Cloud computing might ultimately usher in an era where more IT assets and functions live off premise, but one of the things that jumped out of a recent survey about outsourcing is there is still a lot of customer churn when it comes to relying on IT service suppliers.
The IDG Enterprise Outsourcing & Service Providers Survey of 1,176 IT executives shows that, even as some companies look to outsource specific functions, others that have already gone that route prepare to bring those same functions back in-house.
Consider desktop management. About a fifth of the respondents (17%) outsource this function and 9% more plan to do so in the next 12 months. But another 6% that are currently outsourcing desktop management say they will bring it back in-house in the next 12 months, and 10% more say they had previously tried it but brought it back in-house in the last five years.
Said another way: 17% are happy outsourcing desktop management, 9% are looking at it as a new answer and 16% will or have already retreated. Four other critical areas examined the same way (and ranked here more to less happy):
- Web hosting: 39% content with outsourced arrangement, 9% will outsource in next 12 months, 15% will/have reclaimed.
- Email: 26% outsource; 14% plan to, 15% no more.
- Network management: 21% yes sir, 8% going to, 17% not worth it.
- Business continuity/Disaster recovery: 21% outsource, 13% plan to, 18% what were we thinking about?
Corporations, it would seem, are more content outsourcing neatly compartmentalised functions like web hosting and email, but clearly companies servicing all of these categories have their work cut out for them.
In fact, when you get up to the 10k foot view, the opinions of outsourcing in general are not stellar. Asked, "How effective is your company's outsourcing strategy as a tool for enabling your company's key business goals?" 18% said extremely effective, 59% said somewhat effective and 22% said not effective.
So why outsource at all then? Respondents said: to access skills not available in-house (52%), for cost reduction (50%), to manage variable staffing needs (44%), to support or enable new business initiatives (35%) and to improve business or technology processes (42%).
Interestingly enough, of the functions and processes currently outsourced, 75% on average are provided onshore, 8% are nearshore and 16% are provided offshore.
Only time will tell if the current cloud rush will significantly change the appetite for outsourcing.