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Outsourcing shows healthy growth

Karl Flinders

Many businesses still have immature IT sourcing and governance structures that are not in line with business objectives, according to Gartner which predicted the global outsourcing market to grow 8.1% this year.

The analyst firm said that due to the immature structures the expected cost savings and other benefits are difficult to obtain.

Kurt Potter, research director at Gartner said in extreme cases the lack of trust and control to optimise the outsourcing relationship results in failure.

He said more organisations focused less on outsourcing for cost savings and more to use providers global delivery models to access the right skills at a reasonable price.

Despite the growth in the market Gartner said IT outsourcing and business process outsourcing contract values decreased overall by 50% in 2007.

The analyst said that companies are outsourcing more, but electing to use more than one supplier, which means deals are smaller in size and not significant enough to report.

"In 2008, we expect to see some early adopters of multisourcing to consolidate around fewer providers to reduce their service integration costs and harvest the benefits of better relationship management with fewer strategic suppliers," said Potter.


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