Steady growth for outsourcing market in 2008

Spending on third-party providers will increase by eight per cent this year, says research from Gartner

The outsourcing market is growing solidly

The global outsourcing market will grow eight per cent in 2008, according to research by analyst Gartner.

The value of publicly-disclosed IT and business process outsourcing contracts dropped by 50 per cent during 2007, says the study. But as the market matures and becomes more commonplace, fewer deals may be reaching the world's press, suggested the analyst. Companies are outsourcing more, but electing to use a multi-provider strategy and so deals are smaller in size and less reported.

Businesses need to offer trust and control to their suppliers if they are to fully benefit from outsourcing deals, said Kurt Potter, research director at Gartner.

“Although user organisations often have fundamentally sound procurement organisations to initiate outsourcing contracts, for many, their IT sourcing strategies and governance structures are still immature, lacking altogether, or misaligned with enterprise objectives,” said Potter.

“Because these organisations lack the basic building blocks for successful vendor management and outsourcing success, expected cost savings and other benefits are difficult to obtain.

Indian outsourcing firms grew their business by 40 per cent in the US in 2007 and 60 per cent in Europe.