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IT offshoring savings declined for past 5 years

Stephanie Overby | Jan. 31, 2011
The average savings achieved by IT offshoring has declined for the past five years, even as companies expanded their offshore initiatives, Duke University's sixth annual corporate offshoring study found.

Lewin: It's important to point out that the vast majority of engineering work—86 percent, according to a study by [India's IT services trade group] NASSCOM and [consulting firm] Booz Allen Hamilton—is still done in the Western world.

But you have to watch for those small, initiating events. Those companies that let their engineers retire and didn't replace them are an early trend. What are all the factors that are going to drive innovation offshoring? I don't have a good answer for that. Different companies and different industries have different reasons.

It's all part of an emerging trend that we call the disassembly and reassembly of the organization. If you're the CIO, you're always in the hot seat because of the high cost of IT and because it is so highly visible at the level of C-suite. The CEO must be always questioning these costs. The pressure is always on. But there's still a lot to be done offshore. This is not the end of the story by any means.


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