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.
Once they figure out cost savings, executives most often cited IT productivity and competitive advantage as the benefits of offshore outsourcing
IT department productivity
Internal customer satisfaction
Increase in revenue
Soft benefits (employee job satisfaction, turnover rates, morale)
Customer satisfaction (external)
Percent of business/service conducted via the Web
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.
Systems and architecture planning
Research and development
Business process (such as HR, finance)
Source: CIO’s offshore outsourcing survey tabulated results from 101 CIOs, IT executives and managers during May 2003.