InformationWeek

Both companies outsource data-center and IT-infrastructure chores in order to focus on their core businesses. And when it comes to E-business initiatives, both keep strategies and management in-house and farm out chunks of development and programming. They also choose smaller consulting companies with expertise in E-commerce projects over traditional outsourcing giants such as IBM. The reason: Smaller boutiques tend to be quick on their feet in turning around projects and have gained expertise by being the first in the market.

But all that could change in the long run. While IBM Global Services, the leader in the outsourcing and integration arena with revenue of $29 billion, concedes that it might have been slow-footed initially, its executives say that they are stepping up to the plate. So is EDS. Both have set up extensive E-business consulting and design implementations, and both offer applications services as an alternative for customers that do not want the hassle of building E-business infrastructures.

To explore the rapid changes occurring in E-business outsourcing, freelance writer and analyst Saroja Girishankar talked with senior executives at AIG, Honeywell, and IBM Global Systems. The bottom line, Girishankar discovered, is that users have plenty of choices in outsourcing providers and they are taking advantage of that luxury. Still, they need to proceed with caution.