Outsourcing - The Future Of Outsourcing

THE FUTURE OF OUTSOURCING

According to a March 2001 survey conducted by Merril Lynch, chief information officers in the United States and Europe were planning to scale back IT spending on outsourcing, among other areas of IT. However, despite this indication of possible cutbacks, the market for outsourcing was substantial. IT Outsourcing Market Forecast, a study from market research firm Input, projected that the information technology outsourcing market would grow 22 percent annually between 1998 and 2003, reaching $110 billion.

However, as with any kind of business practice, the use of outsourcing as an approach will vary depending on the service involved. For example, the future of outsourcing looked especially positive in the area of customer relationship management (CRM)—database systems companies use to maintain details about their customers, including their contact information and preferences for products and services. A July 2001 Harte-Hanks survey found more than 80 percent of companies in North American were outsourcing the task of building and maintaining their CRM systems. On the other hand, Frontline Solutions cited results from an Aberdeen Group survey that indicated outsourcing business-to-business software applications was not as promising. Although more and more software applications were available from ASPs, Aberdeen's survey of the Oracle Applications Users Group found that less than five percent were using ASPs, and 82 percent were not planning a strategy involving them.