Outsourcing in broad terms is a transfer of some business functions or components of business processes to an outside contractor. To remain competitive, many companies outsource as a way to reduce costs, increase efficiencies, and refocus critical resources. Many organizations have their own IT departments catering to their software and other IT enabled services needs; while others go for IT Outsourcing. When you consider the advantages of outsourcing, you'll realize there's a lot to gain by using it as an intrinsic part of your business strategy.

Forrester forecasts that US spending on IT services and outsourcing will grow to $184 billion in 2005. Meta Group predicts that the market for offshore services will continue to grow nearly 20% annually through 2008.

By outsourcing, you can

• Reduce overheads, operating costs and free up resources.
• Save on manpower and training costs.
• Establish long-term, strategic relationships with world-class service providers to gain a competitive edge.
• Increase customer satisfaction.
• Leverage the provider's extensive investments in technology, methodologies and people.
• Benefit from the provider's expertise in solving problems for a variety of clients with similar requirements.
• Focus scarce resources on time-critical projects such as application reengineering.
• Obtain needed project management and implementation consulting expertise, along with access to best practices and proven methodologies.
• Reduce the risk of technological obsolescence and increase efficiency by consolidating and centralizing functions.
• Reduce the overall IT management burden while retaining control of strategic decision making.

Who should outsource?

Just about everybody - from entrepreneurs in the SOHO segment to Small and Medium Enterprises (SME), to large businesses and empires with diversified interests and varied business processes. Every business benefits hugely through outsourcing because technology is changing so fast, it has to be leveraged and used to the maximum to deliver competitive advantage to a company. North America leads in outsourcing spending, representing 39 percent of the global total, followed by Asia at 31 percent and Europe at 25 percent.The future shape of business is being redefined through outsourcing.