What Activities Contribute the Most to I.T. Innovation?\n\n\nIn-house\n76%\n\nOutsourced\n24%\n\nPercent Dissatisfied With the Level of Innovation Provided By\n\n\nInternal IT organization\n15%\n\nDomestic IT service providers\n21%\n\nOffshore IT service providers\n44%\n\nTop Reasons for Outsourcing \n\n\nLabor cost savings\n58%\n\nFocus on core business\n33%\n\nAccess to specific skills\n32%\n\nTo maximize resource availability\n29%\n\nTop Activities Outsourced\n\n\nDOMESTICALLY\n\n\nApplication development\n47%\n\nHelp desk\/user support\n37%\n\nWebsite development\n35%\n\nWeb services\n29%\n\n\u00a0\n\n\nOFFSHORE\n\n\nApplication development\n41%\n\nWebsite development\n22%\n\nHelp desk\/user support\n21%\n\nQA\/testing\n19%\n\nDissatisfaction with Level of InnovationDissatisfaction 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:\n\n\nMAIN REASONS FOR OUTSOURCING DOMESTICALLY\nDISSATISFIED WITH LEVEL OF INNOVATION PROVIDED\n\nOther cost savings\n39%\n\nCompetitive pressure\n32%\n\nBusiness\/Management pressure\n31%\n\nLabor cost savings\n27%\n\n\u00a0\n\n\nMAIN REASONS FOR OUTSOURCING OFFSHORE\nDISSATISFIED WITH LEVEL OF INNOVATION PROVIDED\n\nCompetitive pressure\n64%\n\nBusiness\/Management pressure\n57%\n\nOther cost savings\n55%\n\nLabor cost savings\n47%\n\nGreatest Barriers to Innovation by Outsourcers\n\n\nCultural or communication issues\n54%\n\nLack of skills within the outsourcer\n37%\n\nInternal resistance\n32%\n\nInternal budget restraints\n30%\nMethodology: 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.