Friday, June 01, 2007

IT outsourcing: the expert view


IT outsourcing is a way for companies to pass the day-to-day running of their IT business processes to third-parties.

Although not uniquely a technology concept, outsourcing IT has become a key consideration for all IT directors.

Most business processes rely heavily on technology, thus IT outsourcing became a popular option in the 1990s. Companies identified the capital, time and space-savings associated with reductions in staff, training, equipment and work environments as advantages of outsourcing IT.

An outsourcer has highly trained engineers and consultants with expertise in particular technologies and business processes. Businesses harnessing outsourcing negate the need to invest heavily in the recruitment of qualified staff as well as the training of existing workers. IT outsourcing also addresses the problem of skills shortages which regularly slows the delivery of IT projects.

The avoidance of expensive recruitment activities, and all the costs associated with permanent staff, meant IT outsourcing was seen as a cost cutting measure.

However, businesses are now viewing outsourced IT as an opportunity to create new business through improved performance such as better customer relationships.

IT outsourcing comes in many forms. A bank may outsource its call centre operations to an offshore location such as China or India. The same bank could decide to hand over the management of its entire IT infrastructure or even its application development to a partner. A council could put management of its contact centre in the hands of a third-party specialist, while an SME could decide to outsource its IT security function to keep up with rapidly changing threats.

Major outsourcers include; EDS, Accenture, Unisys, BT, CSC, Capita, PricewaterhouseCoopers, Fujitsu, LogicaCMG and CapGemini.