META Group, Inc. analysts forecast that 80 percent of companies around the world will have outsourced at least one IT function by the end of 2005. IDC also anticipates a rise in outsourcing figures. As IDC Research Manager Mike Friend explains, "dragging along inefficient and underfunded support functions while at the same time fighting off lean and mean competition has obvious consequences in terms of cost of operations, customer satisfaction, and market share."
Though the benefits of outsourcing are many, SAP customers should avoid quickly leaping into hosting projects. Outsourcing involves careful planning - it doesn't mean haphazardly offloading problematic IT projects that chew up cost, time, and personnel resources. Done correctly, outsourcing can help you focus on your core business expertise and reap the benefits noted above. But done incorrectly, you can end up worse off than you started, doubling up on time and expenses invested in carelessly outsourced IT projects.
To increase cost transparency and planning reliability, improve systems performance, and reduce the total cost of ownership, SAP customers must keep the following four
points in mind as they consider outsourcing: