The global survey of 758 CIO-level executives' outsourcing and budget priorities for 2005, carried out by the Economist Intelligence Unit and sponsored by IT vendor Mercury, found outsourcing will remain a key strategic priority for IT executives over the next 12 months.
On a country level, 44 per cent of the 50 UK CIOs questioned said reducing IT costs is still the main benefit anticipated from outsourcing, while 60 per cent said cost-cutting is the key driver for initiating outsourcing deals in the first place.
The biggest obstacles to successful outsourcing are the risk of degradation in service quality and a lack of visibility of the operations handed over to a third party, cited by 62 per cent of the UK respondents. Over a third (38 per cent) also said public opposition to the offshoring of IT jobs is a potential obstacle.
David Harrison, UK MD for Mercury, said: "Clearly we cannot get away from the cost issue."
Compliance regulations will also remain a headache for IT departments, with respondents saying International Accounting Standards, data privacy laws and anti-money laundering legislation will all have an impact on IT operations in the next three years.
In terms of IT investment priorities the climate of fear appears to still hold a tight grip over IT executives, with security the number one priority for 2005.
