INDUSTRY

Businesses can achieve on average cost savings of 27 per cent by outsourcing their IT infrastructure, a recent Impact Research study from Info-Tech Research Group reveals. Enterprises traditionally outsource IT in four areas -- infrastructure, application development, application support and help desk. Among companies that are good candidates, the best results are achieved by moving IT infrastructure to an outsourcing model. "Every enterprise should evaluate their infrastructure, both server and network, for an outsourcing fit. It has the highest average return, low variability of success, and few risks." said Jennifer Colasanti, research consultant with Info-Tech Research Group. The report finds that application development had the second highest average savings rate at 20 per cent, while application support offered 16 per cent and help desk 13 per cent. For research purposes Info-Tech defined outsourcing as any engagement where a third party has ownership over a deliverable. Info-Tech's Impact Research Report "IT Outsourcing with Purpose", also documents that cost savings are correlated to the percentage of IT budget being outsourced. As the percentage increases, the amount of savings declines given that cost savings no longer take the top priority. "In a third of the organizations studied, increased IT efficiency was the key motivator for outsourcing," said Colasanti. "In these instances benefit drivers like access to more expertise, repurposing of employees and the reduction of management overhead and internal training bring greater benefit to the business than cost savings alone." Colasanti notes that in addition to reducing the cost of existing operations by 13 to 27 per cent and improving efficiency, IT outsourcing can help small and fast-growing companies level the IT playing field with large enterprises, by providing similar advantages. Info-Tech Research Group recommends that when evaluating outsourcing, companies first identify their primary motivator. If organizational fit is not investigated appropriately, outsourcing can be a detriment to the company. "It's important to consider how much of the IT budget will be dedicated to outsourcing as well as the type of outsourcing planned," Colasanti said.