IT leaders are being held back from capitalising on new technologies due to inflexible IT outsourcing (ITO) contracts, according to a new study from independent sourcing advisor, Alsbridge plc.
Two fifths (38 per cent) of IT leaders say they feel “stuck in the past” as new technologies emerge and existing ITO contracts prevent them from taking advantage.
More than a third (35 per cent) also claim their existing delivery models are a barrier to new technology adoption.
John Sheridan, Director – Head of ITO at Alsbridge, comments: “Technology can deliver huge competitive advantage to businesses, but only if ITO contracts are flexible enough to quickly integrate new ideas.
“Inevitably, with the technology world developing apace, long term contracts and inflexible agreements are leaving businesses behind.”
The study uncovers the views of 250 senior IT decision makers from Europe’s most mature ITO markets: the UK, Switzerland, Holland and the Nordics.
Driver for change
Technological change is the main driver for IT leaders’ desire to renegotiate or retender their existing ITO contracts.
More than half (54 per cent) plan to update an existing arrangement due to changing technology needs.
Almost half (46 per cent) believe the ability to take advantage of new technologies is one of the most important factors when choosing an ITO provider.
However, a third (34 per cent) believe that suppliers will not promote new technologies that could reduce their bottom lines, such as cloud computing.
Sheridan adds: “The desire for greater flexibility in today’s economic environment is understandable, but so is the supplier’s need for clear definition and confidence around return on investment. Clients and outsourcers must work together to agree a deal that works for both parties and doesn’t compromise either one’s ability to deliver.”
