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PRESS RELEASE/OUTSOURCING


Outsourcing attracts increasing investment by delivering proven benefits

PMP Research’s latest survey finds that UK companies are planning to increase their spending on IT outsourcing, with access to specialist skills and the desire to focus on their core business emerging as the key drivers for investment.

More than half (56%) of those organisations polled by PMP Research using the Evaluation Centre subscriber database www.evaluationcentre.com, say they plan to spend more on outsourcing over the next two years, while nearly a third (31%) reckon their outsourcing investment will remain at the same level as now. Only 11% indicate they will be cutting investment.

For many companies, outsourcing accounts for a large slice of their total IT budget, with 28% putting between 10% and 25% of budget into outsourcing and 13% pledging between 25% and 50% of their annual spend to third-party providers.

PMP Research’s survey uncovered some significant deals, with 11% of respondents reckoning to plough more than £10 million into a typical outsourcing contract. On the whole, though, contracts are more modest with 19% estimating a typical contract at between £50,000 and £100,000 and 13% investing less than £50,000.

Respondents were asked to rank their reasons to consider outsourcing, using a scale of 1 to 5. Aggregated scores identify the need to gain access to specialist IT skills (4.10) and the desire to be free to focus on the core business (4.01) as their main aims.

Enthusiasm for outsourcing is marked, with 87% of respondents claiming they would be prepared to sign up for an outsourcing contract again, given their experiences so far. Improved service levels and reduced risk emerge as their twin goals.

There is further evidence of positive outcomes with the finding that a third of companies (34%) maintain it is either ‘very easy’ (8%) or ‘easy’ (26%) to calculate the ROI from outsourcing.

Most of the companies in PMP Research’s survey (58%) have currently opted for ‘traditional’ outsourcing services, whereby a supplier’s staff work in the client IT department, or client IT staff transfer to the outsourcer. Managed services, adopted by 54% currently, are also popular.

In contrast, organisations are less interested in Business Process Outsourcing (BPO), with only a third (34%) signing up so far, or in offshore services (25%). The majority view problems in determining the boundaries of business processes as a significant barrier to taking this route.

Overall, companies are pleased with how their outsourcing contracts perform in practice. Most (80%) use Service Level Agreements as a way of monitoring contract performance, and 17% of the sample maintain that their SLAs are actually being exceeded, while the majority (36%) report their SLAs are being met exactly as required.

- ENDS -
Note for editors:
About PMP Research
PMP Research, founded in 1990, is the leading European independent analyst firm and part
of PMP Group Services. The firm provides bespoke research, analysis and consultancy on a
UK, European or global basis, typically within the IT, telecoms and professional services
markets.

Clients include Accenture, KPMG, AT&T, Cisco, Oracle and SAP.

PMP Research being part of the PMP Group, has access to a database of over
68,000 individuals. This unique facility reduces cost and timescales for any project
undertaken.

Press enquiries:
For more information please contact Cliff Mills on 0870 908 8767 or email cliffm@pmp.co.uk.

About the Evaluation Centre
www.evaluationcentre.com is the website and service centre to assist buyers of software, services and technology in their procurement process. It achieves this by dividing the site into four areas a) Strategy - this part of the site help users build their IT and Business strategy b) Supplier Evaluation - this part has over 150 suppliers evaluation reports and lists an additional 1200 suppliers c) Implementation - this part of the site provides guidance in terms of implementation best practice and finally d) the Service Centre - this part of the site provides help desk facility.

Press enquiries:
For more information please contact Steve Markwell on 0870 908 8767 or email stevem@pmp.co.uk.


PMP Research
15 Chiltern Business Centre
63-65 Woodside Road
Amersham, Bucks HP6 6AA
Telephone: 0870 908 8767



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