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Budget percentage allocated to IT outsourcing edges down

September 10, 2014

IT outsourcing budgets as a percentage of the total IT budget edged down this year, according to Computer Economics’ report, IT Outsourcing Statistics 2014/2015.

Spending on outsourcing is averaging 10.2 percent of total IT spending this year, down slightly from 10.6 percent in 2013 and a more significant drop from the 11.9 percent peak in 2012.  This year’s decline marks a downward move for the second year in a row and signals that organizations are investing in internal IT operations as the recovery reaches a more mature and sustainable phase, according to Computer Economics.

“From a broad perspective, the most likely explanation for the downward tilt in outsourcing as a percentage of the total IT spending is the ongoing economic recovery,” said John Longwell, vice president of research for Computer Economics.

The study also found fewer organizations this year are outsourcing help desk, desktop support, and application maintenance functions. Other functions have flat year-over-year trend lines, including data center, application development, database administration, network operations, and disaster recovery outsourcing. They all are being outsourced at about the same frequency this year as the prior year.

However, the survey found more organizations are outsourcing IT security work as well as Web operations.