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IT outsourcing could be set for a major rise

money
(Image credit: Image Credit: MK photograp55 / Shutterstock)

Businesses are increasingly open to outsourcing IT functions to external providers, thanks in part to the pandemic.

This is according to a new report from Whitelane Research and PA Consulting. Polling more than 250 UK businesses with the highest IT spending, the two firms found that, two-thirds (65 percent) plan to outsource their IT over the next two years, at least at the same rate as today. A third said they will look to increase outsourcing.

The number one motivator for outsourcing is cost reduction, as cited by 66 percent of the respondents. Better scalability and a greater focus on core business were also cited as major benefits.

All in all, most respondents seem to be satisfied with their IT service providers, but even more so with cloud providers. Analysis of 878 cloud sourcing relationships found that 89 percent were deemed satisfactory. Amazon Web Services (AWS) is ranked number one for infrastructure cloud platforms, while Microsoft 365 kept its top spot for software cloud platforms. 

"It is evident that industry has embraced the changes that have come about since Covid-19 and used the opportunity to reduce Opex, introduce new ways of working, focus on innovation and improve productivity,” said Manish Khandelwal, IT Transformation Expert at PA Consulting. 

“Covid-19 accelerated the pace of digital transformation and customers, service providers and employees have all have come together and demonstrated unprecedented agility and resilience. As businesses look to grow post-pandemic the demand is expected to increase, digital transformation across all industries will speed up and the war for talent will only intensify. This is good news for those that can differentiate – particularly those that can seamlessly integrate core IT outsourcing solutions with cloud platforms and build attractive employee value propositions to hold and attract the best talent."