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January 11, 2006

Federal outsourcing market to hit $17.6bn in 2010

The federal IT outsourcing market will grow nearly 8% a year from $12.2bn in FY2005 to $17.6bn in FY2010, according to public sector analyst group Input.

By CBR Staff Writer

The forecast states that in a climate of ongoing war, budget deficits and federal spending cuts, outsourcing will continue to be one of the strongest federal markets. Agencies will look to IT outsourcing to cut costs, improve operations, and deliver new technology,

Generally speaking, the business challenges and market factors driving the decision to outsource are similar between the private and public sectors, said Chris Campbell, an Input analyst.

Specific drivers include the Office of Management and Budget’s Lines of Business initiatives for HR and finance management, federal health architecture, IT security and other processes. For agencies that are deemed unable to handle these process overhauls, there will be opportunities for shared services providers to step in and takeover certain duties, Input states.

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