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.
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.