More users opt for outsourcing

UK companies are still passing more of their IT work to services suppliers. But users should wait a few months before outsourcing.

More than half of the UK's total IT budget is being spent on outsourcing contracts, according to Richard Holway, author of the annual Holway Report.

The report, which monitors the performance of the British software and services industry, will be published next month and reveals a healthy growth in the sector.

The UK market for software and services expanded by 24% last year, and the top 10 suppliers recorded an average growth rate of 26%.

'The use of external operators is much more efficient. The mistakes are in setting too high expectations, and giving control of your IT strategy to an external company. That's something you must keep in-house,' said Holway. Services buyers should wait until later this year, when year 2000 work will be complete, and outsourcers will be hungrier for work, he added.