Credit crunch boom for outsourcing

Large UK organisations are more likely to turn to outsourcing as a way to save money during the recession.

A study by research firm EquaTerra of senior managers at 125 of the top IT spending organisations in the UK suggested that 63% are looking to outsource more, compared to 54% the previous year.

Cost remains a powerful driver with some 80% of survey respondents saying  that further cost savings was the main reason for increasing their levels of outsourcing.

Offshoring is on the increase. Nearly nine out of 10 organisations use Indian IT services firms to meet some of their needs, and 66% are using a combination of near- and offshore outsourcing as part of their strategy – compared to 57% the year before.

“These results clearly demonstrate that service providers with existing IT outsourcing contracts are unable to rest on their laurels,” said EquaTerra European chief operating officer Phil Morris. “As price becomes a more immediately pressing attribute than satisfaction, clients will seek opportunities to consolidate their IT service provider portfolio in an effort to gain economies of scale and drastically reduce spend levels.”
In terms of top suppliers, InfoSys gained the top spot for customer satisfaction this year (75%), followed by Cognizant (74%) and Capgemini (73%).  BT was the worst performing outsourcer in terms of customer satisfaction, with a 10% drop on 2006 levels to 50%.

The UK study examined Ј8bn worth of contracts, which included 330 of the biggest UK contracts from 125 of the top IT spending organisations in the UK.

Source: outsource

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