Study: Canadian E-Businesses Should Outsource IT

With Canadian e-commerce players looking at an “enormous” expansion in online activity over the next five years, those thatdo not outsource their Internet technology needs are likely to run into a host of technological stumbling blocks, according to a study released Monday by ForresterResearch.

Because the country’s online economy is set to reach hypergrowth by the end of theyear, Forrester warned that e-businesses must revamp theiroperating models by using external technology (exT).

According to the research firm, exT is information technology (IT) owned and operated by outside parties and made available on a pay-per-use basis.

“As Canada’s business community moves beyond tentative forays intoe-business and accepts the online environment as critical to its future, oldown-it-and-control-it approaches to IT will not be effective,” saidForrester analyst Jordan Kendall. “Clear-thinking companies will embrace andimplement exT as a fundamental element of their e-business strategies.”

Adopting an exT strategy will allow companies to avoid becoming mired in complex technical issues that usually accompany widespread e-business transformation. By using exT to solve those concerns, e-businesses will be able to focus on honing their customer offerings, Forrester said.

Shifting Gears

Forrester said that as e-businesses realize that building and maintaining nonstop IT systems tomeet market demand is too cost prohibitive, the need to shift to exT will become obvious.

In addition, the study said that operating an effectivee-commerce enterprise requires sophisticated technical skills and fewbusinesses throughout the world have the capacity to integrate newtechnology at the rate it is created.

As a result, the report predicts that exT will be widely accepted in the next five years as the”proven best practice” to support a company’s infrastructure.

Driving Forces

In fact, Forrester said that the majority of companies will be relying moreheavily on exT over the next two years. About 58 percent of those surveyedfor the study said their use of exT will increase during that period, butonly 16 percent of these firms reported having a blueprint for thechangeover.

The top concerns keeping companies from adopting exT are the high costs andthe perceived low quality of exT services, said Forrester.

Lean and Mean

Forrester said the technological shift will also bring benefits to IT firms,which will lose mass by the move to exT, but at the same time gain value.

“In a world where operations and technology exist as one, IT executives willbe well-positioned to migrate to operations roles where they will overseeand manage the critical relationships between firms and their exT partners,”said Kendall.

To compile data and information for its report on “Canada’s Adoption ofexT,” Forrester surveyed IT professionals at 50 Canadian companies.

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