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Fundamental Strategy Shifts in Outsourcing, Reports IDC

  • 12 October, 2004 14:45

<p>NORTH SYDNEY, OCTOBER 12th, 2004 - IDC's recent research findings indicate that cost savings are once again the primary driver for organisations choosing to outsource. IDC has just released a report titled "Shifting Perceptions: IDC's Australian Outsourcing Survey", that monitors user satisfaction levels with their existing service providers and the expectations of organisations looking to procure these services in the near future.</p>
<p>"Driving the costs down has become the primary driver for organisations looking at using external service providers for provision of IT solutions and services, whereas last year access to skills and resources was cited as the foremost driver. The focus as far as IT assets are concerned has moved from 'capital expense' to 'operating expense' and we will see a further movement down this line with the pricing models becoming more performance-based with extensive risk sharing," said Aprajita Sharma, IDC Outsourcing and BPO Analyst.</p>
<p>IDC's outsourcing report also reveals that whilst the overall satisfaction levels have improved since last year, areas where customers place highest importance when selecting a provider are the areas where providers do not fully meet their clients' expectations. This indicates that suppliers should take the opportunity to redress their approach and performance.</p>
<p>"Australian outsourcing providers are grappling with a dynamic and competitive environment. Customers are more demanding, educated and volatile. Added to this mix is the dilemma of how to balance profitability and productivity imperatives with optimising performance to the customer for long-term growth and market advantage. With this in mind, it is increasingly important to maintain the customer base and keep customers happy," commented Kathy Benson, IDC Research Manager for Outsourcing and BPO.</p>
<p>Key findings from the survey:</p>
<p>* Competitive differentiation will centre on vertical expertise and alignment and the ability to integrate management consulting and business expertise into the services provisioned.
* Organisations are looking at outsourcing as a vehicle to procure a host of other diverse services.
* A host of risks are still attributed to a decision to outsource, and there has to be a joint effort on the part of the outsourcing service provider and the organisation to develop an effective risk-mitigation strategy.
* Most organisations are looking at renegotiating their current contract with very few indicating a desire to insource.
* The SMB market still remains untapped.</p>
<p>This survey consisted of 204 in-depth interviews from small, medium and large Australian businesses across various vertical market segments.</p>
<p>To purchase this study, please call the IDC sales team on (61 2) 9925-5300 or email Gary Clarke on</p>
<p>For press enquiries please contact:</p>
<p>Aprajita Sharma
Market Analyst, Outsourcing and BPO
Phone: 61 2 9925 2257</p>
<p>Kathy Benson
Research Manager, Outsourcing and BPO
Phone: 61 2 9925 2225</p>

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