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Spending on IT outsourcing reached $56 billion in 2000
and is expected to top $100 billion by 2005. (Source: IDC
Research “Worldwide IT Services Industry Forecast and
Analysis, 2000-2005”)
According to the 2000 Outsourcing Index, the IT outsourcing
industry accounts for 28% of all outsourcing. Outsourcing
is currently at a 15% growth rate, compared to the U.S.’s
3.5% growth rate, of which 25% of its growth is in outsourcing.
According to Dr. James Brian Quinn, Professor of Management
at Dartmouth College:Sophisticated outsourcing supported by new electronic communications,
modeling and monitoring techniques enables companies to reduce
innovation cycle times and costs by 60% to 90% and decrease
investments and risks by equal amounts.
(Source: Synopsis from “Strategic Outsourcing: Leveraging
Knowledge Capabilities,” MIT Sloan Management Review,
1999)
Top three reasons why companies outsource:
1. Reduce and control operational costs
2. Improve company focus
3. Gain access to world-class capabilities
Recognizing not only the need to guard against such attacks
but also their lack of expertise to provide that protection,
businesses have begun to outsource network security. One
sign of this growing phenomenon is that security and network
management firms have been forming specific professional
units targeted to providing such services. (Source: “Network
Security in Outsourcing,” The Outsourcing Institute
by Richard Raysman)
As companies continue to grow, the gathering and management
of information will become more complex and costly for in-house
operators, leading to the increased need to outsource storage
and security. (Source: 2000 Outsourcing Index by The Outsourcing
Institute and Dun & Bradstreet)
In 2000, outsourcing in smaller companies ($10 million -
$15 million in sales) increased 25% from 1999. (Source: 2000
Outsourcing Index by The Outsourcing Institute and Dun &
Bradstreet)
Today, it is estimated that mid-size companies that have
transitioned into outsourcing their non-core business functions
are saving between 30% and 80% of their budgets, depending
on the size and the complexity of the agreement. (Source:
CRO Issues, Midsize Companies Discover Outsourcing)
With the constant changes and advances in business and
technology, the IT Outsourcing Index suggests that the scope
of IT outsourcing will continue to expand, in areas such
as applications development and maintenance, consulting
and reengineering, imaging and OCR services, training, and
transitional outsourcing. (Source: 2000 Outsourcing Index
by The Outsourcing Institute and Dun & Bradstreet)
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