E-sourcing has become a realistic business proposition due to the development of what IBM describes as an 'e-business infrastructure'. The e-business infrastructure is underpinned by three key trends. The first of these trends is the growth in network capacity as a result of heavy investment by telecommunications companies in recent years. Second, the architecture of computing now enables disparate groups of networked devices to operate as a single system; Extensible Markup Language (XML) facilitates data exchange between devices through tagging of content in standard formats, independent of operating platform. Finally, hardware platforms such as servers and storage systems are able to support multiple users, with each user's processing and data held securely and separately in virtual spaces, while running on the same physical machine: this is crucial for those organizations providing e-sourcing services.

E-sourcing offers a series of benefits to businesses, and this explains why it is moving from an interesting concept into a business reality. The first benefit is financial: rather than investing large sums to build new capabilities and then waiting to see whether the resulting business benefit justified the initial cost, businesses are able to receive (and pay for) e-sourcing services as and when their business demands it. For any business with cyclical demand, such as toy retailers at Christmas time or financial product providers at the end of the tax year, the ability to buy additional capacity for short periods of time is of significant financial value. The second benefit is simplicity: rather than manage complex programmes to develop new capabilities internally, businesses can focus on their core business while gaining new capabilities rapidly through e-sourcing. The third benefit is access to innovation: individual businesses can rarely afford to keep up to date with every marketplace innovation in applications, processes and infrastructure. E-sourcing providers, however, have the ability (and in order to be competitive, the obligation) to innovate constantly and improve the e-sourcing services they provide.

There are a number of concerns, however, which must be addressed for e-sourcing to achieve its full potential. Security is the primary concern of users. Data is one of the most valuable assets many businesses have: they will need to have confidence that that data will be managed securely and with due regard for privacy concerns. Second, e-sourcing at this stage remains a largely unproven concept: most businesses will need to see specific services and references from other organizations that are already enjoying the benefits of e-sourcing. Finally, there are technology issues to overcome: technical standards have yet to be agreed, implementation approaches proven, and performance demonstrably equal to or better than existing levels.