Nearly three-quarters of businesses to increase outsourcing

Nearly three-quarters of businesses to increase outsourcing

Nearly 75 per cent of businesses around the world will increase their investment in outsourcing services, including those in IT and technology.

That is the latest finding of research firm KPMG, which claimed that 72 per cent of larger companies planned to increase their outsourcing budget, while another 61 per cent  said they would increasingly use global shared services for IT and business processes over the next two years.

Its report, The State of Services & Outsourcing in 2014: Things Will Never be the Same, carried out with HfS Research, found that, on average, enterprises plan to increase their offshoring activities by between 20 and 30 per cent over the next 12 months.

The report added that integrated global services models that incorporate internal shared services, with outsourcing the core focus for most enterprise.

Experts claim that the rise in demand for outsourced services will result in greater competition within the market, with many businesses demanding more from their services.

Dave Brown, KPMG's head of global lead, shared services and outsourcing advisory, said: “Providers need to prove they can do more than basic operations, otherwise outsourcing runs the risk of becoming a staff augmentation model for flexing operations as opposed to a strategic partnership between provider and buyer that can add more skill, technology, and analytical capability for clients.”

The findings of the report come despite analysis form CIO.com, which in January claimed that around 20 to 30 per cent of IT services would be taken in-house.

Stan Lepeak, global research director for KPMG Advisory said at the time: "Buyers are more comfortable to create retained organisations that not only govern the services, but start to move more into operational control of the services."

However, the latest findings suggest that many companies still have faith in the services being offered by many third-party providers, especially given the rise of platforms of cloud computing.