Survey says outsourcing demand is rebounding
Survey says decelerating economic growth, other factors increase demand levels for IT and business process outsourcing during the last quarter of 2007.
In a report published in EquaTerra’s site over the weekend, 70 percent of respondents in their 4Q07 Pulse survey have said demand for Information Technology and business process outsourcing increased.
In fact, the report said, demand was up “19 percent over 3Q07, up 24 percent over 4Q06, and at the highest level recorded since 2Q05.”
EquaTerra is composed of sourcing advisors who help clients achieve sustainable value in their IT and business processes across more than 60 countries.
Despite fear of a recession in the U.S., jitters on virtually all major stock exchanges worldwide and widespread cut-backs in corporate spending, the report said.
Further, the report said that 59 percent of service providers cited new deal pipeline growth in 4Q07, and 57 percent expect demand to increase in 1Q08.
EquaTerra attributes the increase in outsourcing demand levels to a variety of factors including weak economic indicators, new functions outsourced, service providers readiness, and smaller, more numerous deals.
“The outsourcing market continues to evolve with more but smaller deals spread across a greater number of service providers and delivered on a more global basis,” the report said.
Stan Lepeak, EquaTerra’s Managing Director of Research, said in the report, “The projection for outsourcing investments remains positive and is improving.”
EquaTerra noted that the increase in outsourcing activity does not appear to be having a negative affect on workforces, the report also said.
For example, in IT which was the leading outsourced process cited by both EquaTerra advisors and service providers polled in 4Q07, the U.S. Bureau of Labor Statistics found that 300,000 additional jobs were added in 2007, average quarterly employment topped 3.76 million (up from 3.46 million at the end of 2006), and quarterly unemployment averaged just two percent, exactly the same as for the larger professional and management employment category, the report said.
The report also included the Top 2008 Sourcing Sector Trends, based on the same survey, several EquaTerra research studies, and client interaction; which lists anticipated 2008 trends, one of which was that outsourcing would continue to be recession-proof, among others.
