B2B is hot, outsourcing not

Evans Data, a technology research firm, is reporting two interesting statistics in its Fall 2003 Enterprise Development Survey:

• B2B is alive! Business-to-business e-commerce projects increased a whopping 40% in the last six months, going from 11th place in last year's survey to first place this year.



• Outsourcing is so 2002. The survey indicates that outsourcing actually decreased in the last year by more than 20%. There were 56% of businesses outsourcing some development, down from 71% in the year prior. Only 7% of companies report that they are outsourcing a majority of projects, compared to 12% in the previous year.

What does this all mean? Line56 draws its own conclusions. Let me draw mine. I take the decline in outsourcing as a very positive sign. Companies are finally confident that the recession is past. They are less interested in pursuing cost-savings from outsourcing and more interested in taking control of IT and increasing in-house competencies. I see this already in some of my clients that are planning major projects for 2004.

Furthermore, I take the resurgence of B2B as a sign that we are well past the hype phase of Internet commerce and that companies see real payback from connecting electronically to customers and suppliers. Companies aren't pursuing e-commerce because it's cool but because it's good business. The Evans survey points to an increase in projects involving Web services, but I see it also in traditional and Internet-based EDI. I'm sure that some of this is due to Walmart's mandate for Internet-based EDI (EDIINT AS2) on its suppliers and similar initiatives by other major channel masters.

This mainstream adoption of Internet commerce is also seen in the B2C side. This past Thanksgiving-day weekend had retailers reporting a huge surge in electronic orders, with consumers just saying no to long lines at brick-and-mortar stores. E-business is just becoming business as usual.

The full survey is available (at a price) from the Evans Data web site.