Application Outsourcers Look Beyond Cost Savings, Says AberdeenGroup
Most companies outsource at least some of their application development or maintenance functions, but saving money is not the prime motivator behind these outsourcing strategies.
Nov 13, 2006
Most companies outsource at least some of their application development or maintenance functions, but saving money is not the prime motivator behind these outsourcing strategies, according to the findings from an Aberdeen Group benchmark study underwritten by IBM, Softtek, and Unisys. In addition, research found a strong preference for service providers located within the outsourcer's time zone.
"While cost savings remain an important cornerstone of many IT outsourcing strategies, most companies, especially in the mid-market, look at outsourcing application work to boost the skills of their internal IT staffs and allow them to tackle more strategic work," said Rick Saia, Aberdeen’s Research Analyst for IT services.
Although India has become a popular destination for application development outsourcing work, companies in other nations are ramping up their IT capabilities, affording more options in choosing providers. "This allows companies more 'near shore' options as opposed to looking to the other side of the world," said Saia. "Many large providers recognize this, though, and are looking to perform more work in other countries or at least partner with native firms that can provide these services."
The study found that companies that are best at outsourcing application development and maintenance save more than twice the industry average in application-related costs. They also experience close to 50% higher user satisfaction and - on average - a 67% increase in projects delivered on time and within budget.
AberdeenGroup's report, "Outsourcing Application Development and Maintenance", is underwritten by the following companies: IBM, Softtek, and Unisys.
"While cost savings remain an important cornerstone of many IT outsourcing strategies, most companies, especially in the mid-market, look at outsourcing application work to boost the skills of their internal IT staffs and allow them to tackle more strategic work," said Rick Saia, Aberdeen’s Research Analyst for IT services.
Although India has become a popular destination for application development outsourcing work, companies in other nations are ramping up their IT capabilities, affording more options in choosing providers. "This allows companies more 'near shore' options as opposed to looking to the other side of the world," said Saia. "Many large providers recognize this, though, and are looking to perform more work in other countries or at least partner with native firms that can provide these services."
The study found that companies that are best at outsourcing application development and maintenance save more than twice the industry average in application-related costs. They also experience close to 50% higher user satisfaction and - on average - a 67% increase in projects delivered on time and within budget.
AberdeenGroup's report, "Outsourcing Application Development and Maintenance", is underwritten by the following companies: IBM, Softtek, and Unisys.