Feeds

IT outsourcing not catching on with small.biz

Why are they missing the boat?

Bridging the IT gap between rising business demands and ageing tools

Small firms are falling behind in outsourcing IT functions, a new survey has revealed.

According to research by the Irish Computer Society (ICS), IT outsourcing has become common practice in Irish organisations, with some 72 per cent taking advantage of the services.

Smaller IT departments, however, appear to be holding on to their services inhouse, despite the traditional assumption that these firms would be more likely to farm out their IT applications.

"The fact that small organisations in Ireland are outsourcing IT services less than their larger counterparts perhaps suggests that outsourcing service providers do not focus their sales efforts on smaller firms," author of the study, Brian Kennedy of Lake Communications, said.

"However, a more worrying alternative explanation is that smaller organisations do not yet fully appreciate the relevance of IT in achieving strategic goals and sustainable competitive advantage over the long-term."

The study found that the most popular reason to outsource was to allow firms to offer extra IT services while concentrating on core competencies, rather than an attempt to reduce costs - although cost reduction is a consideration.

Less than four per cent of organisations outsource their IT functions completely. Some of the most outsourced services include hardware maintenance, application development, and application support.

"The complexity of managing information within organisations is increasing, requiring more resources to successfully administer," the study said. "Coupled with this fact is the information technology/information systems functions attempt to align itself closer to the organisation, grow its business value and subsequently move up the value chain. Outsourcing is seen as a method of achieving both of these outcomes."

The main reasons why 28 per cent of the Irish firms questioned haven't opted to outsource IT services are: uncertainty about the providers' ability to supply the required level of service, apprehension about gaining outsourcing benefits and goals, and concerns about the management of the outsourcing provider.

Copyright © 2007, ENN

The smart choice: opportunity from uncertainty

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple ran off to IBM
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.