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 % have work done there). Labour costs were the biggest area for savings (according to 86 % of respondents). And application development was the main activity (86 % 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
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 % % 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 % of the respondents.
45 % Systems and architecture planning
43 % Research and development
38 % Business process (such as HR, finance)
35 % Data centre
32 % IT infrastructure
22 % Call centre
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.