Companies Spending More on IT Services, But 2013 Still A Challenge

The University of Pennsylvania says that the enterprise is spending more on outsourced services, and has the numbers to back it up.

A recent article on the Warton business school journal cites a study from Offshore Insights that claims 43 percent of clients plan to increase their spending by as much as five percent in the coming year. The Pune, India-based research firm found that another 14 percent of companies will spend between 5 to 10 percent more in 2013, and only 12 percent expect their budgets to drop. The remaining 27 percent don’t foresee any change “in the next 12 months.”

According to Sudin Apte, CEO and research director of Offshore Insights, the survey indicates that while 49% of the firms continue to see the coming year as being challenging, 41% are optimistic regarding their business outlook. (The rest say that it is too soon to take a stand.) Apte, who was earlier with Forrester Research, notes: “A couple of years ago, we saw that the majority of clients were not taking decisions and were even cancelling projects. Decisions that were being delayed will now be taken in the coming year, but budget increases are going to trail sentiments.”

Apte says that while budgets are growing, client attitude is changing.  Now that many organizations are seeking to leverage their technology infrastructure to gain a business edge, and they demand “far more than ever in the past” in terms of service quality and consulting expertise.

The analyst says that Indian firms are struggling to compete with the client-centric approach of on-site providers such as IBM and Accenture, but some are looking to improve. Infosys announced plans to move its listing from American Depositary Shares to tap into the New York Stock Exchange Euronext service to increase brand awareness in Europe, while its peers are buying up companies in the U.S and grow their marketing budgets.