Cap Gemini Study: Nine In 10 Companies Outsource

And in what could spell good news for technology solution providers, eight in 10 of those companies expect to either spend the same amount or more on outsourcing in the coming three years, according to a study released by the New York-based IT consultant.

The study, conducted for Cap Gemini Ernst and Young by IDC, was released just before the consultant hosted a forum on challenges presented to IT in the current economy.

"Permanent volatility is now part of the economy," said Mark Hauser, Cap Gemini Ernst and Young's CEO for the Americas. "It's part of business. Permanent volatility is here to stay."

To underscore that point, the study found that companies in volatile industries--including financial, energy and telecommunications--spend twice as much as other companies on IT outsourcing.

Hauser noted that the gross domestic product (GDP) during the first quarter of the year was 5 percent. It slipped to 1 percent growth during the second quarter and is expected to show 4 percent in the third quarter and 2 percent in the fourth.

"That type of volatility is unprecedented in the economy," Hauser said.

The survey was conducted of 65 companies across nine different industries, with average revenue of more than $2.2 billion each.

More than half those companies surveyed said they found outsourcing makes them more adaptable and flexible; 42 percent said it helps them with "business transformation;" and 40 percent said it helps add value by allowing the company to focus on its core business.

The survey found only 6 percent said outsourcing provided cost savings as a primary benefit.