According to a new IDC report, the current economic climate is driving companies that have not previously considered outsourcing to reconsider the benefits of offshoring. Driven by the need to reduce costs and optimise headcounts, IDC expects IT outsourcing to gain momentum in the Australian market.

The report titled, Australia Outsourcing Services Market Forecast and Analysis 2009-2013, reveals that the total outsourcing market stood at A$6.4Bn in 2008 and is predicted to grow at a 5 year compound annual growth rate (CAGR) of 4% over the forecast period 2009-2013.

IDC's report reveals that even organisations that have previously shied away from offshore outsourcing are actively evaluating this delivery model to reduce back office costs and gain access to skills while optimising their resources to adapt to the slowdown in the economy.

"The current economic situation is driving more organisations to think seriously about outsourcing as a way to keep costs down, in particular we expect to see a greater interest in managed services. In a time like this, to have differentiated outsourcing strategies and options that address the diverse needs of a cost conscious market, will benefit the market,' said Marina Beale, Senior Market Analyst, IT Services at IDC.

“Overall any cost cutting solution will be high on the agenda for most company CIOs. For example, virtualisation, Cloud computing/SaaS are examples of solutions that offer potential savings related to both capital expenditure as well as operational expenditure. Companies, large and small can potentially benefit from these technologies/delivery models, which would level out the competitive playing field,” Beale added.