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Offshore IT outsourcing once was considered the wave of the future. Apparently, however, the practice has taken a sharp downturn in popularity, according to recent survey results from Menlo Park, Calif.-based executive search and staffing firm Robert Half Technology.
A staggering 94 percent of participating CIOs responded that their companies currently are not outsourcing technology positions to firms outside the U.S. Further, the survey indicates that this trend will not reverse in the immediate future. Eighty-six percent of all respondents said they have no plans to change their level of IT outsourcing in the next two years. The survey was conducted by an independent research firm and was based on more than 1,400 interviews with CIOs from a random sample of U.S. companies with 100 or more employees.
The news isn't all bad for offshore IT outsourcing providers, however. Of the 111 respondents whose firms currently engage in offshore outsourcing, 43 percent said their companies plan to increase their level of outsourcing within two years.
Among respondents whose firms previously had ceased offshore operations (61 respondents), the most popular reason cited for doing so was that the operations required too much management and close oversight. Additionally, 30 percent of these CIOs believed that they weren't realizing expected cost savings.
For firms that are exploring their offshore outsourcing options, Robert Half Technology offers the following advice:
- Look for stability. Choose a vendor that has a track record of retaining employees. Seek a company that has a succession plan in place, as well as defined career paths for their IT professionals.
- Setup time and costs. New jobs or even departments may need to be created to handle vendor selection, manage contracts, train workers and oversee remote teams.
- Management challenges. Dispersed IT teams may require a different level and type of oversight from management. Consider offering training for managers who will lead overseas teams. Some companies may find that they need a full-time project manager to oversee the offshore vendor.
- Security and privacy concerns. Intellectual property risks -- such as the enforcement of patents, copyrights and trade secrets -- may require additional oversight and resources. Benchmark best practices in the areas of security and proprietary technology, for example, from similar companies that have done it successfully.
