Demand for IT outsourcing is expected it rise sharply as a result of the credit crunch, it has been claimed.

According to consultancy EquaTerra, IT outsourcing can help companies reduce operating costs and streamline their technology provision to better survive the uncertain economic climate.

The group also recommends modernising IT departments by identifying new sources of revenue, evaluating investments immediately and performing an extra-ordinary review.

“Consider outsourcing to modernise or upgrade IT infrastructure and to deploy new applications, thereby avoiding upfront capital expenditures and having to employ staff for ongoing maintenance,” the organisation concludes.

Last week, IT services and new media agency Conchango claimed UK organisations are reassessing their IT expenditure and the role of digital solutions within business as a result of financial cutbacks.

The enterprise went on to recommend financial institutions incorporate transparency and user-centred design in their online propositions in order to instil trust while cross-selling and retaining customers.