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US federal IT outsourcing to touch $17.6 bn in 2010

Information technology outsourcing by the US government will increase at an annual growth rate of nearly 8 per cent.

world Updated: Jan 14, 2006 09:33 IST

Information technology outsourcing by the US government will increase at an annual growth rate of nearly eight per cent and touch $17.6 billion by fiscal 2010, according to a market research firm.

This increase in federal IT outsourcing, from the $12.2 billion spent in fiscal 2005, will be registered with the help of specific drivers like the Office of Management (OMB) and Budget's "Lines of Business" (LoB) initiatives for HR and finance management, federal health architecture, IT security and other processes, says research firm, Input.

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, the Reston-based Input states.

"A number of factors have combined to make outsourcing one of the fastest growing federal market segments over the past several years," said Chris Campbell, an Input analyst.

"In a time of war, a deficit, and tightening federal budgets, Input expects the federal IT outsourcing to remain one of the healthiest federal markets," he adds.

The LoBs, which include HR management, financial management, grants management, case management, federal health architecture, and IT security, will require agencies to continue spending on outsourcing.

For each LoB, government agencies will submit their business cases to the Centers of Excellence - those agencies deemed specifically qualified to perform LoB services.

"As a result, agencies will focus on transitioning major programmes out of their agency to a shared service provider," Campbell says.

First Published: Jan 14, 2006 09:33 IST