Out of Control

The backlash against offshoring ended up hurting outsourcing. So says a new study by the market research firm Input. In 2004, IT outsourcing by state and local governments barely topped 2003's mark.

That’s what happens when confusion mixes with politics:

Confusion between “outsourcing” and “offshore outsourcing” fueled fierce political debate among the candidates campaigning during this election year … Although the elections are over and the economy continues to improve, these political debates are expected to have a lasting effect on market growth over the next one to two years.

However, outsourcing is expected to speed up in the long term:

“Retiring government employees, as well as archaic government legacy systems, are undeniable factors in the state outsourcing market,” said James Krouse, manager of state & local market analysis at INPUT. “The increasing demand for outsourcing in the coming years will be borne out of necessity which politics will be unable to refute.”