Lean times driving managed services uptick

Analyst firm Forrester Research said that almost 20% of IT professionals are purchasing more managed services as a result of the tough economic climate, but rather than cost savings being the key driver, the decision is being motivated by a desire to focus on their core business. In addition to a desire for more flexible payment methods, companies also have a need to keep their technology up-to-date.

It has become somewhat hackneyed, but undoubtedly cost control is vital for businesses, as a way to protect operating margins in the face of an ongoing recession, with guesswork the only tool for predicting when the market will improve. Managed services provide companies with a way to avoid the up-front capex costs associated with new technology deployments, in favour of predictable monthly costs and a reduced maintenance overhead.

Despite times being tough, it is also crucial that cost cutting does not affect an enterprise's ability to function effectively. While reducing investment in IT may provide a positive effect on the numbers in the short term, it will seriously impact the ability to compete against rivals who have remained on top of their technology deployments, and means that once the market picks up, the business will be stuck with out-of-date infrastructure which needs to be updated.

Other findings of the survey, which polled more than 2,300 IT executives and decision-makers in Europe and North America, included the fact that 22% of enterprises and 24% of small-to-medium businesses have already deployed, or are in the process of deploying, unified communication solutions. The main benefits here are cost savings and improved communication flows between employees.

Enterprises are also using a "plethora" of wireless networks, with more than 65% having already implemented, implementing, or upgrading wireless LAN equipment. Intriguingly, 45% indicated having no interest in mobile data solutions -- the reason for this high level of apathy was not revealed.

Desktop voice-over-IP is also seeing growth, with 34% of enterprise respondents stating that they have already implemented or are implementing desktop VoIP, with an additional 14% expanding or upgrading a VoIP deployment. This technology is also gaining ground in SMBs, with 34% of these respondents stating they have already deployed desktop VoIP solution, and 9% upgrading or expanding a current presence.

Tools lacking to measure outsourcing ROI

Computer Business Review noted that European executives lack the tools to measure the return on investment of outsourced business arrangements, despite spending millions on outsourcing each year. This conclusion was based on research conducted by Warwick Business School, in partnership with outsourcing specialist Cognizant.

Of the 250 European CFOs and CIOs surveyed, only 43% have attempted to calculate the financial impact of outsourcing on their bottom line, while 20% apparently "do not know whether they have tried". Of those who have undertaken calculations, "less than one in five...are very confident in their quantification".

Sanjiv Gossain, Vice-President and Managing Director for Cognizant in the UK and Ireland, noted: "Senior executives appear to be making outsourcing decisions based upon short term cost cutting -- which remains crucial -- but outsourcing's impact stretches well beyond the initial labour, skills and cost advantages. The best partnerships can deliver significant operational flexibility and business process improvements, but companies clearly need help in measuring and communicating the long-term value of these relationships."

Stewart Baines
Stewart Baines

I've been writing about technology for nearly 20 years, including editing industry magazines Connect and Communications International. In 2002 I co-founded Futurity Media with Anthony Plewes. My focus in Futurity Media is in emerging technologies, social media and future gazing. As a graduate of philosophy & science, I have studied futurology & foresight to the post-grad level.