Twenty Customer and Supplier Lessons on IT Sourcing

by Mary C. Lacity

From an initial focus on cost reduction, IT outsourcing has become a complementary, routine mode of managing IT. Based on our own estimates, global market revenues will be US $150 billion by 2004, with 30%-35% of most large organizations' IT budgets managed by outsourcing arrangements. The question is no longer: "Should we outsource IT?"; it is now: "How do we exploit the ever-maturing external IT services market to achieve significant, strategic business leverage?" For customers, the answer lies in learning how to assess the contribution of their IT portfolios for current and future business value, continually monitor and evaluate market options, craft optimal contracts, and successfully manage supplier relationships. Based on 10 years of research in 543 companies, the accompanying Executive Report presents 16 lessons for customers and four for suppliers.

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Twenty Customer and Supplier Lessons on IT Sourcing August 2002