This year will probably go down as the roughest in memory for vendors of outsourced IT services. Despite waning demand, companies in industries hard-pressed by market conditions continue to partner with IT services providers, pushing forward key IT initiatives.

Even as the business services, manufacturing, and financial-services industries grapple with weak business outlooks, each claims companies committed to outsourcing, according to InformationWeek Research's Analyzing The Outsourcers study of more than 700 business-technology professionals. The study defined outsourcing as an ongoing contractual relationship rather than as short-term IT development projects.

Companies in these sectors most commonly seek outside expertise to bolster their Web-site operations. Outsourcers also play a significant role in building out network operations and shoring up internal security among manufacturing sites. Companies in the business-services sector are more inclined than others to rely on IT services providers for data-center management. Financial services are prone to outsource a range of different IT practices, but they're on equal footing with their industry counterparts to implement business apps.

About four in five business-services and financial-services sites say the engagements are either meeting or exceeding their expectations. Nearly 70% of manufacturing companies concur, raising the strongest voice of dissatisfaction, with one in four sites reporting disappointment in their outsourcer's performance.

What industry pressures are shaping your outsourcing relationships and which vendor will most affect your company's operations next year? Let us know.

Rusty Weston
Editor, Research
weston@cmp.com with Helen D'Antoni

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Good Understanding
Has your company's outsourcing experience matched expectations?

Industries on the whole have a good understanding about the benefits their services providers are supplying, as most have had ample time to prove themselves. Only 6% or fewer of business-services, manufacturing, and financial-services sites say they're new to outsourcing and that it's too early to tell whether company expectations will be met.

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Making Room
Has your company experienced unexpected add-on costs after your outsourcing contract began?

If there's one piece of sage advice from customers of IT services providers, it's that outsourcing budgets require a slush fund. Long after contracts have been signed and sealed over steaks and merlot, industry executives are finding themselves processing unexpected service charges. Two in five financial-services and manufacturing sites have encountered unexpected add-on costs after the start of their outsourcing engagements. Executives at business-services companies have been more fortunate, with only one in five receiving surprise bills.

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Deal Maker
How important are service-level agreements in your company's vendor-selection process?

Even when outsourcing makes business and budget sense, managers aren't throwing their precious IT dollars at outsourcers, at least not without some guarantees of success. Service assurances loom large among companies regardless of industry, as evidenced by the importance companies place on performance agreements. Ninety-six percent of manufacturing sites report service-level agreements are highly important to their process of selecting an outsourcing vendor. That percentage is similar to that of companies in financial services, 95%, and slightly more than the 88% in business services.

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Some Assurance
Has your company invoked its outsourcing service-level agreement one or more times?

It's a good thing that executives in the business-services, manufacturing, and financial-services sectors are taking IT service-level agreements seriously. Companies in all three industries are finding that these agreements have come in handy, helping to rectify circumstances that go amiss. In fact, 45% of business-services and financial-services sites polled have found it necessary to invoke their agreements. Manufacturing companies haven't gone unscathed, either, with 33% of sites saying they've used their service-level agreements one or more times.