BizAnalyst Network: The Cost of Doing Business

Thursday, March 30, 2006

The Cost of Doing Business

Despite the new focus on improving business strategy or competitiveness through outsourcing, companies still rank lower costs as their top reason for sending work out-of-house.

According to a new Gartner survey that examined the outsourcing practices, issues and challenges of 945 individuals, more than half of the respondents said that they used tactical IT outsourcing primarily to attain short-term, cost-focused objectives. Correspondingly, Gartner also found that most organizations were not focusing their IT outsourcing efforts on improving business outcomes or competitiveness. Gartner sees focusing strictly on financial gains to be one of the biggest outsourcing mistakes. The firm found that larger companies were more likely to list cost cutting as a primary goal of outsourcing IT than smaller companies. According to respondents, other IT outsourcing drivers include improving speed, agility and flexibility and gaining access to technical expertise and skills. Top deterrents for IT outsourcing: data security and privacy and concerns about additional costs.

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http://ct.itbusinessedge.com/t?ctl=DABE04:3C5015E