Technology priority switch changes outsourcing strategy

By VAR_Staffing
In Channel
September 27, 2012

VAR_Staffing / VAR Staffing

With the rate at which technology is increasing, keeping up with the latest innovation can be difficult. Small and medium businesses (SMBs) that have minimal IT departments find themselves facing an even bigger challenge, as in-house tech professionals are already stretched thin. For many companies than means outsourcing, and according to a new survey, local options are becoming a greater likelihood.

The report – put out by technology research firm HfS Research – found that priorities have changed in what CIOs look for when they outsource. While keeping solutions stateside is undoubtedly more expensive, IT Principals are putting more stock into skills like innovation, communication and domain knowledge, which are more readily available domestically.

HfS research founder Phil Fersht was interviewed by CIO Magazine about the survey and why IT decision-makers are changing their point of view.

"From 2002 to 2008, it was all about getting as much to India as possible," Fersht said. "But we have smarter CIOs coming out of the recession who realize this is a long game. It's not all about offshore outsourcing. It's about building smarter global sourcing strategies."

There were 215 IT Principals surveyed for the September 2012 report and it was found that cost effectiveness is no longer weighed as heavily. Despite expecting to save 6 percent more by outsourcing overseas, the need for workforce experience, availability of talent and English-speaking, have CIOs looking stateside.

The study also found stark differences in the feeling of a few different areas. According to the responses, domestic arrangements outshined Indian counterparts in understanding U.S. culture and communication (78 percent versus 30 percent), business understanding and initiative (72 percent versus 37 percent) and innovation (71 percent versus 41 percent).

While saving money is always a priority for IT Principals, other factors are starting to change opinions. Local resources that can push innovation and better understand a company's goals can be more valuable than a cheaper option.

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