III. Services and Outsourcing Spending
Services and outsourcing spending in line with the marketSurveyed CIOs say their projected spending on services and outsourcing is apace of the broader market at five per cent.
- Offshore outsourcing is fastest growth area.
- More “wallet share” is moving to offshore services long term.
- 30 per cent cited cost-cutting as main reason for outsourcing.
Application Development, Consulting, BPO
- 60 per cent of respondents plan to increase spending on services.
- 60 per cent of respondents plan to increase application development outsourcing.
- Business process outsourcing (BPO) spending is up approximately five per cent.
- Growth in offshoring is outpacing the broader market.
- 53 per cent indicated they plan to increase their outsourcing to offshore companies.
- More than 30 per cent indicated offshore spending plans are up five to 10 per cent, while a similar number reported outsourcing spending plans up one to five per cent.
Budget Allocation to In-House vs. Offshore
- Over two-thirds of respondents dedicate less than 10 per cent of their IT budget to offshore in both the short term and long term.
- Long term, however, more than 10 per cent of respondents plan to commit 30 to 40 per cent of their IT budget to offshore.