Gartner Says Outsourcing Will Continue to Be the Main Driver for Growth in IT Services
Analysts Discuss The Future of Outsourcing During Gartner Outsourcing Summit 2004
LAS VEGAS, NV. May 17, 2004 — Outsourcing continues to be the main source of growth in IT services, and has become a mainstream business practice for companies of all sizes. According to Gartner, Inc., in 2004, outsourcing will account for 53 percent of the total worldwide IT services market, and will make up 56 percent of the market by 2007.
Gartner presented these findings today during Gartner Outsourcing Summit 2004, which is taking place here, through May 19.
"Outsourcing is becoming the dominant way that enterprises buy IT services," said Allie Young, research vice president for Gartner's sourcing group. "The outsourcing industry continues to evolve, but the imperatives for enterprises that are considering outsourcing are constant - focus on core business, access to critical technical expertise and optimized IT operations."
There is heightened attention on business processes, as business process outsourcing (BPO) becomes the new growth area for adding greater value to outsourcing. Highly complex, multiyear IT projects are still found in megadeals, but for the average enterprise, the rise of shorter-term "selective" outsourcing will give way to a "best of breed" approach as business units influence outsourcing choices to a greater degree. The need for best in class IT outsourcing (ITO) and BPO for business impact is driving this shift.
The IT services market is also in the middle of unprecedented change as companies rush to employ a global delivery model (GDM), primarily in an attempt to reduce costs. Many enterprises consider "offshore" as synonymous with cost savings. The industry is transitioning to "global sourcing", which involves a broader, more varied value proposition, a more fundamental change in how enterprises buy and source IT services, and how outsourcers create and deliver IT-enabled business services.
"A global delivery model means that enterprises can use IT resources from anywhere in the world to ensure that they have the right skills at the right price at the right time, with managed risk," Young said. "Only the largest global corporations will rely on captive centers to bring a global labor pool to their IS organizations; most enterprises will do so via outsourcing, tapping into the GDM of an outsourcer."
Gartner Outsourcing Summit 2004 is the most comprehensive conference ever organized for buyers and users of outsourcing services. The emphasis is on sharing strategies that ensure tangible, sustainable results in a business environment where half of all outsourcing arrangements do not deliver on their expected benefit. Additional information about the conference is available at www.gartner.com/us/itsourcing.
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.
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