Aging Workforce Helps Drive State Government Outsourcing

State and local government outsourcing expenditures on information technology (IT) are expected to grow from $10 billion in fiscal year 2005 to nearly $18 billion by fiscal year 2010 (FY10), according to a report released by INPUT. Despite many government officials' claims, outdated system infrastructures and an aging workforce will remain major factors forcing the market's pronounced 75 percent growth over the next five years.

“As the economy continues a strong recovery, we expect outsourcing opportunities to increase on the state and local level,” added [James] Krouse [, manager, state & local market analysis at INPUT]. “However, system integrators should remain vigilant in researching government opportunities on a case-by-case basis. The loss of seasoned government workers will affect nearly all state & local agencies. While this will be a significant stimulus for outsourcing contract decisions, ongoing maintenance of outdated legacy systems will provide more definite targets for outsourcing contract opportunities.”

Source: Press Release INPUT (January 23, 2006)