Outsourcing grows in popularity

Worldwide spending on information systems (IS) outsourcing services reached more than $68 billion in 2002. This figure is expected to surpass $99 billion by 2007 as companies attempt to cut costs and tackle staff shortages.

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By  Matthew Southwell Published  April 6, 2003

Worldwide spending on information systems (IS) outsourcing services reached more than $68 billion in 2002, according to IDC. Furthermore, this figure is expected to surpass $99 billion by 2007 as an increasing number of companies outsource their IT requirements to stabilise costs and overcome staff shortages.

"As companies worldwide deal with dynamic technological and economic changes, outsourcing is increasingly viewed as an attractive operational alternative and a source of competitive advantage,” says Cynthia Doyle, program manager for IT Outsourcing and Utility Services research at IDC.

“Companies around the world are turning to outsourcing to help reduce or stabilise costs, access advanced technology, compensate for a lack of skilled IT workers, improve business efficiency, meet earning projections, tie technology to business value, and remain competitive in the global marketplace," she adds.

IDC’s research shows that the US currently represents the strongest outsourcing market in the world in 2002, accounting for about 45% of all IS outsourcing spending. Countries in Asia/Pacific spent the least on IS outsourcing services, but the analyst house predicts that they will experience the highest spending growth through 2007, with a compound annual growth rate (CAGR) of 9.2%.

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