What does the saving of 20% on IT function expenditure imply?

The saving of 20% on IT function expenditure strongly suggests that the outsourced IT function was more efficient in its operations compared to managing those functions in-house. This efficiency can stem from various factors, such as the ability of outsourcing providers to leverage economies of scale, specialized expertise, or more streamlined processes that lead to cost reductions.

This situation indicates that outsourcing is yielding significant financial benefits, resulting in lower expenses without sacrificing the quality of IT services. Efficiency may also mean that the outsourced functions can deliver services faster or with better technology, ultimately translating into savings for the organization.

Other responses could imply various scenarios, but they do not directly correlate with the 20% cost savings demonstrated in the question. The focus on the efficiency of the outsourced function aligns most directly with the observed reduction in expenses, making it a logical conclusion that such savings are indicative of improved operational effectiveness.