Press releases
Public sector leads the way in managed services
- Telewest Business/EIU survey finds Need for lower costs and
improved efficiencies drive move towards outsourcing
02 February, 2005. Public sector organisations are spending more
and more of their ICT budget on managed services instead of
internal projects, according to the annual Telewest Business ICT
spend survey, conducted by the Economist Intelligence Unit. This
pattern is set to continue, as by 2006, 21 per cent of public
sector respondents say they will be spending 10-25 per cent of
their ICT budget on managed services, and 19 per cent say
they will be spending upwards of 50 per cent. This compares with
just 10 per cent and 11 per cent respectively in the private
sector.
The trend towards managed services is due to both a lack of
internal resource and a desire to lower costs and maximise
efficiencies, with 88 per cent of respondents citing this as their
organisation’s strategic priority in 2005. Christopher Small,
Director of Public Sector, Telewest Business said: “Increased
demands on resource for the public sector means that they are
increasingly turning to managed services. Organisations are looking
to take advantage of areas of ICT where they may not have the
skills in-house to implement by looking to outside service
providers. As the pressure to find skilled staff grows, this trend
will continue in the public sector.” The public sector compared
favourably with commercial companies when it came to integrating
senior ICT staff with the rest of the senior management team.
Three-quarters of public sector organisations surveyed said that
the CIO/IT director was part of the senior management team – just
63 per cent said the same from the private sector.
This does not prevent disagreements over ICT, however. Senior
management in the public sector fared badly when it came to ICT
knowledge – a third of those surveyed said that their senior
management team were not technically savvy. Perhaps because of
this, more public sector organisations would appear to want to work
in isolation, with 45 per cent of those
surveyed saying that the IT function was reluctant to adopt tighter
governance of technology projects. This compared with one-third in
the private sector.
“Business and technology executives in the public sector are
having as much trouble agreeing on how ICT projects are run as the
private sector,” Small continued. “But it does seem to work - more
than three-quarters of those surveyed said that their organisation
was successful at meeting the ICT targets it sets itself.”
Other key public sector findings include:
- Customer servicing (29 per cent) and finance and accounting (24
per cent) were the two areas where ICT had the most impact in
2004
- Software applications (33 per cent), storage (33 per cent) and
call centre solutions (31 per cent) were the key areas for ICT
investment over the next two years
- Actual ICT investments were to remain static though – 38 per
cent said levels would stay at 2004 levels, with 24 percent and 17
per cent saying a slight increase and decrease respectively
- 57% said that a close working relationship between the business
and IT management teams is key to a successful ICT
project