IT outsourcing still being taken up by many firms for first time

Experts in IT outsourcing have noted many companies are still coming to use outsourcing for the first time.

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Category IT Outsourcing
Article date 05 March 2014
IT outsourcing still being taken up by many firms for first time
Many companies are taking up IT outsourcing opportunities for the first time, despite the industry being well established, an expert has said.

Speaking to Computer Weekly, commercial technology partner at law firm Kemp Little Paul Hinton said the array of SME's taking on such services is wide, from banks and brokers to government bodies and pharmaceutical firms to fashion retailers.

He remarked: "We have seen a large number of businesses, for example, migrate to one of the many different types of multi-tenant data centre offerings and then decide to review the way that they manage and support their systems, often replacing in-house systems and support for fully managed solutions of one kind or another."

Listing software-as-a-service among the outsourced products available, he said first-time users of outsourcing are now tending to enjoy more success adjusting to using outsourcing than used to be the case, with the rate being "significantly higher than 20, ten and even five years ago".

Management consulting partner at KPMG, Lee Ayling also backed the use of outsourcing by companies who had yet to try it. However, he noted that the surest route to success is to do it through a company with past experience of providing outsourced services to first-timers.

Dispelling one possible misconception, he remarked: that this does not need to be a major US or Indian firm, but emphasised that SMEs should "do the research" before choosing an outsourcing provider. He also noted that the cloud is playing a part in outsourcing growth, even though it is a new development.

Companies in the UK are more likely to use multiple sources of outsourced IT services than anywhere else in the world, research by  the Information Services Group found last month.

In a survey of 2,000 enterprises around the world, it found 44 per cent of UK firms use more than one service provider, four times as many as companies in the US, who prefer to use just one. Indeed, only six per cent of locally outsourced projects rely on just one source.

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