Going To The (Out) Source

The majority of outsourced IT functions land in India, while contact center services come to the U.S.
Posted September 10, 2003

Robyn Greenspan

IT professionals that want to follow the jobs may want to consider a move to India, as ITtoolbox finds that the country claims 21 percent of the global companies that outsource abroad. While 72 percent of the 612 IT professionals that were surveyed said that they outsource all or a portion of their IT functions, 31 percent went outside their own countries.

The August 2003 survey reveals that the majority (36 percent) outsource to take advantage of cost savings, while nearly 15 percent have a need for special skills or services. Roughly 14 percent preferred to use their internal resources for other purposes, followed by nearly 12 percent that cited a lack of in-house expertise.

Of the 28 percent who chose not to outsource, more than half (55 percent) were satisfied with their in-house talent, while nearly 8 percent were concerned about losing control. More than 6 percent found outsourcing to be too expensive, and just over 2 percent encountered organization resistance.

In addition to India, companies outsourced their IT functions to the U.S. (5.6 percent); Germany (2.8 percent); Australia/Oceania (2.6 percent); the UK (2.3 percent); China (2.1 percent); Mexico (2.0 percent); South America (1.9 percent); and Africa (1.4 percent). Significant portions also went to other European countries (13 percent) and other Asian countries (8.5 percent).

Interestingly, most of the global participants (45.65 percent) in an August 2003 Aberdeen Group report preferred the U.S. for outsourced contact center services, followed by the UK/Northern Ireland (12.4 percent). India was the third preferred country for outsourced contact center services at 11.61 percent.

More than 7-in-10 of the executives that Aberdeen surveyed reportedly outsourced their contact center services to improve the quality of customer service, while 68 percent were concerned with lowering costs. Just over 20 percent expected to increase their use of outsourced contact center services over the next 18 months.

The ITtoolbox survey found that the primary functions that were outsourced were software maintenance and support, followed by hardware maintenance and support, while fewer went outside their own companies for management services.

Global IT Outsourcing Overview
  Currently Outsourcing Planning to Outsource
Within 2 Years
Software maintenance/support 37.9% 25.7%
Hardware maintenance/support 34.5% 21.9%
Development and integration 32.7% 27.3%
Consulting 24.7% 17.0%
Education and training 16.5% 13.7%
Business process/
transaction management
14.5% 13.7%
Management services 9.3% 8.2%
Other 9.6% 6.7%
Source: ITtoolbox

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