IT services spending down amid weak U.S. economy

by Editor 9/12/2008 4:25:00 PM
Information technology services providers are being pressured by clients to negotiate lower rates during the recession, according to a new report from Forrester.

70 percent of the firms included in the study are negotiating better rates with IT services providers, while 57 percent of them are cutting back on IT contracts. 29 percent are putting their projects to stricter ROI scrutiny.

Almost a half of the 950 technology managers who were polled said that they planned to increase applications outsourcing, while 43 percent are hiring firms offshore.

20 percent of the firms say that they will outsource telecommunications and network management in the course of the next 12 months, while 25 – 31 percent will outsource infrastructure in the same period. A third of the companies are already outsourcing apps development, while 29 percent are outsourcing software maintenance and support.

The report further states that 46 percent of enterprises intend to hire consultants for strategy projects, followed by custom apps development (45 percent) and security assessment (43 percent). 42 percent of firms say that the quality of offshore deliverables is not as high as onshore outsourcing firms.

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