to IT outsourcing as maintaining their existing computer-based operations had become unmanageable on reduced budgets.

The report added that the challenge many IT outsourcing suppliers face at present is convincing companies that they need to fully embrace the capabilities offered by new technology processes such as offshoring and cloud computing.

Many potential customers believe offshoring in particular is a risky move.

“With offshoring I think the risks are security and protection of data and political and reputational risk. There are also significant issues bringing [it] back in-house. If customers feel they have made a mistake it is going to be very difficult for them to bring it back,”

said the general counsel of one unnamed European telecoms supplier.

Norton Rose’s survey found that take-up of cloud-based platforms is gradually increasing but some firms simply cannot get to grips with the range of options available to them.

It explained that there are effectively three types of cloud available to companies; a private cloud, a public cloud or a hybrid cloud.

In a private cloud, all the data is controlled by a single company or body. A public cloud is one controlled by an outsourced company but supplied to a business for their usage and a hybrid cloud is where they get the best of both worlds – particularly handy for companies concerned about data recovery following a disaster.

81 per cent of companies are investigating cloud options according KPMG’s recent ‘Clarity in the Cloud’ study.