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Too Great Expectations? Can Customers Lower IT Costs Through Outsourcing?Product Type: Market Research ReportPublished by: IDC Published: July 2005 Product Code: R104-20353 Description
This IDC Study examines IT outsourcing's impact on lowering both IT operational costs and IT capital investments by comparing expected budgetary changes of firms that outsource IT with firms who retain IT inhouse. According to Jason Bremner, director, outsourcing services, "Evidence points to IT budgetary increases being more common among companies that maintain IT inhouse but budgetary increases being greater among outsourcing customers." This study provides insights on how vendors can overcome lingering skepticism towards the outsourcing model. Table of Contents
Table of ContentsIDC Opinion Promote the 'Right Average Cost Savings' message. A comparison of mean cost savings and median cost savings suggests a much more positive story against the belief that IT outsourcing has not delivered cost savings for customers. In This Study Situation Overview Figure: Lowering Operating Cost Is Critical When Outsourcing Do Outsourcing Customers Lower Their IT Costs? Hypothesis #1: More companies that outsource IT will expect IT operating budgets to increase in the coming year, as compared to firms that keep IT inhouse Figure: Similar Proportions of Outsourcing Customers and Inhouse IT Shops Expect IT Operating Budget Increases Hypothesis #2: More companies that outsource IT will expect IT capital budgets to increase in the coming year, as compared to firms that keep IT inhouse Figure: Fewer Outsourcing Customers Expect IT Capital Budget Increases than Inhouse IT Shops Hypothesis #3: IT operating budgets are expected to increase by a greater amount among those firms that have outsourced, as compared to firms that keep IT inhouse Figure: Expected IT Operating Budget Increases Are Higher Among Outsourcing Customers Hypothesis #4: IT capital budgets are expected to increase by a greater amount among those firms that have outsourced, as compared to firms that keep IT inhouse Figure: Expected IT Capital Budget Increases Are Higher Among Outsourcing Customers IT Budgetary Increases Are More Common Among Companies that Maintain IT Inhouse but Budgetary Increases Are Greater Among Outsourcing Customers Future Outlook Higher Costs Will Cause Outsourcing Customers to Backsource IT Prospective Customers Will Keep IT Inhouse Due to Fears of Higher Cost Figure: Experienced and Inexperienced Outsourcing Customers Are Concerned of Increased IT Costs Essential Guidance Drive Cost Out of the Delivery Process Show How Your Customers Lowered Their IT Cost Increase Your Pricing Flexibility Promote the 'Right Average Cost Savings' Message Figure: Median Expected IT Operating Budget Changes Figure: Median Expected IT Capital Budget Changes Learn More Related Research Methodology Canadian Top Executive Survey IT Advisory Panel Synopsis |
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