Report: Outsourcing Big In IT And Communications

Market-research firm KnowledgeStorm also says bigger companies are much more likely to use outsourcing than smaller ones.

InformationWeek Staff, Contributor

April 7, 2004

1 Min Read

Offshore outsourcers have enough satisfied IT customers to keep the outsourcing phenomenon growing, according to a new report examining the offshoring and exporting of U.S. jobs.

KnowledgeStorm, which operates an IT-business search engine, looked at U.S. businesses across the board and found that large companies use offshore services at a rate 2.4 times more frequently than small companies--and are more likely to continue to outsource operations in the future.

"There's a strong positive correlation between satisfaction and increasing likelihood to use offshore services," KnowledgeStorm said in a statement. "Expect use of offshore services to continue to grow because of this base of satisfied and eager customers." The market-research firm also found that communications firms and IT companies were the top users of offshore services, with nearly 35% of those industries utilizing outsourcing.

The firm's data also revealed that IT managers and other executives are already polarized on the issue. KnowledgeStorm said 42% of the respondents in its study said they are less open to offshoring, while nearly 58% of current outsourcing practitioners are satisfied with their experience.

In reviewing a cross section of U.S. businesses, KnowledgeStorm said a total of nearly 24% of the companies surveyed use offshore services, with some industries--unnamed in the report--utilizing offshore services at the low rate of nine percent.

In the category of "Public Administration," the report's authors found officials "increasingly disinclined to use offshore services"--probably because of the political outcry over the loss of jobs that could result.

The report, "Corporate IT Spending and Offshore Services," surveyed more than 2,000 enterprise-software users. Also contributing to the report was the AlignIT Group, an IT consulting firm.

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