August 31, 2012 – Cloud computing and as-a-service are emerging as a viable choice over staff offshoring as a way to address the gap in IT skills with enterprise application development and data programs, according to a new market assessment.

In its report, “The State of IT Outsourcing: The Elastic Workforce,” staffing and managed services consultancy Bluewolf raked through responses from more than 200 enterprise IT leaders on their outsourcing plans, which includes a mix of offshoring IT, consultant hiring, and cloud and as-a-service.

Thirty-two percent of those surveyed pegged the outsourcing portion of their overall IT budgets as going up in the next year, and only 9 percent saw it decreasing, according to the survey.

At 46 percent, application development represented the largest function falling under some realm of outsourcing. About half of that mix said that would include cutting or reassigning staff, though a combined 32 percent of that figure was handled by cloud or managed services. Data center operations represented nearly one-quarter of IT outsourcing programs, a figure led by cloud-based or as-a-service options. And 22 percent of those surveyed expected data center operations to increase along these outsourcing choices in the year to come, according to Bluewolf.

Of note in the report was the level of IT contractor hiring, put at an expected increase of 48 percent in the next 12 to 18 months, according to Bluewolf. IT contractors were at or near the top of choices for enterprise projects with application development, application maintenance, Web and mobile development, and IT security.

Rather than economic doom-and-gloom for domestic IT hiring, Bluewolf researcher and co-founder Michael Kirven forecasts the hiring of experts as a “net positive.” Kirven sees the responses as an indication of a flexible sourcing strategy that includes moving some hiring offshore, but, increasingly, cloud and SaaS options as the talent base grows and more enterprises take on deployment programs.

“As technology becomes increasingly integrated into even the most basic business functions, the need for ‘soft skills’ becomes much higher. Companies need experts who not only have mastered the specific technology, but also understand how it maps to a specific department’s needs, and can communicate readily with people operating within that department,” Kirven says. “It’s not just about saving a buck anymore – it’s about finding the right people at the right time. In many instances, hurdles associated with offshoring, such as language, culture, and time-zone barriers, give domestic talent the advantage.”