IT outsourcing brings SME benefits

UK-based voxclever, a provider of workplace solutions for small and medium enterprises (SME), says small companies can benefit by outsourcing their IT and communications requirements, reports TMCnet.

By outsourcing IT support, SMEs can make large parts of their budgets earmarked for IT infrastructure investment available for other business uses.

Also, outsourcing IT solutions can help companies avoid too much investment into hardware and software that may lose value with time.

Shares in Tata Consultancy Services rose as much as 3.1% to a record high, as brokerages upgraded the stock after the software services exporter posted forecast-beating quarterly results, says Economic Times.

The strong earnings by Tata Consultancy and no. 2 Infosys Technologies in the latest quarter have spurred hopes of a recovery in the sector, but analysts say margins could be under pressure due to a firmer rupee and annual wage hikes.

JP Morgan said Tata Consultancy's strong performance, close on the heels of a similar achievement by Infosys, was a reflection of a sharp uptick in outsourcing demand.

Some 81% of IT departments made cost cuts over the past 12 months, according to a study from the National Computing Centre (NCC), states InfoWorld.

The study on IT infrastructure, conducted by the NCC's Evaluation Centre, showed that 28% of departments made very significant cost cuts, while 32% made moderate cuts and 21% did minor cost cutting. This year's prospects are also bleak, with 31% of IT departments expecting their budgets to decrease in 2010.

Outsourcing has been adopted widely in an attempt to reduce IT costs, with Web site and e-business being the most popular to outsource and some also planning to outsource this in the future. A third of companies interviewed also outsource the server infrastructure and another third network infrastructure, while applications support is outsourced by 32%.