PracticeConsultingOutlook for IT outsourcing gets worse

Outlook for IT outsourcing gets worse

Analyst firm IDC has reported that spending on consulting, systems integration and outsourcing is not meeting expectations, and this has caused it to downgrade its market growth predictions.

Link: IT consultants face tough year ahead

‘The 2002 discrepancy is primarily the result of two market assumptions built into our forecast that did not hold true,’ said Ned May, programme manager at IDC’s Worldwide Services research group.

‘First, IDC expected enterprise spending in the first half of 2002 to be stable,’ he said. ‘However, spending on many IT services actually declined during this period. Second, the anticipated pick-up in demand by the middle of 2002 is now not expected until the last quarter of 2002, and a full recovery is not expected until spring 2003.’

IDC said it had originally predicted a 10.6% growth rate for IT services, with spending in the first half of this year expected to remain stable.

But as spending on IT services actually declined in the first six months of 2002, IDC reduced this prediction to 6.7%, a 3.9% reduction in growth for the year.

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