Strategic Outsourcing: Testing the Outsourcing Waters and Staying Afloat Before Gertrude Ederle began her historic swim off of Cape Griz-Nez, France, she underwent extensive training for endurance and technique—even though she was already an accomplished record-breaking swimmer with Olympic medals to her name. Outsourcing IT may not garner the same attention as being the first woman to swim the English Channel, but it is no less important to gather as much experience and knowledge as possible on a small scale before diving in for the big swim.
The trend toward IT outsourcing is increasing dramatically. According to a report by Foote Partners, as much as 45% of North American IT work will be outsourced by 2005. And there are good reasons behind this trend. Bruce Caldwell, principal Gartner analyst believes companies can generate 20-30% savings through outsourcing. This substantial savings potential isn't easily overlooked, yet it isn't the number one reason companies are choosing to outsource right now. In a recent survey by The Outsourcing Institute, the primary reason behind outsourcing is to improve company focus. Other motives include freeing up internal resources, accessing top-notch capabilities, and accelerating time to market. The survey also indicated that 55% of firms who outsource do so within IT—more than any other area.
As more companies begin outsourcing some or all of their IT function, it becomes difficult to ignore the competitive pressure. With competitors achieving their IT needs at 20-30% less cost, and getting ahead in th Details...
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