Cost-cutting: Top priority for outsourcing

Savings near 20 per cent, claims study

Companies have reduced their spend on IT services and business transformation by almost one fifth by turning to outsourcers, according to a survey.

Businesses canvassed by outsourcing advisory firm TPI have saved about $50bn by turning to third parties to help deliver their IT services and improve business processes.

The firm surveyed 120 companies it had advised on sourcing over the last five years. TPI found its clients saved on average more than 33 per cent. After one-time and ongoing management expenses, the savings averaged more than 17 per cent.

Outsourcing IT has saved companies almost a fifth
(Photo credit: Shutterstock)

According to TPI chairman and CEO Michael Connors the majority of businesses, 60 per cent, said that reducing costs was "their number one reason for implementing sourcing strategies".

Last year Europe became the world's highest spender on outsourcing, with companies based in Europe spending more on IT outsourcing than those based in any other region of the world.

In 2010 UK companies are expected to increase the amount they spend on outsourcing back-office functions, such as HR and finance.