Outsourcing spend to grow in 2010?

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The amount of money businesses are spending on outsourcing is set to grow in 2010, as a new report has shown over half of European businesses plan to increase their involvement.

The report from analyst firm Gartner showed 53 per cent of organisations in Europe plan to outsource more this year, with 40 per cent specifically citing external IT services.

The number of organisations spending 50 per cent upwards of their IT budgets externally is also on the rise, according to the report, but Claudio Da Rold, vice president and analyst at Gartner, claimed pressures on businesses to control expenditure was still strong.

”Although 40 per cent of respondents said that they will increase the external share of their budget, only 24 per cent said that they will increase the budget for providers, and almost a quarter of organisations still expect that their IT services budget will continue to decrease in 2010,” he said.

A more varied set of businesses are now considering outsourcing as an option, with an increasing amount of smaller firms keen on taking the leap too, the report suggests.

The survey showed 14.7 per cent of companies with an IT budget of less than €1 million were interested in outsourcing – up from 6.1 per cent in the same period last year.

“Organisations in Europe are expecting – or are in need of – growth, but they are also still highly cautious,” added Da Rold.

“Although we conducted this survey in the first quarter of 2010, before the start of the Greek financial crisis, we believe that the cautious expectation of growth will continue in Europe beyond 2010.”

He concluded: “Regardless of the future direction of the economy, European businesses and their service providers need to optimise their multi-sourced environments, while increasingly adopting industrialised IT services.”

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