IT outsourcing is on the rise. This is fuelled by the increase in IT spending for a digital transformation. Also, this is not just the private sector. The public and private sectors alike are keen to digitally transform.
Outsourcing is to obtain goods or services from an outside supplier. Much of this trend has been linked to a new breed of service providers. Most companies are expecting their IT budgets to grow or remain steady this year. However, the need to upgrade IT infrastructure is driving the IT budget for the annum. According to Whitelane Research and PA Consulting 71% of UK organisations plan to outsource again this year. Only 16% of respondents plan to insource more IT.
The most popular outsourcers are: Hexaware, Amazon Web Services, NIIT and Tata Consultancy Services.
Why has Outsourcing Increased?
The need to outsource has arisen from businesses wanting to increasingly adopt emerging and the latest technologies. This includes artificial intelligence, automation software, cloud computing and mobile applications.
The Whitelane research also stressed that because of these technology challenges, businesses are open to work with smaller suppliers and outsourcers. With the spending on IT increasing, companies can take advantage of the increased sources of tech investment.
What businesses are spending their money on in tech?
- Worldwide spending is projected near $4 trillion in 2019
- Cyber security threats will lead to spending of $125 billion
- Communication services see $1.4 trillion
- Data centres have $210 billion
- Devices see $679 billion
- Enterprise software is the fastest-growing area of tech investment
What are the reasons to invest in IT?
- Technology improves efficiency
- Security is the top priority
- To remain competitive
- Help to save money through increased productivity and profits.
Therefore, with these increased benefits of IT it is likely that outsourcing to remain a competitive business will rise.