IDG Enterprise Outsourcing & Service Providers Survey Results

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1 IDG Enterprise Outsourcing & Service Providers Survey Results May 2011

2 Purpose & Methodology This research was conducted to gain a better understanding of outsourcing strategies and investment plans taking now and in the future. Survey was conducted across IDG Enterprise brands (CIO, Computerworld, CSO, InfoWorld, ITworld and Network World). Survey fielded from March 14 28, All survey respondents are involved in at least one of the following steps in the outsourcing purchase process: evaluation, recommending vendors, determining requirements, determining the business need, approval/authorization, or selling internally. Margin of error: +/- 2. 2

3 Decision-Making Process Primarily Led by IT Stakeholders CIO 7 CEO 7 IT/Networking Mgmt CFO 7 74% IT/Networking Professionals IT Steering Comittee Line of Business COO Business Professionals 6 63% 60% 5 55% CSO/CISO 4 Q. Including yourself, which of the following individuals or groups are involved in the outsourcing decision-making process at your company? (check all that apply) 3

4 Accessing Skills Tops Cost Reduction As Driver Accessing skills not available in-house Cost reduction Managing variable staffing needs Supporting new business initiatives Improving business or tech processes Improving business continuity/service levels Shifting to cloud computing models Supporting new consumer tech Keeping pace with market change Enabling innovation Supporting co. globalization strategy Managing change due to M/A Meeting increasing demand for data analytics Supporting bus ops in non-domestic markets 52% 44% 50% 34% 44% 3 35% 23% 32% 24% 32% 2 24% 1 22% 1 20% % 13% 12% 32% Driver Measurable positive impact Q. What are the top five drivers for outsourcing functions or processes at your company? Q. In which of the following areas have your company s outsourcing investments had a measurable positive impact? 4

5 Poor Vendor Service Tops Security and other Risks Poor service 3 Data security 33% Loss of internal knowledge 30% Hidden/unexpected charges 25% Legal/contractual risks 1 Governance issues 1 Turnover at vendor 1 Vendor mgmt 15% Dimished value of IT org 12% Ensuring long-term access to data & BI 12% Inability to measure results 12% Lack of acceptance internally Cross-cultural issues Q. What are the top three risks that your company associates with outsourcing functions or processes? 5

6 , BCDR & Data Center Top Short-term Opportunities Web Hosting App. Dev. App. Maintenance /msging Data Center ops Help desk Business continuity/disaster recovery Network mgt Storage Other infrastructure (i.e. security) Desktop/endpt mgt Architecture & IT Strategy Other IT functions/processes 22% 21% 21% % % 5% 3% 4% 3 13% 14% 5% 82% % % 45% % 42% Outsource currently,no plans to bring in-house Outsource currently, plan to bring in-house in next 12 mo N/A Plan to outsource in next 12 mo Outsourced previously, brought in-house past 5 years Q. Which of the following types of functions and processes does your company: a. outsource currently with no plans to bring in-house; b. outsource currently but plan to bring in-house over next 12 months; c. Plan to outsource over next 12 months; d. previously outsourced but brought back in-house over the past 5 years; e. not applicable. 6

7 Business Critical Areas Unlikely to Outsource Printing 25% 4% 5% 5 E-commerce 1 5% 64% Legal 1 4% 4% 5% 6 Call center 15% 4% 65% HR 13% 5% 4% 71% Marketing 4% 73% Financial 3% 73% Procurement 5% 4% 7 Other bus functions/processes involving IT 3% 3% 2% 8 Outsource currently,no plans to bring in-house Outsource currently, plan to bring in-house in next 12 mo2 N/A Plan to outsource in next 12 mo Outsourced previously, brought in-house past 5 years Q. Which of the following types of functions and processes does your company: a. outsource currently with no plans to bring in-house; b. outsource currently but plan to bring in-house over next 12 months; c. Plan to outsource over next 12 months; d. previously outsourced but brought back in-house over the past 5 years; e. not applicable. 7

8 India Dominates Enterprise Outsourcing United States India Canada China United Kingdom Mexico Philippines 34% % 5% 3% 2% 3% 3% 2% 2% < [NET] Effective Not Effective 44% 44% 45% Q. From which of the following countries are you currently outsourcing services from? 8

9 Conclusion Outsources Process Lead by IT Stakeholders Use of Sourcing will grow and Cloud seen as new driver. Poor Service Tops Security as Barrier to Entry, however customers need to improve their service practice and better measure results. Those who have realized success most likely to increase their outsourcing Among IT Execs, no vendor has emerged as an Outsourcing Thought leaders. 9

10 Contact To view the full study please contact Bob Melk at 10

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