One reason companies continue sending tasks overseas is because
they are satisfied with the results.
Despite the challenges of moving IT, business process and
contact center services to India, China and other overseas
locations, companies are satisfied with their offshore outsourcing
initiatives, according to a new study by the Weissman Center for
International Business at Baruch College and The Paaras Group.
The joint study was based on surveys and interviews with 38
global companies, mostly based in North America.
The survey found that momentum for offshoring is
continuing unabated, especially as companies gain confidence and
experience in their ability to manage offshore operations. The
survey also found that offshoring delivered significant benefits
to pioneers as well as newcomers in 2003, with companies able to
improve quality while cutting costs. "Despite protectionist
backlash in the US and Europe, the offshoring wave has
turned into a Tsunami - an inevitable outcome of globalization
and economic integration," said Suresh Gupta, Managing
Partner of The Paaras Group. "In fact, the leaders in offshoring
are no longer focused solely on offshore opportunities. They
have graduated to a broader model of 'global' or 'smart'
sourcing, which combines multi-location, multi-vendor and both
in-house as well as outsourced solutions
for IT and business processing."
Key findings from the 2003 offshore outsourcing
survey include:
* Satisfaction Levels are High The vast majority of companies
(89%) moving IT, business processes and contact center work offshore reported
that they are satisfied with their offshoring initiatives.
* It's Not Easy Knowledge transfer (76%) and internal commitment
(76%) were identified as the major challenges in launching
offshore initiatives, which companies said need to be addressed
early on to ensure success. Many of the survey participants
recommended hiring outside services providers to help build
consensus and bring 'best practice' experience.
* Cost Isn't the Only Driver Companies cited cost savings (94%)
as the main goal of offshoring in 2003, followed by accessing
skilled resources (63%) and improving quality (51%).
* Program and Change Management are Keys to Success Most of the
companies surveyed (85%) believe that the establishment of a
Program Management Office (PMO) provides the foundation for
offshoring
success, with two-thirds (67%) stressing the importance of
proactive communications programs.
* 'Best Practice' Companies Prefer Global Sourcing to Offshoring Companies
with significant outsourcing experience have moved or are moving
toward a strategy of multiple locations, multiple vendors and a
judicious blend of both in-sourced and outsourced models to
minimize risks and maximize flexibility.
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