Recent high profile discussions over insourcing and outsourcing have demonstrated that the debate over getting external organisations to run IT or other services remains as strong as ever says David Bicknell.


F


outsource To


or the last few years, the default position for organisations looking to reduce their costs has been to turn to vendors to outsource their operations. They may be business process outsourcing engagements, or, as in the case of some local councils, and in future some police forces, the relationship


may be wider, more transformational in nature, and planned to last many years. For cash-strapped local authorities and police forces (some of whom may already be sharing services), only an outsourcing deal will create the budget savings required. Do more for less has become a mantra. The outsourcing phenomenon has not looked like coming to an end. Until this year, that is. Although the worldwide spend on IT outsourcing services is on pace to expand 2.1% from 2011 to reach $251.7bn (£160.6bn) in 2012, there


question thatis the


or not,


has been a predicted decline in Western Europe of 1.9%, according to the Gartner research group. Western Europe, Gartner said, is continuing to suffer from a ‘challenging’ economic scenario that worsened in late 2011 and continues to affect government policy and end-user sentiment in many key European countries. “Reinvigorated economic pressure is delaying the willingness of many commercial organisations to focus on enhancing competitiveness rather than cost reduction,” the analysis said. “In addition, the European public sector will continue to see a cautious budget environment throughout 2012.”


In terms of different types of outsourcing, application outsourcing would expand 2% globally, from a 2011 spend of $39.9bn, reflecting enterprises’ need to manage extensive legacy environments and commercial off-the-shelf packages, while datacentre outsourcing, now a mature part of the


Volume 22 – Issue 4 |December 2012 27


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