IT Outsourcing – Tapping Benefits Beyond Cost Saving

The word ‘outsourcing’ inevitably evokes an image of companies transitioning a heavy chunk of their business to distant countries. Outsourcing is blamed incessantly for job cuts. However, it is not necessary for companies to entirely hand out the management of their major operations to third parties. Instead, they can identify the operations that are absorbing more cost and outsource only those operations. Doug Drinkwater’s article at CIO presents statistics and expert views on the advantages and disadvantages of modern-day IT outsourcing.

IT Outsourcing Statistics

Given their ever-growing list of technological requirements, outsourcing is still a crucial function for IT directors. The market for IT outsourcing companies has grown exponentially, and they provide anything from fully managed services to ad-hoc support.

Gartner predicted that global IT spending would reach $1.19 trillion in 2021. $490 billion will be slated for consultancy and $475 billion for implementation services, managed services, infrastructure, and application support.

In a separate analysis, Global Industry Analytics predicted that between 2020 and 2024, the value of the IT outsourcing market will increase by 5% annually.

Whereas the Boston Consulting Group (BCG) conducted a survey of 200 businesses from a variety of industries. It discovered that 79% of them had requested assistance from service providers through COVID-19. Additionally, the following percentage of respondents have asked the following:

47% requested longer payment terms.45% asked for price reductions.41% requested free support for more processes.

Benefits of IT Outsourcing

The $92.6 billion market for IT outsourcing is thriving, according to Forrester senior analyst Jeffrey Rajamani. He also notes that partners may provide CIOs more stability in a volatile industry while assisting them in being more innovative and resilient. Rajamani says, “From IT maintenance to CRM to BPO, outsourcing is firmly ingrained in company culture and is becoming central to the smooth operation of the world’s big firms.”

Businesses are outsourcing not merely for cost efficiency but also for effectiveness and access to talent. They also want to concentrate on their core competencies, cutting-edge innovation, modernization, and business transformation.

Furthermore, the author shares expert views on the benefits and challenges of IT outsourcing.

To read the original article, click on https://www.cio.com/article/408916/why-cios-continue-to-invest-in-outsourcing-despite-the-warning-signs.html

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