Tough Year Ahead for IT Services
By BYC Newsfeed, On 11/16/09 11:46 PM
Responding to a still sluggish economy, IT executives in North America and Europe are taking a variety of measures to get more value for the money spent on IT services, according to the latest Enterprise IT Services Survey by Forrester Research. According to the survey results, IT contractors and consultants will see the deepest decreases in spending, while systems integration and outsourcing services will have the most increases. The survey of more than 900 IT executives and technology decision-makers in Canada, France, Germany, the UK, and the US offers insights into the decisions large companies are making with regard to their IT services and outsourcing.
Unlike during the last recession from 2001 to 2002, when outsourcing and offshoring experienced growth from firms seeking to reduce internal IT costs, the picture for IT services is much more mixed in terms of spending plans. When asked about changes they expect to see in their organization’s total spending on IT services, 30 percent of executives said they plan to increase spending on systems integration and project work, 26 percent plan increases in applications outsourcing, and 25 percent expect to increase spending on infrastructure outsourcing. However, 41 percent of executives expect to reduce spending on contractors, and 34 percent foresee lower spending on IT consulting. “The pressure to reduce IT spending is going to continue well into 2010,” stated Forrester Vice President and Principal Analyst John McCarthy. “The data shows no quick turnaround — it’s going to be a tough year for services firms as clients increasingly ask them to justify the ROI for IT projects and provide more value for a lower price.”
