Too Great Expectations? Can Customers Lower IT Costs Through Outsourcing?: Industry

Too Great Expectations? Can Customers Lower IT Costs Through Outsourcing?

Published Date: July 2005

Published By: IDC

Page Count: 19

Order Code: R104-20353

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Table of Contents
IDC 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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