Asked about their companies’ offshore outsourcing experiences and expectations, 101 CIOs, IT executives and managers in a CIO survey confirmed what you might expect. India was the major destination (89 percent have work done there). Labor costs were the biggest area for savings (according to 86 percent of respondents). And application development was the main activity (86 percent contracted for this work offshore). The survey also found that companies expect a fast return and other benefits from going offshore.
Productivity Gain
Once they figure out cost savings, executives most often cited IT productivity and competitive advantage as the benefits of offshore outsourcing
44% IT department productivity
30% Competitive advantage
21% Employee productivity
20% Internal customer satisfaction
17% System uptime
13% Increase in revenue
13% Soft benefits (employee job satisfaction, turnover rates, morale)
11% Customer satisfaction (external)
8% Percent of business/service conducted via the Web
9% Other
No Area Untouchable
Asked which processes and applications they probably wouldn’t outsource to an offshore contractor, survey respondents say systems planning and R&D are important to keep in-house. But no process was deemed untouchable by more than 50 percent of the respondents.
45% Systems and architecture planning
43% Research and development
38% Business process (such as HR, finance)
35% Data center
32% IT infrastructure
22% Call center
17% Help desk
15% Systems administration/support
6% Application development/maintenance
Source: CIO’s offshore outsourcing survey tabulated results from 101 CIOs, IT executives and managers during May 2003.
