First Outsourcing Index Predicts 35 Percent Outsourcing Growth

Business Wire, Feb 13, 1997

PARSIPPANY, N.J.--(BUSINESS WIRE)--Feb. 13, 1997--The first quarterly Outsourcing Index, released today, measuring the use of external staff resources by companies, projects 35 percent outsourcing growth in the 12-month period ending June 1997, an increase in outsourcing industry revenues from about $80 billion annually to $108 billion. The announcement of the Index was made here today by Frank J. Casale, executive director of The Outsourcing Institute and by Michael Flock, president - Dun & Bradstreet Asia-Pacific, Canada and Latin America.

More than 50 percent, or $40 billion a year, of current outsourcing is concentrated in information technology, marketing and sales, and financial functions, such as banking, credit, and collections, according to the Index. Information technology represents the largest single area of outsourcing, an estimated 22 percent, currently worth over $17 billion. Finance, marketing and sales, and administration account for about 13 percent, or $10.4 billion annually. Manufacturing makes up 11 percent, or about $8 billion per year, of the total.

Additional key findings of the Index included:

o more than half of the organizations surveyed have increased their level of outsourcing in the second half of 1996.

o current users planning to expand outsourcing to additional functions within their company will account for approximately 75 percent of the expected increase;

o approximately 15 percent of all functional areas within large companies use some outsourcing activity.

Developed jointly by The Outsourcing Institute and Dun & Bradstreet Receivable Management Services, the Outsourcing Index is designed to reflect historical, current and planned levels of outsourcing activity by US corporations with more than $80 million in annual sales.

"The Index reflects just how rapidly outsourcing is being adopted as a management strategy. The period growth of 35 percent is especially significant when compared to the 15 percent growth of the highly touted computer software industry," said Marq Ozanne, vice president, Market Research and Planning of D&B, and an adjunct professor of business at the University of Connecticut.

"By acting as the first true barometer of the outsourcing marketplace, the Outsourcing Index provides significant benefits to both prospective buyers and providers of outsourcing in their efforts to accurately evaluate marketplace directions within their industry sector," said Casale.

The initial index findings project growth in the U.S. for the 12- month period from July 1996 to June 1997, with a 95 percent confidence level and a margin of error of plus or minus 3 percent. Projections were made based on a survey with 600 respondents conducted during the second and third quarters of 1996.

For more information and a copy of the Outsourcing Index Management Briefing, call The Outsourcing Institute at 1-800-421-6767 or D&B at 1-800-700-0756.

The Outsourcing Institute is a professional association founded in 1993 in response to corporate America's growing need for objective and timely information on the strategic use of outside resources. The Institute acts as a repository of information, experience and expertise on outsourcing and related sourcing alternatives.

Dun & Bradstreet (D&B), a company of The Dun & Bradstreet Corporation, is the world's leading provider of business-to-business credit and marketing information, and receivable management services.

CONTACT: Dun & Bradstreet

Mike Azzi

908/665-5694

azzim@dnb.mail.com

Note: Graph available upon request

or

The Outsourcing Institute

Anne Gilroy

800/421-6767

agilroy@outsourcing.com