Outsourcing & Offshoring Here To Stay

Despite some high-visibility setbacks and backlash from politicians and the public, Global 1000 IT executives and the providers of IT outsourcing services say outsourcing, both onshore and offshore, is here to stay.

In fact, of those participating in DiamondCluster International’s 2004 IT Outsourcing Study, 86% expect the use of offshore IT outsourcers to increase over the next 12 months.

IT outsourcing has all the characteristics of a maturing business, said Tom Weakland, who leads the outsourcing advisory services practice at DiamondCluster International, a global management consulting firm.

“Executives have become more realistic in their expectations and are now more likely to implement outsourcing initiatives incrementally,” Weakland said. “The outsourcing euphoria that we saw in 2002 has been replaced with a focus on sourcing as a business-enabler. While reducing costs is still the number one reason fueling the outsourcing trend, another key factor is that companies are looking to free up internal resources to focus on more critical initiatives.”

DiamondCluster’s survey was conducted through in-depth discussions with senior IT executives at global 1000 companies and with senior executives at outsourcing service providers in the U.S., India and other countries. Research was conducted in late 2003 and early 2004.

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