Conclusion 04

By Gary Bolles  |  Posted 05-15-2002 Print


EUC with HCI: Why It Matters

Conclusion 04: Drivers

While the recession has loosened the tight IT labor market, IT execs still feel compelled to outsource because they lack staff or skills. That makes outsourcing a necessity, not a choice—hence IT execs probably feel they lack the leverage to bargain for better deals when they renew outsourcing contracts.

When asked for their top reason for outsourcing, 25% gave cost savings as their leading reason, up from 4% in 2001. But when asked for their top three reasons, a lack of internal expertise (49%), focusing on core competencies (49%) and lack of internal staff (43%) rated higher.

Larger companies are more likely to outsource to develop applications and capabilities quickly, 26% to 17%. Smaller companies, however, more often outsource so they can focus on core competencies, 54% to 47%, respectively—one of the most frequently discussed rationales for outsourcing.

Twenty-two percent of CIOs said they wouldn't use the same outsourcing company again. Reasons included a strong preference to build internal staff (62%), the function being too core or sensitive to outsource (42%) and not enough value for the money (40%).


Submit a Comment

Loading Comments...
eWeek eWeek

Have the latest technology news and resources emailed to you everyday.

By submitting your information, you agree that cioinsight.com may send you cioinsight offers via email, phone and text message, as well as email offers about other products and services that cioinsight believes may be of interest to you. cioinsight will process your information in accordance with the Quinstreet Privacy Policy.

Click for a full list of Newsletterssubmit