IDG Enterprise Outsourcing & Service Providers Survey Results

May 2011

OUTSOURCING

OUTSOURCING

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, 2011. 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: +/- 2.9%

METHODOLOGY RESULTS CONCLUSION DEMOGRAPHICS

OUTSOURCING

Decision-Making Process Primarily Led by IT Stakeholders

CIO
CEO IT/Networking Mgmt CFO IT/Networking Professionals IT Steering Comittee Line of Business COO 67% 63% 60% 57% 55% 47% 79% 78% 76% 74%

Business Professionals
CSO/CISO

METHODOLOGY RESULTS CONCLUSION

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)

DEMOGRAPHICS

OUTSOURCING

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
23% 24% 26% 24% 34% 36% 35% 32% 32% 44% 44% 52% 50%

Supporting co. globalization strategy

Managing change due to M/A Meeting increasing demand for data analytics Supporting bus ops in non-domestic markets
Driver

19% 22% 17% 20% 17% 19% 15% 13% 12% 11% 9% 32% 10% 9%

Measurable positive impact

METHODOLOGY RESULTS CONCLUSION

Q. What are the top five drivers for outsourcing functions or processes at your company? Q. In which of the following areas have your companys outsourcing investments had a measurable positive impact?

DEMOGRAPHICS

OUTSOURCING

Poor Vendor Service Tops Security and other Risks

Poor service Data security Loss of internal knowledge Hidden/unexpected charges Legal/contractual risks Governance issues Turnover at vendor Vendor mgmt Dimished value of IT org Ensuring long-term access to data & BI Inability to measure results Lack of acceptance internally Cross-cultural issues

38% 33% 30% 25% 19% 17% 17% 15% 12% 12% 12% 10% 10%

METHODOLOGY RESULTS CONCLUSION

Q. What are the top three risks that your company associates with outsourcing functions or processes?

DEMOGRAPHICS

OUTSOURCING

Email, BCDR & Data Center Top Short-term Opportunities

Web Hosting App. Dev. App. Maintenance Email/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

39% 32% 30% 26% 26% 22% 21% 21% 19% 18% 17% 10% 8% 7% 5% 3%4% 9% 13% 8% 11% 9% 9% 6% 6% 10% 7% 5% 8% 9% 14% 11% 7% 8%

9% 8% 9% 6% 6% 10% 10% 10% 8% 8%

7% 11% 10% 9%

8%

37% 40% 42% 45% 49% 53% 48% 54% 56% 58% 58% 66%

6% 6% 10% 82%

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

METHODOLOGY RESULTS CONCLUSION DEMOGRAPHICS

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.

OUTSOURCING

Business Critical Areas Unlikely to Outsource

Printing 25% 19% 18% 15% 13% 11% 11% 7% 4% 5% 7% 5% 6% 4%4% 5% 8% 4% 8% 5% 4% 7% 6% 4% 6% 6% 3% 8% 59% 64% 69% 65% 71% 73% 73% 78% 86%
Plan to outsource in next 12 mo Outsourced previously, brought in-house past 5 years

E-commerce
Legal Call center HR Marketing Financial Procurement Other bus functions/processes involving IT

7% 5% 4% 6% 6% 3%3%2%

Outsource currently,no plans to bring in-house Outsource currently, plan to bring in-house in next 12 mo2 N/A

METHODOLOGY RESULTS CONCLUSION DEMOGRAPHICS

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.

OUTSOURCING

India Dominates Enterprise Outsourcing

United States
17% 34% 37% 44% 44% 45% 33%

India
19% 6%

Canada
5%

11%

8% 7% 10%

China
6% 3%

8%

United Kingdom
2% 3%

7% 6% 8% 6% 8% 6%
METHODOLOGY

Mexico
3% 2%

Philippines
2%

<1000

1000+

[NET] Effective

Not Effective

RESULTS CONCLUSION

Q. From which of the following countries are you currently outsourcing services from?

DEMOGRAPHICS

OUTSOURCING

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.
RESULTS

METHODOLOGY

CONCLUSION DEMOGRAPHICS

OUTSOURCING

Contact
To view the full study please contact Bob Melk at bmelk@idgenterprise.com

METHODOLOGY RESULTS CONCLUSION DEMOGRAPHICS

10