Estate agent Foxtons has slashed 40 per cent from its IT budget by outsourcing application development and support to India.

The company is making annual savings of between £400,000 and £500,000 by passing the services to LogicaCMG's offshore facility.

It is using that cash it has saved to increase the size of its in-house IT team, training them to focus on more strategic activities.

Bespoke Microsoft-based customer relationship management (CRM) and workflow applications were originally developed for Foxtons by LogicaCMG in the UK, and rolled out across the company's London offices in June last year.

But now ongoing development and support of the systems has been pushed offshore, freeing up Foxton's 25 IT staff to focus on systems integration, network support, system performance tuning and database management of core systems.

'We had a huge number of Logica developers on site,' said Foxtons IT director Tim Carter. 'It was expensive so we wanted to look at other options but wanted to retain ownership.'

Foxtons evaluated a number of offshore IT services companies in geographies including Russia and Eastern Europe before finally deciding to stick with LogicaCMG, but using their offshore facility in India.

A Foxtons-owned real estate company in the US had already used Indian IT services company Aspire Systems for small scale applications development.

'That was the spur. But it was a leap in the dark,' Carter said.

'The question people ask is how you manage the fear factor of outsourcing work offshore. We believe its about getting the best quality for our money and giving our IT people the opportunity to work on more exciting projects,' he said.

Carter says onsite visits to offshore facilities are an essential part of the evaluation process.

'It helps you understand the nature of the beast. I absolutely recommend it,' he said.

The cost savings have allowed Foxtons to restructure its inhouse systems integration team, channel and reinvest those savings in bringing up the skillset of the team.

'It's given us the ability to be much more focused on quality and we can be more reactive to requirements from the business.'