New data on IT outsourcing indicates that enterprise organizations are looking past the recession for ways to grow...
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their businesses globally and expecting IT outsourcing to play a big role in that effort, a new study shows.
"There's clearly an impetus in the industry to move into these global models," said Phil Fersht, research director in AMR's global business and outsourcing services division, and co-author of the study. "Close to half are looking to transform or re-engineer their processes, and do things a little bit smarter in their organization."
An executive at IBM, which recently signed a five-year global IT services agreement with American Express Co., agreed with that trend. "Clients are looking for ways to be innovative around operating more efficiently, and things that can help them redesign and refine business models to run their market," said Carolyn Maher, vice president of IBM global technology services.
American Express, she said, was specifically looking to be better positioned for growth with the contract, which focuses on systems management processes in a global environment. "They're thinking about where they want to be three or five years from now," Mayer said. "This starts to help them in that strategic journey." American Express declined to comment for this story.
IT outsourcing activities recovering
The AMR report, based on 700 survey responses, projects modest contract growth in the third quarter of 2009, "with a notable spike in new contracts and existing contract augmentation" in the fourth quarter of this year and first quarter of next year.
IT outsourcing contracts dropped sharply in the third quarter of 2008, and new IT outsourcing activities remained fairly stagnant as organizations focused on critical management decisions around business focus and company stability.
The IT outsourcing trends were largely consistent across the disciplines of application development, hosting and IT infrastructure management. Roughly the same percentage of companies will increase their amount of IT outsourcing or keep it the same (40% each), while about 10% of companies are either outsourcing for the first time or decreasing their use of IT outsourcing.
The report states that these areas are resuming with a similar uptake to the pre-recession era. Other areas seeing a pre-recession surge include finance and accounting business process outsourcing (17% considering it) and human resources outsourcing (12% examining it for the first time).
Let us know what you think about the story; email: Rachel Lebeaux, Associate Editor