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Aberdeen Research Asks, Who Outsourced the Outsourcers?
Aberdeen's research shows that 92 percent of enterprises surveyed outsource application development and maintenance work to a provider; 63 of those companies outsource to a provider offshore (at least four times zones away). While India remains the leading offshore destination for many companies, Eastern European, Russian and Asian providers are maturing quickly and sustaining double-digit growth, making the practice of offshoring, or more importantly multisourcing, more complex and no longer just commodity based.
Figure 1: Top Business Pressures Driving Companies to Outsource IT Work Offshore
Faster global communications and the never-ending pressures (Figure 1) to lower organizational costs have given rise to a cost-effective alternative for developing and maintaining the applications on which a business runs: offshore outsourcing.
Figure 2: Top Challenges Organizations Face in Offshore Outsourcing Relationships
Aberdeen research found that the most frequent roadblocks to success for a company during the entire contractual process with an offshore outsourcing provider were ensuring the right degree of management resources to oversee providers and their work and finding a provider with the right skill set (Figure 2).
Figure 3: Factors Causing Offshore Outsourcing to Exceed Budgets
Despite the cost savings of outsourcing to India, there are two areas in which respondents said their costs increased over what they had budgeted (Figure 3) compared with the best in class: internal technical training and the costs associated with bringing providers' new employees up to speed. On the other hand, companies that outsourced to India did not have as much of an issue with "scope creep" than best-in-class companies did.
For more information, go to http://www.aberdeen.com/.
This piece is brought to you by the DM Review editorial staff.
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