Survey finds SMEs have "increasingly sophisticated approach" on minimising expenditure
News | 29 Oct 2009 :
The ability to focus on core business and cost savings are the primary reasons for IT outsourcing according to a new survey by Irish-owned Hibernia Evros Technology Group. Half (51%) of the companies surveyed were Irish small and medium sized enterprises (SMEs) employing between 1-250 people. The results of the study were revealed at the announcement by HiberniaEvros of a new infrastructure outsourcing service for SMEs called OmniSource.
63% listed ‘focus on core business' in the top two reasons for outsourcing. Cost saving was the second most popular reason, mentioned in their top two choices by 51%. ‘Releasing internal IT staff for more strategic work' was highlighted by almost half (47%).*
"Irish firms have an increasingly sophisticated approach to outsourcing," commented John Kennedy, marketing director, Hibernia Evros Technology Group. "Market perception has been that Irish companies have been reluctant to outsource but the results of this survey suggest otherwise. 71% already outsource some element of their IT. It may be that the economic downturn is encouraging companies to focus more on their core business and explore ways to reduce internal costs."
The most common IT function outsourced is hardware support (72%) followed by web hosting (41%). Network management and security/virus protection (both 38%) are in the top four outsourced IT functions.
The Hibernia Evros survey asked those firms who do not outsource the reason why. The primary reason is that firms have sufficient in-house IT staff which is cited by over a third (39%). A quarter said it was cheaper to manage IT in-house. Fear of loss of control was cited by just 12% of those who do not currently outsource.
41% of the total sample said they had no fears about outsourcing while a third said that they did.
Of those who had fears, the number one barrier was security/confidentiality which was highlighted by 46%. 29% said they were reluctant to rely on an outside supplier while 28% referred to the difficulty in finding the right outsourcing partner.
"At a time when companies are looking to control costs we see increased interest in outsourcing. But there are genuine fears by those who do not currently outsource and these need to be managed by strict Service Level Agreements (SLAs) and perhaps initially outsourcing part of their IT infrastructure," commented John Kennedy of HiberniaEvros.
"The survey suggests that many IT Managers are looking to develop into more strategic business roles than simply keeping the lights on." Over 40% of respondents were at IT Director, CIO or IT Manager level.
OmniSource, the new HiberniaEvros outsourcing infrastructure service geared specifically to the SME market, is aimed at companies with between 25 and 250 employees. HiberniaEvros says that it can boost efficiency and cut IT costs by 20% or more as well as helping to avoid costly downtime and emergency repairs.
107 IT professionals participated in the outsourcing survey which was conducted by Ellwood Market Research on behalf of Hibernia Evros Technology Group. A donation of €1,000 will be made to the National Children's Hospital in Crumlin as a result of the responses.
Hibernia Evros Technology Group, which employs 80 people in its offices in Dublin, Waterford, Cork, Kildare and Limerick, was formed in November 2008 by the merger of Hibernia Technology Group and Evros The Computer Centre.