Firms outsourcing IT development work are increasingly motivated by the desire to save cash rather than the wish to utilise service providers' specialist skills, according to a report from analyst firm Evans Data.
Experts said this was the latest in a line of reports suggesting that firms are growing more sceptical about outsourcing's ability to consistently improve service quality.
Evans Data surveyed 400 software developers at large enterprises and found just 19 percent of respondents outsourced development work to utilise specialist expertise, down from 44 percent five years ago. In contrast, 28 percent cited cost savings as the main reason for outsourcing, compared with 15 percent in 2000.
John Andrews of Evans Data said the shift was due to many service providers failing to deliver promised improvements in productivity. The failures were caused by the inadequate resources allocated by service providers and their customers to manage outsourcing projects, he added.
The report also noted that companies now tend to outsource "lower-level programming tasks", and that while a third of respondents plan to increase their use of outsourcing, 45 percent hand less than a quarter of development work to third parties.
The report comes a week after the publication of a survey by management consultancy Compass, which questioned 8,000 firms and found 58 percent of IT and business process outsourcing (BPO) projects failed to meet expectations.
Andy Chesnutt of Compass said the high proportion of failed projects was due to poor partnership management between firms and their service providers.
"Many companies fail to realise you need different skills to manage an outsourcing alliance rather than an internal IT department," Chesnutt added.
Separately, India's National Association of Software and Services Companies (Nasscom) in August sought to re-establish confidence in Indian BPO providers following a some high-profile security breaches by launching a BPO certification pilot programme. The Nasscom Assessment of Competence certification scheme will test 15,000 graduates' listening skills, spoken English and IT capabilities.
Experts said this was the latest in a line of reports suggesting that firms are growing more sceptical about outsourcing's ability to consistently improve service quality.
Evans Data surveyed 400 software developers at large enterprises and found just 19 percent of respondents outsourced development work to utilise specialist expertise, down from 44 percent five years ago. In contrast, 28 percent cited cost savings as the main reason for outsourcing, compared with 15 percent in 2000.
John Andrews of Evans Data said the shift was due to many service providers failing to deliver promised improvements in productivity. The failures were caused by the inadequate resources allocated by service providers and their customers to manage outsourcing projects, he added.
The report also noted that companies now tend to outsource "lower-level programming tasks", and that while a third of respondents plan to increase their use of outsourcing, 45 percent hand less than a quarter of development work to third parties.
The report comes a week after the publication of a survey by management consultancy Compass, which questioned 8,000 firms and found 58 percent of IT and business process outsourcing (BPO) projects failed to meet expectations.
Andy Chesnutt of Compass said the high proportion of failed projects was due to poor partnership management between firms and their service providers.
"Many companies fail to realise you need different skills to manage an outsourcing alliance rather than an internal IT department," Chesnutt added.
Separately, India's National Association of Software and Services Companies (Nasscom) in August sought to re-establish confidence in Indian BPO providers following a some high-profile security breaches by launching a BPO certification pilot programme. The Nasscom Assessment of Competence certification scheme will test 15,000 graduates' listening skills, spoken English and IT capabilities.
No comments:
Post a Comment