Recession drives more IT outsourcing

Over 60% of UK businesses will increase the amount of IT functions they have carried out by suppliers while less than 10% of UK businesses will reduce the amount of IT they outsource.

Over 60% of UK businesses will increase the amount of IT functions they have carried out by suppliers while less than 10% of UK businesses will reduce the amount of IT they outsource.

The latest survey of over 100 UK businesses carried out by sourcing consultancy Equaterra revealed that the recession is not reducing businesses' demand for outsourced IT services. The study was conducted during the current economic downturn.

"[We] have not found any indication that economic conditions will significantly negatively impact outsourcing demand in the UK market. Indeed [we] expect that economic conditions will further drive demand for outsourcing as UK organisations more aggressively seek means to reduce costs, defer or limit future investments, and realign operating models to lower revenue levels," said Equaterra.

According to the report 63% of firms are looking to outsource more compared with54% in the same study last year.

"Our findings show that outsourcing is significantly increasing in popularity among major UK organisations," said the report.

"It is equally clear that sourcing or the use of third party business and IT services in general, and the outsourcing model to access those services in particular, has become an established and commonly used business tool."

The report found there has been a temporary slowdown in spending on IT outsourcing by certain companies as businesses experience turmoil. But it said spending is likely to be stronger when companies set their strategies for dealing with the slowdown.

The survey said 80% of businesses cite cost savings as the principal driver for increasing existing levels of outsourcing. This is an increase of 11% compared with last year.

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