Gartner Says More Than 90 Percent of Enterprises Will Be Inadequately Prepared to Manage Multiple Service Providers by 2005
New Gartner Outsourcing Executive Report Provides Key Guidance, Insights and Recommendations for Successful Outsourcing Strategies
STAMFORD, CONN., September 2, 2003 — By 2005, 70 percent of enterprises will use more than three sources for service delivery in key areas; however, fewer than 10 percent will have the appropriate processes and governance structures to effectively manage multiple external service providers (ESPs) that contribute to common enterprise objectives, according to Gartner, Inc. (NYSE: IT and ITB).
"As the number of sources required to fulfill enterprise IT and business demands increases, Gartner has not seen a comparable effort in most enterprises to create organizational structures, apply the necessary management resources and implement processes to manage this new environment effectively," said Christopher Ambrose, research director for Gartner. "As a result, the overwhelming majority of enterprises using multiple service providers repeatedly experience a collision between the interests of these sources, which diminishes the value of the service they provide to the enterprise."
Gartner's new Executive Report, "Successful IT Outsourcing: Strategies, Tactics and Management Approaches for Effective Strategic Sourcing," provides comprehensive guidance on the implementation plans and best practices that enterprises need to develop successful outsourcing strategies. This 274-page report features 19 fact- and advice-filled chapters, an appendix on Gartner's IT Services Hype Cycle, a glossary of terms and 127 figures, including three "Magic Quadrant" vendor evaluations.
As enterprises outsource more strategically, they are using a wider mix of ESPs, in addition to internal service providers. "The landscape is complicated, and competing interests among external and internal sources often create an environment that encourages minimum effort over best effort," Ambrose said. "Many enterprises have not focused on creating the agile, responsive, flexible organization necessary to effectively manage the multisourced environment, leaving them vulnerable to low return on service value."
Gartner analysts said that enterprises should examine and quantify the value lost due to poor multisourced-environment management practices, identify where gaps exist in their own management, gain executive commitment to change, and develop a structure to manage relationships — not just service delivery.
Additional information is available in Gartner's new Executive Report on outsourcing. Important topics addressed in this Executive Report include:
Developing an effective sourcing strategy, and selecting the right relationship model to achieve outsourcing goals
Building the outsourcing business case, and evaluating risk in outsourcing engagements
Tackling the human-capital and organizational issues posed by outsourcing, and managing workforce-related risks
Conducting a thorough and effective ESP evaluation and selection processes, and applying best practices in managing ESPs through outsourcing contracts and service-level agreements
Exploiting business process outsourcing (BPO) market opportunities, and effectively measuring BPO performance
Identifying solutions and providers for IT utility services, network managed services, application outsourcing and offshore IT services
The Gartner outsourcing report (ISBN 0-9741571-1-2) is priced at $1,295. The 274-page report is an offering from the new Gartner Executive Report Library, a five-set series from Gartner Press that provides buyers with comprehensive printed reports on topics of critical interest to today?s business and IT executives.
For information about purchasing the report or others in the Executive Report Library, visit www.gartner.com/executivereports. Other Gartner Executive Reports available for purchase cover the following topics: customer relationship management; Web services and middleware; enterprise security; and asset management.
More information on the industry is available in Gartner's IT Sourcing and Procurement Directors Membership Program. Gartner has launched a program that brings together expertise from across Gartner focusing on outsourcing, sourcing and procurement in a convenient, integrated package tailored specifically to the business and technology issues facing sourcing and procurement executives - whether focused on strategy, evaluation and selection, contract negotiation, or management.
The Gartner IT Sourcing and Procurement Directors Membership Program will help executives increase the visibility, reputation and success of IT sourcing or procurement initiatives. It will also enable executives to respond more efficiently and effectively to the multitude of demands typical of the current time-, budget- and resource-constrained environment. For more information, visit www.gartner.com/mp/ITSP, or call Gartner at 203-316-1277.
About Gartner:
Gartner, Inc. is the leading provider of
research and analysis on the global information technology industry. Gartner serves more
than 10,000 clients, including chief information officers and other senior IT executives
in corporations and government agencies, as well as technology companies and the
investment community. The Company focuses on delivering objective, in-depth analysis
and actionable advice to enable clients to make more informed business and technology
decisions. The Company's businesses consist of Gartner Intelligence, research and
events for IT professionals; Gartner Executive Programs, membership programs and peer
networking services; and Gartner Consulting, customized engagements with a specific
emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in
Stamford, Connecticut, and has 3,700 associates, including more than 1,000 research
analysts and consultants, in more than 75 locations worldwide. For more information,
visit www.gartner.com.
