Booming Logistics Outsourcing Industry Helps Dot-Coms Deliver, According to IDC

FRAMINGHAM, Mass., February 1, 2000 — Logistics, the process of moving goods from supplier to vendor to customer, has been the missing link in many ecommerce business plans. New market research from IDC has identified a burgeoning opportunity in creating and optimizing logistics business processes. Using information technology, an emerging group of service providers are offering ordering, fulfillment, and transportation services that go beyond merely the physical flow of the products to encompass the process and information necessary to optimize a customer's logistics function.

According to IDC, the increasing popularity of ecommerce and ebusiness solutions is fueling tremendous opportunities in the logistics business process outsourcing (LBPO) market.

"In a world of at-home delivery, the logistics industry makes ecommerce possible," said Ting Piper, senior research analyst with IDC's IS Outsourcing and BPO program. "Many dot-coms will very soon realize that building a cyber business involves much more than spending millions of dollars on marketing and advertising and will very shortly shift their focus to actually delivering value, rather than merely positioning to deliver it."

eCommerce demand will drive growth in the LBPO market well into the new millennium. IDC forecasts U.S. LBPO will grow from $67 billion in 1999 to $114 billion in 2003. During that time, the logistics industry will undergo a transformation from an asset-driven business model to an information-driven business model. To be successful, logistics service providers will not only need experience in transportation management, warehousing management, order fulfillment, freight forwarding, and reverse logistics, but they will also need the ability to help engineer their clients' business processes.

IDC's new report, Logistics Business Process Outsourcing: A Market Overview and Service Provider Analysis (IDC #B21263), thoroughly analyzes the U.S. logistics BPO services market. The report is based on IDC interviews with logistics service providers. It discusses current market conditions, trends, drivers, and market segments. The competitive landscape is analyzed, and IDC's Leadership Grid, which compares providers based on their alignment with market opportunity and ability to gain market share, is included. Additionally, the report includes complete profiles on 10 logistics service providers. To order a copy of the report, contact Sally Donovan at 1-800-343-4952, ext. 4219 or at sdonovan@idc.com.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 42 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

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