Latest Statistics and Trends in the IT Outsourcing Industry

Dec 16, 2013

IT outsourcing has grown into a whole new industry that is rapidly developing and following its own trends. Have a look at these key IT outsourcing trends and outsourcing statistics for 2013/2014 to get an idea where the industry is going (the figures used are taken from a recent study by Computer Economics, Inc).

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IT Outsourcing Budgets Have Slightly Decreased

In 2012, the share of outsourcing in the total IT budget was 11.9%, and that share has dropped to 10.6 % in 2013. This drop is not very significant and is not seen as a long-term tendency. The most viable explanation is that the IT budgets are increasing, so this drop in the share does not necessarily mean businesses started outsourcing less.

Middle-Sized Companies Are Leading in Outsourcing

Large businesses used to spend the biggest share of the budgets on outsourcing, but this year midsize companies have become IT outsourcing leaders. In 2013, they assign 7.7% of their IT budgets on outsourcing, while for big companies this share is 6.9%.

The Most Frequently Outsourced Function: Application Hosting

In 2013 application hosting has replaced application development as the leading function in IT outsourcing. It is also the most rapidly growing outsourcing function: this year the number of businesses that outsource application hosting has increased by almost 10%, and 57% of these businesses are planning to outsource even more work next year.

The Most Unwillingly Outsourced Function: IT Security

IT security is the least frequently outsourced function: businesses prefer to keep it in-house. Meanwhile, they willingly outsource help desk and ecommerce operations.

The Best Value Outsourcing Functions: E-commerce, Data Center Operations, Network Operations, Disaster Recovery

Disaster recovery, data center operations, e-commerce, and network operations have become the functions that deliver the best value. When outsourcing these, businesses both cut down the expenses and increase the level of service.

Dedicated Developers Teams Are Prevailing Over Project Outsourcing

Businesses that outsource IT work, especially application development, tend to hire dedicated development teams rather than outsource the projects to third-party contractors. This can be explained by the possibility of direct communication with the dedicated developers and full control over the project, including the budget and the team members involved in the development.

Outsourcing IT projects, despite the seeming decrease in the overall share of IT budgets, remains a good option for businesses that want to cut down the costs without losing the quality. However, as the industry is evolving, reasons for outsourcing are not limited to saving money: companies have started outsourcing various IT functions also to increase the level and speed of service or improve operational flexibility.

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