City adopts ‘once bitten, twice shy’ approach to outsourcing - financial sector has learnt the lessons of the last outsourcing boom, says Comunica

Companies in the financial sector are taking a much more cautious approach to outsourcing, according to Comunica.

Research reveals 70% of businesses in the City are turning away from large outsourcing suppliers due to spiralling costs and project over-runs. Increasingly, financial services companies are turning to smaller, more specialised suppliers to manage the various parts of their IT infrastructure.
The research was carried out across a series of feedback sessions conducted across Comunica’s customer base of over 200 companies.

Previous problems with escalating budget requirements, poor quality service and ever expanding timescales were the most commonly cited reasons for the change. Over two-thirds of the companies surveyed cited at least one of these as the key driver behind the move towards a different approach.

"Medium sized companies are the ones leading the movement away from big outsourcing contracts," said Frank Philbin, associate director, implementation at Comunica. "They feel that they have been short-changed in the past because the bigger suppliers had more important customers to deal with. All too often they were bottom of the list of priorities."

"However, the realisation that in many instances you can get a better, more dedicated service from smaller suppliers is spreading up the food chain and some of the biggest firms in the City are now looking to follow suit," he continued. "Also, larger outsourcers are beginning to learn from the smaller companies and to work alongside them rather than competing with them. This way customers get the security of working with a large company combined with the service provided by the smaller ones."

For further press information, please contact
Annette Richardson or Toni Castle
LEWIS, the IT PR agency.
Tel: +44 (0) 20 7802 2626

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