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9/7/2006
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Consulting & Business Services: Service-Oriented Architecture Helps Service Providers Meet Customer Demand

This industry is the third-biggest spender on technology in the InformationWeek 500.

Business services providers are spending a greater percentage of their revenue on business technology than most other vertical industries. That shouldn't be surprising: Service providers are buying technology not just to run their own businesses but to run parts of their customers' businesses. They spent an average of 3.9% of revenue on IT, according to our survey, lagging behind only the banking and financial services and telecom sectors.

Businesses and governments, particularly the federal government, are looking to hand more noncore back-office functions such as payroll processing and IT help to third parties, and they want the work done off-premises. They're not just looking to reduce costs or ease staffing burdens. They want process innovation that boosts the bottom line.

As a result, a majority of service providers, 70% by our count, are investing in service-oriented architecture technology to deliver that kind of innovation in the most efficient way possible. SOA can be used to seamlessly link functions like sales, sourcing, and manufacturing to create dynamic, interlinked processes within a company or through a supply chain. And that's without the need for multimillion-dollar application integration projects.

Overall, it's a good time to be in business services. Growth in IT services employment alone represented 10.4% of all new U.S. jobs in July. New technologies are making the work more profitable than ever.

Automatic Data Processing, No. 2 on the InformationWeek 500, was the top-ranked company in this industry.

Budget Breakdown

Tech Innovation

Inside Consulting & Business Services
3.9% of Industry's Annual Revenue Devoted to IT
31% of IT Budget Devoted to New Projects
66% of Companies Expecting 2006 IT Spending to Exceed 2005


Business Change
69% Creating New Products/Services for Customers in 2006
31% with Global Supply Chain
43% Deploying Business Intelligence Tools to Raise Productivity



Return to the 2006 InformationWeek 500 homepage

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