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Firms Prefer IT Functions to Stay In-house

by: Sarah Joson

Friday, September 12, 2014 | Outsourcing News |

Outsourced IT Operations to be Brought Back In-house

A survey from IT research firm Computer Economics found that since economies are now more stable and mature, companies have been seen bringing back IT operations in-house.

Last year, IT outsourcing budgets averaged at 10.6 percent and even hit 11.9 percent back in 2012. But for this year, it only clocked in 10.2 percent.

Some of the IT processes that declined in outsourcing this year are help desk, desktop support, and application maintenance. However, data center, application development, database administration, network operations, and disaster recovery are in a slow and steady cycle.

According to John Longwell, President of research at Computer Economics, the ongoing economic recovery is the key contributor to the downward movement in outsourcing activity. He added that even if IT budgets are increasing, it is allotted to internal investments and not in outsourcing.

Moreover, the study pointed out that during the early stages of the recovery, organizations outsourced because they felt hiring full-time employees was risky. As economies gain stability, they are focusing on the improvements and manpower needed for them to progress.


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