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Outsourcing Accounts for 26% of IT Organizational Functions and Processes


June 8, 2011 - Framingham, MA

IDG Enterprise -- the media company comprising CFOworld, CIO, CIO Executive Council, Computerworld, CSO, DEMO, InfoWorld, ITworld and Network World -- releases the results from the 2011 IT Outsourcing Survey, examining outsourcing use, strategy, purchase decision process, future planning and geographies that receive the majority of outsourced projects.

The study completed by more than 1,175 IT and security respondents, from a range of industries, shows that organizations currently outsource one-quarter (26%) of their functions or processes and one-third (36%) expect that percent to increase in the next 12 months. The top drivers for outsourcing are accessing skills not available in-house (52%), cost reduction (50%) and managing variable staffing needs (44%). Respondents indicated that the United States is the top country used for outsourcing services.

"This survey highlights the fact that IT stakeholders lead the decision-making process for outsourcing services," said Bob Melk, SVP/group publisher, IDG Enterprise. "It also shows that while poor service tops the list of barriers to entry -- even over security concerns -- IT recognizes that they need to improve their service practices and measurement in order to improve results."

Key findings include:

  • Respondents are outsourcing 26% of IT functions and processes. Web hosting (46%), application development (41%) and application maintenance (39%) are the top IT functions and processes being outsourced. Printing (29%), e-commerce (23%) and legal (22%) are the top business functions and processes being outsourced.
  • CIOs (79%) and CEOs (78%) lead the outsourcing decision-making process.
  • The top drivers for outsourcing are not reaching their full potential as 44% indicate a measurable positive impact in accessing skills not available in-house, 34% in cost reduction and 36% in managing variable staffing needs.
  • Beyond the benefits of outsourcing there are also concerns with the risks associated such as poor service quality (38%), data security/IP protection (33%) and the loss of internal knowledge (30%).
  • Top countries that respondents are currently outsourcing services from are the United States (39%), India (30%), Canada (8%), China (8%) and the United Kingdom (5%).

"In 2011, outsourcing budgets are scheduled to reach an average of $76 million, and those companies that are experiencing success with outsourcing will increase their use. This provides a variety of opportunities for vendors to become a strategic partner," said Michael Friedenberg, president and CEO, IDG Enterprise. "The challenge is in selecting the right partner to provide the most value and potential competitive advantage. As demands of the organization shift from cost optimization to growth, outsourcing partners now need to transform their solutions to add deeper expertise around business process, speed to market, and customer engagement."

To receive the complete study results contact Bob Melk at bmelk@idgenterprise.com.

About IDG Enterprise
IDG Enterprise, an International Data Group (IDG) company, brings together unique editorial brands (CFOworld, CIO, CIO Executive Council, Computerworld, CSO, DEMO, InfoWorld, ITworld and Network World) to serve the information needs of our technology and security-focused audiences. As a digital-centric media company we serve our reader and advertiser audiences with award-winning content and community, driving conversation and conversion, across our entire portfolio of awarding-winning, websites, events, magazines, products and services. In addition, the CIO Executive Council, a peer advisory service, brings together the nation's top CIOs, as well as provides community and leadership development tools for their staffs.

Company information is available at www.idgenterprise.com.

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Contact:
Lynn Holmlund
Marketing & PR Manager
IDG Enterprise
Email Contact
Office: 508.935.4526
Mobile: 508.254.8336

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