The reasons why organisations engage in outsourcing relationships are changing, said Forrester at the firm’s Services and Sourcing Forum 2007. This is because those involved are beginning to understand its real value.
Stephanie Moore, Forrester vice president and principal analyst, said “Today people are realising that process improvement, standardisation, innovation or transformation benefits are much more valuable than pure cost savings.”
Malcolm Frank, Cognizant vice president of marketing and strategy, said 80 per cent of an average IT organisation’s budget is caught up in “dead money,” such as spending on maintenance and infrastructure, but firms are trying to change this profile by outsourcing to free up the budget to drive new capability for users. Frank pointed to the chief information officer at HP who has committed to transform the 80/20 rule to 20/80.
