Website/E-Commerce Outsourcing Declines

April, 2017

Website and e-commerce outsourcing is one of the most ubiquitous forms of outsourcing, and the shift toward web-enabled business processes and e-commerce has prompted organizations to reassess their online strategies. Those that outsource the function are turning to outsourcing partners that can provide the needed expertise and a flexible, scalable infrastructure to provide highly available and reliable website and e-commerce systems.

However, as shown in Figure 2 from our full report, Website/E-Commerce Outsourcing Trends and Customer Experience, the percentage of IT organizations that are outsourcing at least some of this function has dropped to 46% at the median, down from a high of 61% in 2014.

WebE Comm fig 2 - Website/E-Commerce Outsourcing Declines

Website and e-commerce outsourcing covers a wide variety of operations. It includes everything from hosting an organization’s website to coordinating its entire e-commerce operation. It also can include designing and managing the website and managing web marketing operations. Partners in this market can be large technology providers such as Amazon, Google, IBM, HP, and other brand-name IT and software vendors. Often, however, they are smaller regional and local service providers that can perform any number of website and e-commerce tasks ranging from online marketing to website management and development.

“Outsourcing some or all of your website or e-commerce work is still popular, despite the recent decline,” said Tom Dunlap, director of research at Irvine, Calif.-based Computer Economics. “It’s part of a larger trend we’ve seen in the reduction of outsourcing frequency. Companies might be bringing more work in-house, but given the importance and specialist nature of ecommerce, we’d expect a large percentage of companies to continue to rely on experienced vendors in this area.”

We define IT outsourcing as contracting with a service provider to perform an IT function that is commonly performed in-house. This report does not use the term “outsourcing” as a synonym for “offshoring.” In fact, most outsourcing is done with domestic service providers. From the point of view of the IT organization, any function that is not performed by its IT staff is outsourced, regardless of whether the outsourcing is onshore, near-shore, or offshore.

To help IT executives better assess their options in this always-changing landscape, the full report analyzes the percentage of organizations outsourcing website and e-commerce operations (frequency), the average amount of work outsourced (level), and the change to the amount of work being outsourced (net growth trend). We also present data on cost and service experience and on how these trends differ by organization size and sector.

This Research Byte is based on our report on this subject, Website/E-Commerce Outsourcing Trends and Customer Experience. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).