Large firms outsource special projects, according to survey

Sydney, Dec 1 (Asia Pulse) - The results of a survey released today show that about 40 per cent of large companies outsource special projects, mostly due to scarce IT labour, but also because of budgetary and management concerns.

Australian IT outsourcing provider IOCOM Ltd released the results of the survey, which was carried out in the US by IT market research company Cutter Consortium. Special projects are defined as those that are relatively short-term and do not require ongoing maintenance.

Phillip Walter, a director of strategic consulting at IOCOM, said the survey results reflect what is happening in the Australian market. Mr Walter emphasised the huge growth potential of IT outsourcing, in particular amongst small and medium-sized companies with between 20 and 300 workstations. He said that SMEs currently make up 47 per cent of the business community in Australia, yet under three per cent of those companies regularly outsource.

The percentage was set to rise rapidly in the future and had already started moving in that direction, Mr Walter said. The Cutter Consortium survey found that Y2K and e-commerce projects were amongst the most common special projects outsourced. Cutter senior analyst Sheila Green said companies outsource projects when they need expertise in particular skills such as figuring a distributing computing architecture or getting a project up and running quickly. Ms Green said she was not surprised by the survey results. "Companies need more contract personnel as the complexity of their work increases," she said.

According to another IT research firm, Input, roughly 75 per cent of companies are expected to employ some type of IT outsourcing by next year to remain competitive or to add to the resource and skills of their existing IT departments.