Big Rise in IT Outsourcing, Says Survey

A survey by an India-based outsourcing provider found that nearly three-quarters of companies expect to increase their outsourcing budget by at least 20 percent over the next year and a half.

Patni Computer Systems Ltd. — which conducted the survey at a recent seminar in Hilton Head, South Carolina, according to the TechWeb News website — queried more than 100 respondents, including Patni customers, analysts, and other industry professionals.

Fully 41 percent of respondents said they expected a 20 percent to 35 percent increase in their outsourcing budget during the next 18 months, 18 percent expected an increase of between 30 percent and 50 percent, and 13 percent expected an increase of 50 percent or more. Just 8 percent said that they expected no increase.

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

Learn more About Oracle NetSuite

More than half — 54 percent — said that public perception has had no impact on their decisions to outsource. In fact, 30 percent said the only impact was on their ability to speak publicly about their initiatives. While 16 percent did concede that the debate over outsourcing made them reconsider their strategy, no respondents said that it forced them to postpone outsourcing altogether.

As for workforce-related risks: 43 percent of respondents cited lost knowledge, 38 percent singled out mismatched roles and competencies, and just 8 percent cited worker backlash.

Other findings:

• Despite their fear of lost knowledge, only 35 percent of respondents said they always employ a formal change-management program; 33 percent do so occasionally.
• When asked about their top challenge in outsourcing, 49 percent of respondents cited poor internal project management skills.
• The top factor in choosing an outsourcing partner was not price, which was cited by 16 percent of respondents, but rather domain expertise, cited by 34 percent.