A review of IT outsourcing trends in 2005: an Australian study

Abstract

IT outsourcing is a well established business practice but is still challenging for organisations due to the difficulty in managing the complexity of ICT and the relationship between the client organisation and the outsourcing vendor. There has been a lack of large scale studies on IT outsourcing which focused on the Australian context and considered a range of organisations including SMEs. This paper reports on the current state of play of IT outsourcing in Australia for small, medium and large organisations. The findings of the quantitative survey show that IT outsourcing is a relatively well established practice in a number of industry sectors which have been traditionally reliant on IT/ICT. Organisations are quite selective about what IT functions are outsourced and how much of their total IT budget is spent on IT outsourcing. The findings show that majority of organisations are involved in partnership type relationships with their outsourcing vendors and that many of the relationships are well established. Finally, the findings suggest that a partnership type relationship is a strong indicator of the overall success of an IT outsourcing relationship.