Outsourcing IT returning to favour

Outsourcing of IT at every level appears to be moving up the manufacturing business management agenda again, according to a cross sector survey by Benchmark Research for consultancy Atos Origin. “Everyone’s looking to save money by outsourcing,” says Gary Barrett, who heads up Atos Origin’s managed services division. And he says most users that have gone the outsourcing route reckon it’s cut their costs, but that they haven’t yet realised the full potential. Just over half, he says, say it means they can focus on their core business, and that it’s better use of their IT resources. The survey concludes that manufacturers that have outsourced aspects of their IT provision have seen business performance improve by an average of 6% – although Barrett concedes that attributing the numbers is debatable. He does however note that those that have outsourced their help desks – more in the chemical and pharmaceutical manufacturing sectors than elsewhere – say they’ve got 11% average gains. For the future, the survey shows top of the list for IT outsourcing remains web-related applications development, followed by system maintenance, then system design and then system implementation. Looking in a little detail closer to manufacturing applications, the Benchmark survey shows 63% of chemical and pharmaceutical companies have, or would consider, outsourcing back office applications, compared to 49% of food and drink companies and 50% of electrical companies. Food and drink manufacturers are more likely to look for industry-specific expertise (76% said some or high influence on the decision), compared to 59% of chemicals and pharmaceuticals, and 66% of electrical manufacturers. Cost is most important to chemicals and pharmaceuticals companies (88%), compared to 62% in food and drink and 76% in electricals. Cultural fit is most important to food and drink companies (73% cite it as quite, or very important) and least important to electrical companies (45% see it as quite or very important). Electrical companies say they’re more likely to increase factory automation outsourcing in the next three to five years (50%) compared to food and drink (37%) and chemicals and pharmaceuticals (39%), although the latter come from a very high base. The survey covered 207 directors with IT responsibility in 201 manufacturing companies – of which 97 were IT directors and the rest had responsibility for other aspects of their businesses.