Medium-sized companies enjoy more gains from IT outsourcing deals than large companies, according to a recent survey from outsourcing analyst firm HfS Research and the London School of Economics.
Out of 277 companies that outsource, more than half (63%) of mid-sized firms said outsourcing had been a successful initiative to cut costs. Compared to 30 percent of large firms, 42 percent of mid-sized companies said their outsourcing contracts were very effective in terms of meeting compliance and regulatory requirements.
Smaller companies get more out of IT outsourcing because they take the “big bang” approach. According to HfS Research founder Phil Fersht, they put several business functions together to make a large outsourcing deal, unlike larger firms that tend to outsource in a step-by-step process. Fersht added that these companies do not usually adopt the way mid-sized firms outsource since they are large enough to tell service providers how they would like transfer business processes.
While service providers tend to target large clients, Fersht said they also need to tap medium-sized businesses so they can establish a balanced client portfolio.