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Slow Spending in Global ITO Sector this Year

by: Sarah Joson

Tuesday, February 18, 2014 |

Global IT Outsourcing Sector Spending Less

Wall Street Journal, PC Week, KPMG, Forrester, Gartner, along with other credible sources, are anticipating a slow and steady spending activity for the information technology outsourcing (ITO) sector this 2014.  

However, it was pointed out that the location and requirements of an operation generally dictate spending actions. Outsourcing is being highlighted by key trends such as agile development resources, reduced service delivery costs, social media processes, and mobile computing.

Andrew Bartels, Forrester Research Vice-president and Principal Analyst servicing CIOs, said 2014 will be a better year, but remains below average compared to the years it trailed. Data from the organization showed that even if IT outsourcing is the underdog this year, it will gain traction in 2015. The executive further explained that infrastructure-as-a-service will fuel the segment, and that the effect of the outsourcing deals signed in 2013 will only be realized in 2015.

Meanwhile, a press release from Gartner stated that the global IT outsourcing market will be valued at $288 billion in 2013, a 2.8 percent increase from the value posted in 2012. The organization also cited that currency-related factors affected the pace of growth, specifically in Western Europe and Asia-Pacific. However, emerging ITO markets in Asia-Pacific, Greater China, and Latin America were predicted to see a 13-percent growth in 2013 and 2014 due to expansion plans of global companies, which are likewise identified as new buyers of ITO.

With all of that considered, one thing’s for sure - CIOs will have to look elsewhere for affordable talent that will accommodate the requirements of a business. Innovation is also a pivotal factor for companies to spend, especially now that new processes such as mobility and the cloud are taking center stage, and clients are clamoring for them.

Technology will be a key factor for spending amongst businesses, amidst talks on other types of business tools such as outsourcing. As it evolves and as companies look to expand, spending will continue to grow.


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