Is the allure of work done overseas fading? Or is it as viable as ever? I can't reconcile conflicting reports.
I got an e-mail today from a PR person suggesting a few "Hot IT Topics For 2008." The e-mail was an inducement to talk with analysts at a consulting firm by the name of Lab49, which the PR person was representing. One of the "hot" IT topics suggested for discussion was this:
The end of offshoring: As costs rise in offshore locations and firms are seeing projects fail, much of the gusto for offshore is fading.
* New thing is rightsourcing, using high-quality onsite resources where possible.
I don't know about that "rightsourcing" thing, but the strongly stated thesis of the pitch made me scratch my head. My colleague Mary Hayes Weier recently wrote a feature story about the viability of offshore outsourcing 10 years after it first made an impact on domestic businesses, and in that article she made this point:
Two-thirds of companies on the InformationWeek 500 list of business technology innovators say they do offshore IT outsourcing, up from 43% in 2004. Consulting firm NeoIT estimates that 75% of the world's 2,000 largest companies are engaged in offshore outsourcing, with 20% of their IT budgets spent on offshore contracts; it predicts that could rise to as much as 40% of budgets in the coming years.
That sounds pretty viable to me.
However, the results of the most recent survey by the Society for Information Management of 130 CIOs and top IT execs would seem to contradict the thesis that offshore outsourcing is on the rise, and suggest that maybe "The end of offshore outsourcing" is a hot topic after all. Almost 60% of the SIM survey respondents said that less than 10% of their 2007 IT budgets had been allocated for outsourcing of any kind, and 73% said that no amount of their 2007 budgets -- 0% -- had been allocated for offshore outsourcing.
Unfortunately, there was no mention of budget resources allocated to "rightsourcing."
Last's year survey, according to SIM, pegged the average amount of 2006 IT budgets spent on offshore outsourcing at 4.23%; this year the average is 1.1%.
That's the opposite direction from viable.
I can't reconcile those results, at least not without further research. I need to speak with the consultants at Lab49, as well as those at NeoIT. Maybe I could hook up a conference call with those analysts, some people from SIM, and a few CIOs who either are or are not allocating X percent of funds from their IT budgets for offshore outsourcing.
And maybe somebody could explain that "rightsourcing" thing then, too.
Virtualization At The Desktop?
Examine how more than 250 companies plan to adopt server virtualization technology in this recent InformationWeek Research report, Server Virtualization.
The BI Explosion
Examine the business intelligence strategies of 500 companies, including deployment drivers and challenges, spending plans, and vendor selection, in this recent InformationWeek Research report.
Penryn's Got The Power For Wall Street Computing
A fascinating nugget hidden amid Intel's announcement of its 45-nm Penryn processors is just who really needs these powerful chips. Sure, PC gamers want the hot Core 2 Extreme QX9650. And enterprises everywhere more or less buy into the "better performance per watt" sell of the server-side Xeon Penryns. But the folks for whom this stuff is like silicon heroin -- they can?t live without it and they gotta have it now -- are the IT elite who run the data centers for the various stock exchanges.
Apple: More iPhone Features Coming
If you're disappointed by some of the features not found on the iPhone, time will cure your ills. According to comments made recently by an Apple spokesperson, the Cupertino firm plans to add more functionality over the coming months.
Nokia Goes After Multimedia Fanatics With N82
Boasting many of the same specs as the company's popular N95, Nokia brought forth its latest multimedia computer: The N82 (queue heavenly beams of light and angelic chorus). Its feature set is endless, but at $662 will American buyers bite?
A Dashboard For Well-Meaning Companies
StakeWare sells software that lets companies track their performance in areas such as environmental protection and human rights. Your company may be doing well financially, but is it doing good?
My Own Linux Distro: The Beginning
Here's a project I've been thinking about for a good long time, and which I've finally decided to get under way in public: I'd like to try and build my own custom Linux distribution.
Get Better Results from your IT investments In today’s environment, you need to get the most out of your assets and people … all the while serving the strategic needs of your business and dealing with growth and acquisition issues. In addition, it is critically important to quantify results of those investments for leadership and accurately track service level agreements.
ECM Finally Comes to the SMB Market: New Market Trends & Research Until recently, Enterprise Content Management (ECM) was an expensive technology reserved for large corporations – and large budgets. Join industry expert Dan Elam as he shares some new research for Kodak on the SMB market for ECM and provides insight and commentary about the findings.
Note: To change your E-mail address, please subscribe your new address and unsubscribe your old one.
Keep Getting This Newsletter
Don't let future editions of InformationWeek Daily go missing. Take a moment to add the newsletter's address to your anti-spam white list: InfoWeek@update.informationweek.com
If you're not sure how to do that, ask your administrator or ISP. Or check your anti-spam utility's documentation. Thanks.
InformationWeek Daily Newsletter
A free service of InformationWeek and the TechWeb Network.
Copyright (c) 2007 CMP Media LLC
600 Community Drive
Manhasset, N.Y. 11030
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.