India Is the Major Offshore Outsourcing Destination

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.