Gartner Forecasts Enterprise IT Spending to Reach $2.7 Trillion in 2012

Despite the global economic uncertainty, Gartner analysts anticipate that the worldwide enterprise IT spending will experience a 3.9% increase next year reaching the total of $2.7 trillion. Enterprises will continue to invest heavily in their IT infrastructure seeing it as the major drive of business growth.

Peter Sondergaard, Senior Vice President at Gartner and Global Head of Research, underlines the importance of IT: “The days when IT was the passive observer of the world are over. Global politics and the global economy are being shaped by IT. […] For example, this year 350 companies will each invest more than $1 billion in IT. They are doing this because IT impacts their business performance.”

An increase in the IT services demand, consequently, means more projects for IT vendors, where especially outsourcing services are increasingly sought after. Gartner particularly notes, that emerging markets will continue to get closer attention in the coming years, in particular rising economies. According to Gartner’s estimations, the emerging economies will account for $1.013 trillion in 2012 of the global IT spending of nearly $3.7 trillion. Considerably in demand are ASM & infrastructure services, software testing, and offshore software development. Russia, Ukraine, Poland, and Belarus are currently most promising outsourcing spots luring more and more international customers from Western Europe and the US.

Source: Global Services

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Cloud Market to Reach $121 Billion in 2015

According to research data, the cloud services market has already surpassed $37.8 billion and is continuing to grow towards $121.1 billion in 2015.

The continual growth of the cloud market is absolute related to the explosive development of “end products”. It is expected that due to universal mobile device usage, the number of total internet users will increase to 10 billion in only another 10 years. With industry needs and each national government’s promotion, it can be said that cloud computing has truly entered its stage of growth.

IDC’s recent report further reaffirms the growth in the virtualization space. As per IDC, with shipments of virtualized servers growing at a compound annual growth rate (CAGR) of 14% from 2009 to 2014, it is expected that the robust growth in server virtualization will continue through 2014 as datacenter adoption is increasingly considered mainstream in mature economies and as organizations in emerging regions look for datacenter efficiencies. With datacenter consolidation, along with the rise of cloud computing, virtualization and virtual desktop infrastructure, more and more computing power and data itself are moving into virtual world.

The prospects of the cloud market are looking promising, attracting investment from many different sources, so at this time, everyone can acknowledge that using cloud computing will allow data transmission to become quicker and more easily managed.

Source: Global Services

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Collaborative Sourcing As a New Transformational Approach

Is outsourcing outdated? Yes, collaborative sourcing is currently on the rise.

Application collaborative sourcing is a delivery framework that provides ongoing development and maintenance of an enterprise's full application portfolio. The framework model provides a platform to drive innovation and focuses on time-to-value while introducing working collaborative practices to get critical business functionality into production at a fast rate.

A core theme of collaborative sourcing is improving the business's capability to compete on time. The collaborative sourcing argument is that if we wish to accelerate time-to-value, we need to measure factors of time at the lowest levels of granularity possible.

Collaborative sourcing accelerates time-to-value. Through a set of Web 2.0 technologies and an integrated set of processes, collaborative sourcing focuses on cycle time (elapsed time) and speed (hours vs estimate) as the principal metrics for measuring performance.

Staff behaviors are directed toward competitive, time-based outcomes when not only development methods, but also the talent model and recognition systems, are calibrated on time-based measures.

Collaborative sourcing is a true transformational approach to an enterprise's applications development and maintenance strategy. In addition to providing the mechanism to realize the benefits of global delivery and continue significant cost reductions, collaborative sourcing creates the engine to accelerate time-to-value. Rather than focusing almost exclusively on cost takeout, collaborative sourcing refocuses a CIO's capabilities and resources toward adding value to the business through accelerated time-to-value and outcomes-based measurement processes.

Source: Global Services

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Tips for Successful Re-sourcing of IT Deals (Part II)

In our today’s post we continue to give tips for successful re-sourcing of IT deals:

6. Prepare for People Problems. The outsourcing deal you signed may limit your right to solicit and re-hire provider personnel or make it difficult for the new provider's employees to shadow or conduct other knowledge transfer work with the incumbent's people, says Andrews of Thompson & Knight.

7. Select the Right Silo. "Towers where an incumbent outsource provider has included labor, hardware and software as part of the service offering will be much more complex to transition to another service provider than that same tower being provided under a labor-only model," says Pace Harmon's Martin.

8. Calculate the Cost of Disruption. There will be a price to pay for moving the work to a new provider so figure out what it is before first. "Do your homework," Lepeak says. "Understand the risks, costs and the level and nature of the likely disruption, and weigh that against the benefits of the transition."

9. Master Multisourcing. Most of today's resourcing work involves a partial transfer of outsourced functions resulting in a multi-provider environment, says Andrews. Coordinating multiple providers takes time and effort. Andrews advises that new contracts address some of those challenges including cooperation among providers, customer consent and approval requirements, and common access or usage rights to software or other proprietary materials.

10. Make it Easier on Yourself Next Time. You've consulted the contract, calculated the costs, and made the decision to recomplete. When it comes time to sign on the dotted line with the new provider, apply what you've learned. "The outcome of a re-sourcing often depends on leverage," says Andrews. "Make sure you have some in the new contract."

Source: CIO

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Tips for Successful Re-sourcing of IT Deals (Part I)

Re-sourcing might seem a complicated process at first sight for most IT services customers, although it is not, unless you follow the expert advice provided by the best outsourcing consultants and outsourcing experts that we highlight in today’s post.

Re-sourcing – the process also known as "recompeting" a deal – means switching outsourcing providers or bringing work back in-house, and it’s quite a usual practice in business world, and businesses shouldn’t be afraid to switch providers if they feel unsatisfied with their current services.

A successful transition from one vendor to another requires cooperation between the two, and both sides should consider the following tips in order to succeed at the recompete:

1. Go Back In Time. "Remember why you outsourced in the first place," says Edward J. Hansen, partner in law firm Baker & McKenzie. "If the reasons to outsource are still relevant, then you should consider changing providers rather than abandoning the strategy."

2. Consider The Deal Lifecycle. "Contractually it is often easier – though not easy – to shift work from one provider to another at the end of a contract term rather than in mid-term when various penalties may be incurred," says Stan Lepeak, Director of Research in KPMG's Shared Services and Outsourcing Advisory group.

3. Consult Your Contract. "Your contract could include exclusivity provisions, minimum spend commitments, or rights of first offer or first refusal for the provider that contractually limit or prohibit resourcing," says Steve Martin, partner in outsourcing consultancy Pace Harmon.

4. Question Your Motivations. "I recommend spending the time to determine what is motivating the customer to pursue this path, and whether it may be possible to make the current relationship work," says Hansen of Baker & McKenzie. "It may be possible to reset the relationship, renegotiate the contract and avoid the operational risk of moving."

5. Question Your Outsourcer's Motivations. "If the service is bad, it may be an indication of an unprofitable deal for the supplier and they may be motivated to move away from it," Hansen says. "On the other hand, if you can have a good honest conversation about this, you may be able to renegotiate the deal and leave the services where they currently sit."

To be continued...

Source: CIO

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Success Drivers in an Outsourcing Relationship

Managing a long-term outsourcing relationship is no easy task and establishing an outsourcing relationship that is both efficient and mutually beneficial may sometimes seem unattainable. Missed deadlines, fixed expenses, work or finished products that don't meet expectations are just a few of the problems that business owners can imagine when they think of outsourcing IT services to an independent contractor. Is that how many of you think of outsourcing? The answer is “no”, if you just take note of the following tips for how to get an outsourcing relationship on the right track.

In order to minimize problems and get better results from outsourced IT projects, here are four things you should do to make the outsourcing relationship work for you:

• Identify which tasks are appropriate to outsource. Make a list of tasks that are routinely performed by you and your employees. Review the list to see which activities might be outsourced: tasks that make good candidates for outsourcing include activities you or your key personnel are doing that are routine and repetitive and taking time away from more important work and tasks that you and your staff don't really have the expertise to do, but aren't needed on a regular basis.

• Systematize repetitive tasks. To get good results when a repetitive task is outsourced, you need to be able to provide the contractor with details about how the work should be done. Take the time to write down the steps you take to complete the work you want done, including enough detail about the steps that need to be completed, methods to be used, recordkeeping that needs to be done, etc. so that a contractor can perform the work the way it would be done in your company.

• Research needs for projects that are beyond your area of expertise before you outsource the work. You won't be able to choose the right contractor for a job and the contractor won't be able to meet your expectations if your expectations aren't reasonable and clear up front. What do you want done? What's your budget? What results do you expect? How do you want the results achieved? What's the time line? What deliverables will you require? Make sure you have clear answers to these questions before the tasks are outsourced.

• Locate and get to know companies and people you might want to use – ahead of time. Check out their websites, check their references, and where appropriate, give them small jobs first. If those are completed satisfactorily, then assign the contractor bigger or more important tasks.

Source: NASDAQ

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EquaTerra Takes the Pulse of European Outsourcing Market

EquaTerra, a global sourcing advisory firm with expertise in information technology (IT), finance, human resources and other business processes, has conducted research for Computer Weekly readers that analyses the market and trends for IT outsourcing in Western Europe. The report is taken from EquaTerra's global business and information technology pulse survey, a quarterly survey of leading outsourcing service providers and EquaTerra’s own client-facing advisors.

Some of the findings of the report are:

Demand growth for BPO and ITO slips slightly in 2Q10. Inherent outsourcing demand remains positive and is growing overall but still many buyers remain cautious in their efforts, especially what concerns upfront investments and complex deal arrangements.

Significant challenges for the providers are improving existing contract profitability and expanding scope with existing clients. Demand for non-outsourcing services like consulting and packaged software services is still weak. Providers cite long-term opportunities to make money from buyers’ cloud computing initiatives but it is unclear which providers will benefit the most and how much these new revenue streams will offset declining traditional systems integration work and potentially the loss of some traditional outsourcing business.

Buyers continue their efforts to reduce operating costs and overhaul service delivery models, with internal process improvement and alternative delivery models like shared services gaining in importance as change agents. Interest in cloud-based services such as SaaS is gaining traction.

The use of multi-sourcing or multiple outsourcing service providers in adjacent and complementary functional areas continues to grow. The growth of cloud computing opportunities to complement, extend, and in some cases supplant traditional outsourcing will further drive more multi-sourcing, at least in the short to medium term, as new service providers come to market.

Source: ComputerWeekly

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In-House or Outsourced IT Infrastructure?

According to a new research, commissioned by Savvis Inc., a provider of cloud infrastructure and hosted IT solutions for enterprises, the number of companies that outsource their IT infrastructure is expected to increase drastically from 17 percent today to 64 percent in 2020. This independent survey was conducted by Vanson Bourne, a research-based technology marketing consultancy.

The research firm surveyed more than 600 IT and business decision makers from mid to large enterprises and public sector organizations based in the United States, United Kingdom and Singapore.

Sixty-one percent of respondents believe managing IT in-house provides no competitive advantage and has to stop.

"With the rise in acceptance of outsourcing within the IT industry, and the related economies of scale that accompany the managed services model, businesses are finding it difficult to justify owning their own IT infrastructures," said Bryan Doerr, chief technology officer at Savvis, Inc.

It was also revealed that the UK will see the biggest shift from in-house IT infrastructure to outsourcing, falling from 90 percent today to 23 percent in 2020, the USA from 82 percent to 49 percent and Singapore from 62 percent to 38 percent.

In looking at 2010, organizations cited cost savings (58 percent) and growing revenue (54 percent) as their top strategic priorities. The biggest issue organizations face concerns doing more with less budget (54 percent).

Source: Savvis, Inc.

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$50 Billion Saved Through Sourcing

According to a survey conducted by TPI, the leading global sourcing advisory firm, companies have reduced their spend on IT services and business transformation by almost one fifth by turning to outsourcers, thus saving $50 bn.

The firm surveyed 120 companies it had advised on sourcing over the last five years. TPI found its clients saved on average more than 33 per cent. After one-time and ongoing management expenses, the savings averaged more than 17 per cent.

According to TPI chairman and CEO Michael Connors the majority of businesses, 60 per cent, said that reducing costs was "their number one reason for implementing sourcing strategies".

Last year Europe became the world's highest spender on outsourcing, with companies based in Europe spending more on IT outsourcing than those based in any other region of the world.

Source: TPI

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Software R&D globalization

Zinnov, meaning Zeal in Innovation, the leading management consulting company, has recently provided a study - “Software R&D and Globalization Insights”. The scope of the study is to conduct a global software R&D spend analysis across a group of software product companies. To gain insights on the topic multiple stakeholders such as Vice Presidents, Senior Directors, General Managers, were interviewed.

Some of the findings of the survey are:

• The impact of the economic uncertainty was visible on R&D budgets as companies planned to optimize on the investments over the last 12 months. Some of the small to midsized companies (less than USD 1 bn in revenue) have been able to keep the R&D investments low, as they offshore a significant portion of their R&D to low cost destinations such as India and China. For larger companies, most of the R&D investments (about 80%) are kept in the US.

• Most large companies are now looking towards keeping R&D budgets flat while increasing their investment on new products. This has led companies to invest more on new development related activities in the product development life cycle. As a result, the quality of talent has become critical and companies are now laying emphasis on hiring talent so as to maintain effective staffing ratio. The focus on quality mandates increased investments on R&D related workforce for a majority of companies.

• More development and QA/testing related work is expected to be sent to offshore locations hence reducing the total investment on mature products

• Most large companies are now looking towards maximized value, rather than a pure cost arbitrage in terms of their relationships with product development service providers. However, the percentage of outsourced projects is still pretty low meaning there’s a bright future awaiting outsourced product development (OPD) industry.


Source: Zinnov

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Vertical IT Spending to Go Upwards

According to a new report from IT research and advisory firm Gartner, IT spending across all industry markets is forecast to exceed $2.4 trillion in 2010, an increase of 4.1% compared to same period last year, with banking and financial industries leading the way. Government agencies and health care providers are also expected to boost their IT this year.

The report says that IT spending by banking and financial industries will grow by 4.6% to $396.9bn in 2010, while total IT spending by communications media and services market is expected to reach $394.2bn, marking a 4.4% increase from the previous year. National and international government will show the strongest growth in 2010, with an increase of 6.2% in IT spending. Manufacturing and natural resources, and wholesale trade will experience the weakest growth through 2014, growing at 2009-2014 CAGRs of 3.0% and 3.1%, respectively.

"2010 will see IT spending in all major industries returning to growth, although that growth will vary by individual sector", Gartner analyst Kenneth Brant said.

Source: CBRonline.com

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European IT Services Market Growth

According to a recent report provided by the International Data Corporation (IDC), the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets, demand for IT services is anticipated to grow by 2.2 per cent for the year 2011, with IT outsourcing being the main driver behind this.

The study shows that IT budgets have stabilized along with the easing of economic conditions, resulting in some companies to slowly start increasing spend again. Laura Converso, research manager, IDC European Software and Services, said: "Demand for outsourcing will pick up towards the second half of 2010."

She also added that the need for IT services will be most prominent this year in the UK, Germany and the Nordics.


Source: ihotdesk

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Outsourcing Potential 2010 – How Does It Look Like? (Part 3)

Gartner, among its altogether 250 predictions, this year makes emphasis on the themes of shifting ownership and revenue flows. As the macro-economic environment adjusts to a new balance between supply, consumer demand and regulation, the focus of this year's top predictions has expanded to encompass shifts in the way that users interact with IT. "As organizations make plans to navigate the economic recovery and prepare for the return to growth, our predictions for 2010 focus on the impact of critical changes in the balance of control and power in IT," said Brian Gammage, Vice President and research fellow at Gartner. "With greater financial and regulatory oversight for all IT investment decisions, few organizations will be unaffected." Although most organizations enter 2010 preparing for a return to growth, financial oversight is unlikely to be lifted anytime soon with CFOs overtaking a more active role.

Although most analysts agree that the year to come brings optimism to the software industry, let’s not make it all milk and honey. Despite the omnipresent upbeat tone of these predictions, the IAOP warns that global economic uncertainty and currency fluctuations still remain and may not be disregarded. According to the analyst house, this is predicted to lead to increasing levels of mergers and acquisitions, which will in turn “drive higher value services and continue to put pressure on other players to be more strategic in their offerings”, says Jagdish Dalal, IAOP’s managing director of thought leadership.

All in all, IT decision makers enter the new decade with hope on the horizon and leave behind one of the most difficult years in memory. According to a report by information and communications technology research and advisory firm XMG Global, “outsourcing will present its full potential once more in 2010.”

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Outsourcing Potential 2010 – How Does It Look Like? (Part 1)

In the passing tough year best remembered for crisis, loss of jobs, and overall uncertainty, the outsourcing industry has made many gloomy headlines in the news resources. Interesting enough to note that the end of the year brings forecasts for the IT community as optimistic as long not heard. After the brutal 2009, we’re glad to receive some encouraging news again. With the leading and most trusted Forrester and Gartner at the front of the line, most other analyst houses and industry associations including IDC, IAOP, NOA echo with optimistic releases. Rejoice, IT! We’ve made it through!

The Forrester’s loud statement “Tech downturn officially over” gave way to numerous sequential prognostications the quintessence of which sounds as follows: IT spending is set to grow in the coming year. Below we’ve summarized the key findings from leading analyst firms with most significant predictions and relevant figures for 2010.

The analyst guru Forrester predicts that spending in the IT industry will rise 8.1% to more than $1.6 trillion, driven by an improvement in the wider economic situation and a new cycle of tech innovation and growth. “2010 will be a much better year. […] We’re not talking boom yet, so we are not predicting double-digit growth rates across the tech market,” said the Forrester report’s author Andrew Bartels. “But, as our latest tech market report shows we do think there will be a solid tech recovery in 2010, with growth rates in the high single digits.”

Bartels also said that he expects big businesses will lead the IT spending, rather than SMBs. “For large corporations, the financial crisis is mostly over – they can tap the corporate bond, commercial paper, and equity markets as they did before. But SMBs depend on banks for financing, and banks are still making it hard to borrow.”

Forrester is expecting that spending on computer hardware and software will lead the way in 2010, with hardware spending up 8.2 percent and software spending up 9.7 percent. Communications equipment makers will see an increase in spending of 7.6 percent, IT consulting and system integration services will rise by 6.8 percent, and outsourcing services will exhibit 7.1 percent growth.

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Becoming a Preferred Outsourcing Destination

New sourcing destinations which form regional clusters are springing up all over the globe quite often now. Companies looking for alternative to India locations have a wide choice of virtually any sourcing region to do business. And countries within these clusters face the challenge of becoming a preferred sourcing location.

Here are some of the key success strategies for winning destinations:

- focus on establishing favorable tax and regulatory environments, implementing government incentives, investing in high quality infrastructure, reducing attrition, and facilitating access to a qualified workforce;

- learn from the experience of established destinations noting the policies, incentives and initiatives these former emerging locations undertook to achieve success;

- ensure a sustainable supply of qualified labor. Countries should have a workforce strategy to continue to scale as well as diversify their skills sets;

- find your niche. As the playing field becomes more competitive, it’s necessary for countries to differentiate not only on the basis of cost, quality etc. but also in terms of the depth, specialization and expertise of their workforce;

- let the world know about you. Ensuring global visibility — especially in prime markets such as US and Europe — should be top priority. Branding that accentuates the region’s uniqueness can have a great impact;

- encourage import of expert resources from established locations and target markets, especially if there are ex-pat’s who can be convinced to return home. Inviting well-known industry evangelists (read consultants, analysts, etc) is also very effective in building goodwill and positive buzz;

- promote benefits of outsourcing industry within the local market. This can be done by convincing domestic or multinational firms to outsource locally or “carve out“their internal operations. Local service providers can be incentivized to build a domestic market.

Source: Global Services

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ICT Sector as a Tool for Overcoming Crisis

Recently RUSSOFT Association and Brazilian Association of Information and Communication Technology Companies (BRASSCOM) held a video conference "BRIC IT-Initiative". IT community members from New-York, Hong-Kong and Saint Petersburg discussed the importance of joint efforts of BRIC countries aimed at the development of ICT sector as a tool for overcoming crisis and its consequences, as well as for building the New Economy based on knowledge and innovations.

In the course of the conference the text of the appeal to the governments of BRIC countries to develop the IT sector and to support international cooperation between these countries in the ICT field was approved. This appeal was also approved by the China Council for International Investment Promotion (CCIIP).

One of the speakers of the conference, Valentin Makarov, President of RUSSOFT, said: "The opportunity created by IT has to be seen by the national authorities and decision makers as a priority and tools for both - recovery from the crisis and creation of New Economy based on Knowledge and Innovations. This is especially true for the BRIC countries, once the emerging economies need a broad support from the Government in order to intensify the implementation of IT into their respective countries and to expand their competitiveness in the global market".

Another speaker, Wolfgang Petersen, EMEA SSG Director of Intel, noted: "….the other thing that is definitely worth for investing resources is software development. We see a strong raising opportunity in the software development area for BRIC countries which are the source forge for the world."

Source: RUSSOFT

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Upturn in IT Business, Forrester Predicts

The analyst firm Forrester Research forecasts growing budgets and overall upturn in the IT business staring from the next quarter.

Andrew Bartels, analyst at Forrester and author of the report, inspires the industry vendors with optimism and gives an encouraging outlook for the approaching quarter. The report "US and Global IT Outlook: Q3 2009" speculates that the bottom of the IT tech market happened in the first and second quarters of this year. Analysis of that market is based on the sales of computers and peripheral equipment, communications equipment, software, IT consulting services, and IT outsourcing services.

The report further provides detailed branch statistics. Summarized, it reads as follows:

· the use of IT consulting services will increase by 11.7 percent in 2010;
· software purchases will be up by 9.3 percent;
· computer equipment sales will increase by 8.3 percent and communications equipment sales will show a bump at 3.6 percent;
· outsourcing will rise by 4.5 percent in 2010.

Bartels predicts that enterprise businesses will be the first to reinvest in IT and lead the revival of the tech boom.

Source: Redmond Developer News

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Agile Outsourcing: Taking the Lead!

Agile methodologies such as agile software development and continuous process improvement are considered more suitable for software development outsourcing than traditional ones. Now they are seen as critical factors for software projects success and customer satisfaction. Why is it so? Let’s see.

Methodology Fit. For any outsourcing or offshoring company, agile methodologies are more suitable than traditional ones. Agile software development and continuous process improvement offer the chance to make fine adjustments continuously on both sides to accommodate for these differences. Traditional methodologies in software development will almost always lead to fixed price contracts since the buyers of those services will insist upon it.

Bridging Communication Gaps. Even apart from the differences in language between the United States and India or the United States and the Philippines, imagine the differences in time zones, culture and work habits. Agile software development ensures that frequent releases bridge these communication gaps quickly.

Perfection Is an Iterative Process. When two disparate organizations work together, success can be achieved only iteratively with as many feedback loops as you can design into the effort as possible. Agile software development and continuous process improvement offer both buyers and sellers of outsourcing services the opportunity to achieve perfection iteratively.

Building Expertise. Service providers can move to using agile software development methodologies or billing customers on a transaction basis only if the sellers of these services aren't just executing a project or process but building expertise in that area.

Responsiveness to Change. Software requirements change over time. Business processes are evolving everyday due to competitive pressures as well as changes in the law. Agile methodologies are needed in outsourced software development to keep the development effort synchronized with changes in requirements.

Building Longer Term Partnerships. Building a partnership with your software development service provider makes it easier and better the next time you have another major software development effort come up.

Building Quality. Agile methodologies achieve something that is counterintuitive at first glance. You build things faster, but by doing so, you ensure better quality. Agile methodologies address serious problems in ways humans communicate. They do this by allowing faster and quicker feedback cycles so that course corrections are made as soon as possible.


Source: Global Services

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The OI’s Founder Comments on Outsourcing Transformations

Today, outsourcing is a widely used practice for organizations striving to improve their productivity and reduce costs. Having left doubts “if we should do it at all?” in the past, now they have to choose from a wide range of outsourcing destinations that exist and keep appearing on the global market to understand where their outsourcing best match is located.

Frank Casale, CEO and chairman of the Outsourcing Institute, gave an interview where he commented on how outsourcing has changed since its early days, and the factors that should be considered when outsourcing offshore.

In the early 90s most of the outsourcing was big deals with big companies that were in big trouble. And it was mostly U.S. Nowadays there are tons of outsourcing being done in the mid market and smaller firms.

Moreover, as Mr. Casale notes, there is a certain shift to back end of the transaction and even post contract signing. “Managers are realizing that the work begins after the contract is signed and it’s really all about governance and relationship management”, he says.

When companies have already decided to outsource, they have another challenge to face - where to outsource and whether to go offshore or not? Here are some tips suggested by the OI’s chairman.

- Bring in an advisor or just be very active within whatever networks you participate; another option is to do some research. “This will give you a sense of where you can find high value, high cost savings, and low risk options,” Mr Casale says.

- When choosing an offshore destination it’s necessary to determine the factors that are crucial for you and then to weight those factors: time zones, cultural compatibility, language, cost. You no longer have to go necessarily to India - there are alternatives like Eastern Europe or Latin America. Not only do you have cost savings there, but its closer proximity, less of a time zone issue, and a place more people are attracted to going every couple of months on a site visit.

- Don’t “put your eggs all in one basket. Most organizations are doing some things in India, some things in South America, and some things onshore”. If something goes wrong with one of your providers, then you have some other to rely on.


Source: blog.devongroup.com

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IT Outsourcing during Recession Time

IT outsourcing providers are likely to grow their business in the economic slowdown, researchers have claimed. Analysis of US Department of Commerce data by Forrester Research found that the IT budgets of North American and European businesses are expected to increase by three per cent. Chief information officers are expected to focus on improving efficiency and helping to cut costs by increasing productivity, the report said.

"Sellers of communications equipment, software, and IT consulting and outsourcing services will see one or two quarters of declining revenues, but on average will still grow modestly in 2009," said Andrew Bartels, vice president at Forrester.

IT outsourcing firms are predicted to benefit from companies looking to reduce costs. "Whenever there's a downturn people outsource more, not less," says Gartner analyst Linda Cohen. "Organizations want to take costs out wherever they can. CFOs are pounding on their CIOs to just outsource it, just offshore it."

Source: ihotdesk

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