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.
