CIO's Exclusive Outsourcing and Innovation Survey

Disappointment with innovation provided by outsourcers broad and deep.

What Activities Contribute the Most to I.T. Innovation?

In-house 76%
Outsourced 24%

Percent Dissatisfied With the Level of Innovation Provided By

Internal IT organization 15%
Domestic IT service providers 21%
Offshore IT service providers 44%

Top Reasons for Outsourcing

Labor cost savings 58%
Focus on core business 33%
Access to specific skills 32%
To maximize resource availability 29%

Top Activities Outsourced

DOMESTICALLY
Application development 47%
Help desk/user support 37%
Website development 35%
Web services 29%
 
OFFSHORE
Application development 41%
Website development 22%
Help desk/user support 21%
QA/testing 19%

Dissatisfaction with Level of Innovation

Dissatisfaction with the level of innovation provided by IT services providers is highest for IT buyers who initially outsourced for cost reasons or due to competitive or management pressure:

MAIN REASONS FOR OUTSOURCING DOMESTICALLY DISSATISFIED WITH LEVEL OF INNOVATION PROVIDED
Other cost savings 39%
Competitive pressure 32%

Business/

Management pressure
31%
Labor cost savings 27%
 
MAIN REASONS FOR OUTSOURCING OFFSHORE DISSATISFIED WITH LEVEL OF INNOVATION PROVIDED
Competitive pressure 64%

Business/

Management pressure
57%
Other cost savings 55%
Labor cost savings 47%

Greatest Barriers to Innovation by Outsourcers

Cultural or communication issues 54%
Lack of skills within the outsourcer 37%
Internal resistance 32%
Internal budget restraints 30%

Methodology: The 2007 Outsourcing & Innovation Survey was conducted online among the CIO audience with the objective of collecting the opinions of senior technology executives regarding the increasing trend toward innovation by outsourcers. Beginning June 4, 2007, an e-mail invitation with a link to the survey was sent to a sample of CIO print, online and newsletter subscribers. The survey was cut off on June 12, 2007, with 290 completed questionnaires. The margin of error on a sample size of 290 is +/- 5.8 percent. Percents in this report are based on the total answering each question unless otherwise indicated. Percents may not sum to 100 due to rounding.

Copyright © 2007 IDG Communications, Inc.

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