European financial services companies are expected to spend a total of £27bn on IT services in 2005, but less than 30% will outsource any strategic projects by the end of 2006, says analyst Gartner.
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“Most financial services providers (FSPs) currently use outsourcing tactically to augment staff for faster project turnaround or to reduce operational costs, rather than for strategic value,” said Gartner analyst Kimberly Harris-Ferrante.
“FSPs should now begin outsourcing strategic projects in order to gain larger-scale, enterprise-wide value,”
Strategic projects have different dimensions to normal, tactical projects, Harris-Ferrante said. They are more complex in that they focus on blending the use of IT outsourcing and business process outsourcing to enhance and transform the organisation.
She said the nature of strategic projects means they require a different structure of contracts, relationship model and metrics.