Project Description

Cost Savings and Staff Reallocation: Major Benefits of IT Outsourcing

Cost savings are a major benefit of IT outsourcing but staff reallocation represents the biggest advantage for companies that use outsourced IT vendors, according to a recent survey. InformationWeek’s “2012 State of IT Outsourcing” survey of 564 respondents found that of the 82 percent that reported using external IT services, most rated cost savings as a top benefit while one in five said it was a primary advantage. The ability to free up staff to work on more strategic initiatives was the greatest benefit of outsourcing IT, according to the survey.

In addition to staff reallocation and cost savings, the top five benefits of IT outsourcing included the ability to deliver projects that in-house IT staff could not, access to industry-specific expertise, better alignment of IT-related staffing and costs with business needs, and the ability to deliver projects more quickly.

Overall, respondents reported that 27 percent of outsourced IT services were of better quality than in-house services and 45 percent of outsourced IT services cost less. Meanwhile, respondents said that the five biggest concerns for outsourcing IT were communication problems, unforeseen costs, time required to manage contractors, lower quality work, and lack of specific industry understanding.

Furthermore, 29 percent of the organizations that outsourced IT services fired an outsource vendor in 2012, up from 24 percent in 2011.

“The survey shows that the benefits and concerns associated with IT outsourcing are in alignment with what we feel we see in the industry,” said Patrick R. Wiley, President and Chief Operating Officer of Aldridge, an IT outsourcing company based in Houston. “We also feel the survey justifies the commitment we have to our core values, which include building the highest possible trust with clients in everything we do and ensuring that every decision we make is in the client’s best interests.”

“Our promise to our clients addresses the service issues some companies are having with their IT outsourcing vendors,” Wiley said. “Maybe that’s because we see ourselves as a trusted long-term partner, not a transient vendor. That means a lot. Just ask our clients.”