Fiftythree per cent of organisations in Europe said they will outsource more in 2010, and 40 per cent of organisations are planning to increase their external IT services spending, according to a recent survey from Gartner, Inc.
The survey found that the percentage of organisations spending 50 per cent to more than 75 per cent of their IT spending on external service providers is on the rise. "However, the results also showed that the pressure on capital and IT operating expenditure is still strong, and European organisations expect providers to deliver further cost reductions," said Claudio Da Rold, vice president and distinguished analyst at Gartner. "Although 40 per cent of respondents said that they will increase the external share of their budget, only 24 per cent said that they will increase the budget for providers, and almost a quarter of organizations still expect that their IT services budget will continue to decrease in 2010."
The online survey was conducted among 206 organisations in Europe during in the first quarter of 2010. The survey was directed at individuals who were involved in decision making on outsourcing and IT services in 2010.
The survey also showed that organisations of all sizes and with IT budgets of various magnitude are now showing an interest in outsourcing. It found that 14.7 per cent of organisations with IT budgets of less than €1 million expressed interest in outsourcing, which compares to only 6.1 per cent of organisations in this category in 2009.
In times of recession, organisations usually concentrate on cost cutting and optimisation, followed by a recovery period with a clear focus on business growth and operating competitively. In Europe, things appear to be more complex. Although respondents in Europe are still focusing on cost control when defining their goals for outsourcing and service provider relationships, they increasingly require access to resources and capabilities, flexibility and scalability. "This means that 2010 is bringing sourcing strategists in Europe a more complex set of business requirements that aren't easier to address," said Mr Da Rold.
After a few years of continuously increasing interest in industrialised services based on alternative delivery models, such as software as a service (SaaS), cloud computing and infrastructure utility (IU), interest among European organisations has peaked, while adoption is on the rise. For example, SaaS and IUs' implementations were up 6.1 per cent and 5.1 per cent in 2010, respectively.
"Organisations in Europe are expecting - or are in need of - growth, but they are also still highly cautious," said Mr Da Rold. "Although we conducted this survey in the first quarter of 2010, before the start of the Greek financial crisis, we believe that the cautious expectation of growth will continue in Europe beyond 2010. Regardless of the future direction of the economy, European businesses and their service providers need to optimise their multisourced environments, while increasingly adopting industrialised IT services."
Additional information is available in the Gartner report "Survey Analysis: Outsourcing and IT Services Priorities, Europe, 2010". The report is available on Gartner's website at http://www.gartner.com/...
Gartner analysts will further discuss outsourcing and IT services trends at the Gartner Outsourcing & IT Services Summit 2010 held in London, 20-21 September. At the Summit, analysts will examine how to take advantage of industrialised services and cloudbased solutions, but will also provide advice on how to master the design and management of multisourcing. The Summit will help organisations prepare for the next economic cycle and develop new approaches to service aggregation and management. For complete event details on these events, please visit: www.europe.gartner.com/.... Members of the media can register for the Summit by contacting Laurence Goasduff at laurence.goasduff@gartner.com.
The survey found that the percentage of organisations spending 50 per cent to more than 75 per cent of their IT spending on external service providers is on the rise. "However, the results also showed that the pressure on capital and IT operating expenditure is still strong, and European organisations expect providers to deliver further cost reductions," said Claudio Da Rold, vice president and distinguished analyst at Gartner. "Although 40 per cent of respondents said that they will increase the external share of their budget, only 24 per cent said that they will increase the budget for providers, and almost a quarter of organizations still expect that their IT services budget will continue to decrease in 2010."
The online survey was conducted among 206 organisations in Europe during in the first quarter of 2010. The survey was directed at individuals who were involved in decision making on outsourcing and IT services in 2010.
The survey also showed that organisations of all sizes and with IT budgets of various magnitude are now showing an interest in outsourcing. It found that 14.7 per cent of organisations with IT budgets of less than €1 million expressed interest in outsourcing, which compares to only 6.1 per cent of organisations in this category in 2009.
In times of recession, organisations usually concentrate on cost cutting and optimisation, followed by a recovery period with a clear focus on business growth and operating competitively. In Europe, things appear to be more complex. Although respondents in Europe are still focusing on cost control when defining their goals for outsourcing and service provider relationships, they increasingly require access to resources and capabilities, flexibility and scalability. "This means that 2010 is bringing sourcing strategists in Europe a more complex set of business requirements that aren't easier to address," said Mr Da Rold.
After a few years of continuously increasing interest in industrialised services based on alternative delivery models, such as software as a service (SaaS), cloud computing and infrastructure utility (IU), interest among European organisations has peaked, while adoption is on the rise. For example, SaaS and IUs' implementations were up 6.1 per cent and 5.1 per cent in 2010, respectively.
"Organisations in Europe are expecting - or are in need of - growth, but they are also still highly cautious," said Mr Da Rold. "Although we conducted this survey in the first quarter of 2010, before the start of the Greek financial crisis, we believe that the cautious expectation of growth will continue in Europe beyond 2010. Regardless of the future direction of the economy, European businesses and their service providers need to optimise their multisourced environments, while increasingly adopting industrialised IT services."
Additional information is available in the Gartner report "Survey Analysis: Outsourcing and IT Services Priorities, Europe, 2010". The report is available on Gartner's website at http://www.gartner.com/...
Gartner analysts will further discuss outsourcing and IT services trends at the Gartner Outsourcing & IT Services Summit 2010 held in London, 20-21 September. At the Summit, analysts will examine how to take advantage of industrialised services and cloudbased solutions, but will also provide advice on how to master the design and management of multisourcing. The Summit will help organisations prepare for the next economic cycle and develop new approaches to service aggregation and management. For complete event details on these events, please visit: www.europe.gartner.com/.... Members of the media can register for the Summit by contacting Laurence Goasduff at laurence.goasduff@gartner.com.
