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Outsourcing cos may see more pressure from clients

Source: PTI
June 22, 2010 19:33 IST
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Outsourcing services providers may come under increased pressure from their clients, with chief Information Officers (CIOs) at firms globally planning to squeeze more value out of their outsourcing arrangements, a study by global consultancy KPMG International said.

According to KPMG's latest report -- "From Cost to Value" -- CIOs surveyed worldwide have accorded top priority to getting more value out of their outsourcing contracts.

Over two-thirds of the 450 CIOs surveyed globally indicated that they want to get more out of their outsourcing contracts in terms of the price to quality ratio.

An even higher number of respondents expect to bring increased pressure to bear on their outsourcing partners, the survey noted.

"Understandably, CIOs are pursuing value by reviewing outsourcing arrangements and retaining a firm focus on cost optimisation, for example," KPMG's UK advisory partner, Bryan Cruickshank, said.

This also demonstrates the CIOs intent to enhance their role as executives focusing on in-house operations to involve making decisions on external activities, he said.

"These days, CIOs also expect IT to contribute directly to realising the business strategy and to have a central role in management," Cruickshank added.

The survey revealed that 81 per cent of the respondents felt that getting value from IT must be their top priority. Cost optimisation was second on the priority list of the CIOs (58 per cent of respondents), ahead of portfolio management (51 per cent), although it could be argued that both of these can be seen as sub-sets of the overall theme of extracting value from IT investments, the survey added.

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