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TheMarketEnvironmentStrategicOutsourcingIBM'sCapabilitiesOnDemandSloweconomicgrowthandpressurestoimproveearningsarecombiningtomakecostcuttingtheprimaryagendaitemforalargemajority(78%)ofcompaniesGrowthisemergingasanimportantissueaseconomicrecoveryhasbeenpostponed(andmaybeslowtoreturn).ITcontinuestobeanimportantleverinachievingthecostsavingobjectiveformostcompaniesintwoverydifferentwaysITisbeingtaskedtoenablebusinessprocessefficiencyITspendingisalsoasourceofsavingsasbudgetsforallfunctionsarebeingtrimmed.Ingeneral,ITbudgetpressureisinlinewiththeoverallbusiness,however30%ofrespondentsindicatethatITspendinghasbeencutmorethanotherfunctionswhile10%statethatIThasbeenprotectedfromcutsToday’sEconomyisForcingCompaniestoAddressComplexNeedstoEnhanceShareholderValue"Strategicoutsourcingpositivelyimpactsshareholdervalue.Ourresearchsuggeststhedifferenceisintheorderof5.4%abovetheindividualsectoraverageand4.9%abovetheoverallFTSE100."-Source:MorganChambers,"OutsourcingintheFTSE100:TheDefinitiveStudy""EvidenceshowsthatIToutsourcinghasadiscerniblepositiveimpactonshareprices.Astudyof27companiesundertakinglargeIToutsourcinginitiativesindicatesanaveragegaininshareholdervalueof5.7%overandabovethegeneralmarkettrend."-Source:SternStewart,"ITOutsourcingandShareholderValue"CostRevenueCustomerEfficiencyGrowthSatisfactionSubstantialmarketgrowthoverlastfiveyears;growthanticipatedat9%through2007.IBMisamarketshareleader.SOaspercentageofIBMrevenueThestrategic(transformational)andconstraint(necessaryevil)segmentsarebecominglessprevalent.PercentoftheFortuneXthatOutsourcedfrom1997-2002StrategicOutsourcing:WhatistheValuefortheCustomer?UnderstandyourcorecompetenciesinlightofyourbusinessstrategyDeterminewhatportionsofyourportfoliotooutsourceIBMcanpartnerwithyourcompanyinavarietyofways--fromout-tasking,toselectiveoutsourcingofoneofmoreITfunctions,tofull-scaleoutsourcingSelectanoutsourcingproviderwhowillbuildastrongrelationshipwithyourcompanyIBMtakesarelationshipapproachthatensurescl
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