Despite IT Offshoring savings showing a decline in recent years, several companies continue to go back to it. According to results from the sixth annual Offshoring survey conducted by the Center for International Business Education (CIBER) and the International Offshoring Research Network’s (ORN) Project at Duke’s Fuqua School of Business, average cost savings achieved by offshoring has declined consistently over the last five years. This is, in part, because only a few companies have an enterprise-wide sourcing strategy.
Despite the findings, almost half the companies surveyed were getting ready to ramp up offshoring initiatives in the next 3 years. The reason? Outsourcing IT operations to offshore service providers boosts organizational flexibility.
Mature offshore outsourcers provide increased organizational flexibility, and this jumped from 48% in 2010 to 66% in 2011. Respondents with existing offshore operations said that organizational agility was one of the driving forces behind their outsourcing decisions. What were these companies doing differently in order to attain that level of agility? Here are two important findings from the survey:
- Delivery Model Strategy: Ideally located delivery centers that maximize flexibility, even when faced with currency flexibility and infrastructure failure.
- Diverse outsourcing: Businesses chose to outsource a more varied range of activities, and were not hesitant to choose second-tier cities over global hotspots…this in turn, provided them with greater savings.
Companies now understand that outsourcing is not just about cost-cutting. A well-placed global sourcing strategy is part of the larger corporate growth strategy. And going forward, organizational flexibility will be critical for US businesses if they want to compete with their international rivals in emerging markets.
At Suyati, we understand that outsourcing is not just about cutting costs. Our Dedicated Global Team is committed to finding solutions that are flexible as well as cost-effective. With our primary delivery center in Kochi, a tier 2 city, our attrition rates are practically nil, while our employees enjoy a great standard of living at lesser cost.
So want the expertise, the cost savings and the flexibility that comes with having a Dedicated Global Team? Just call us!
Sources
http://www.cio.com/article/700906/Offshore_Outsourcing_Can_Boost_Agility?page=1&taxonomyId=3195
http://www.cio.com/article/660264/IT_Offshoring_Savings_Declined_for_Past_5_Years
