20 Jul 2009
Over a third of IT departments in the UK have offshored more than half of their operations over the last six months, according to research.
Some 79 per cent of the companies that opted for offshoring moved their IT functions to India, while 64 per cent of the 298 companies surveyed have shipped some of their IT set-up abroad.
Half of those polled by recruitment firm The IT Job Board said their companies were planning to offshore over the next six months, and 79 per cent of respondents said this would affect software developer jobs, followed by programmer roles (cited by 71 per cent) and IT support jobs (67 per cent).
When commenting on the business implications of offshoring, 83 per cent of respondents said that such decisions represent a negative impact on the quality of their IT. Some 40 per cent believed a “lack of business knowledge” is the main issue of offshoring and 76 per cent also felt the model presented “no long-term benefit to the economy”.
But a separate study suggests that accessibility to knowledge is the main driver for outsourcing – which could involve an offshore element – with 59 per cent of 100 UK IT leaders claiming the model allows them to tap into a skills pool that would be difficult to create in house.
The survey, published by Patni Computer Systems, says that confidence in the outsourcing model is gaining further strength due to more involvement from senior business executives in such decisions, as well as supplier innovation.
“Clearly the messages about the benefits that outsourcing can bring are getting out there and reaching the ears of other directors, not just the people in charge of technology,” said Brian Stones, European executive vice-president at Patni.
“The innovation and higher-value work outsourcing can bring is often critical to competitive success and it now falls to the outsourcing industry to highlight is successes in these cases,” he said.
“If we are going to continue to boost confidence in outsourcing, the delivery of innovation, be it new product, service or process is a great place to start.”
A reluctance to undertake capital expenditure and a 'necessary evil' attitude to technology remain endemic among many organisations. The resultant poor skills and a lack of senior level understanding of and commitment to IT is leaving businesses vulnerable to system failure and data compromise.
Many businesses are reluctant to, as they perceive it, relinquish control to a third party. But in reality these organisations currently have minimal control over IT; data is insecure, even if it is located within the organisation; operational performance is jeopardised by limited IT skills; and business change or expansion is compromised by the lack of IT expertise required to assess the merits of new technology opportunities.
Outsourcing IT allows an organisation to enjoy far greater control over its business processes. Working to a clearly defined service level agreement and contract, the contracted organisation will ensure networks and software are maintained to deliver continual high levels of performance. In reality, opting to outsource the IT function to a third party not only delivers far more control but it can significantly drive down costs by leveraging economies of scale and providing low cost access to a broad, experienced skills set.
By combining a business-led approach with up-to-date processes and policies that deliver far tighter IT management, a business can achieve good operational performance and a reduction in downtime that delivers quantifiable bottom line benefits whilst reducing overall IT costs and providing unprecedented levels of control.
Posted by: Richard Barker, Managing Director, Sovereign Business Integration 29 Jul 2009
Solution in three months.
No hits to the unemployed taxpayers.
No stock market crashes.
No foreign diplomatic issues.
No bailouts from the federal government vaults.
No bank runs.
No riots.
No bureaucracies.
See LINK to Information Technology Business Edge Magazine.
HOPE for solution of our national economic problem is in the READER?S COMMENT which follows. . .
http://www.itbusinessedge.com/cm/blogs/all/no-easy-answers-on-offshoring/?cs=30511
Posted by: Walter Nodelman 21 Jul 2009
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