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Low-cost IT could Accelerate as Firms Outsource to Cut Costs

by: Karen Cayamanda

Tuesday, September 21, 2010 | Outsourcing News |

Gartner, Inc.’s report shows that uncertainty in economy and business, increasing competition, and industrialization of IT services can drive businesses to outsource and cut costs, speeding up the increase of low-cost IT.

According to Claudio Da Rold, vice president and analyst at Gartner, the price will remain a deciding factor, and organizations outsource IT processes to reduce costs. The report also shows that with industrialized IT services, service providers can offer “one-to-many” services at a price that’s lower compared to IT processes done in-house.

“Cost cutting, restructuring and the move toward offshore outsourcing continue to increase while growth in emerging countries accelerates, widening the gap between high-growth areas (e.g. Asia/Pacific and Brazil, Russia, India and China) and stagnant economies (e.g. Europe, Japan and North America), and low and high-cost IT providers. This trend could drive a prolonged reduction in the unit cost of IT services, significantly affecting the IT services market by 2013,” Da Rold said.


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