Thursday, August 23, 2007

Strategy, Service Driving Fortune 500 IT Outsourcing Decisions

Reducing costs is no longer the only driving force behind companies offshoring critical IT functions. Today's top performing organizations rank user satisfaction, achieving return on investment goals, and increasing time spent on strategic work higher in determining what to outsource and who they work with.

The findings were highlights of a benchmark study entitled "Who Outsourced The Outsourcers?" by Aberdeen Group of Boston, a leading provider of research and market intelligence. Aberdeen surveyed key IT decision-makers at over 200 enterprises spanning industries, geographies and company sizes. This study was sponsored in part by Software Paradigms International (SPI), a global IT and business applications solution provider headquartered in Atlanta, Georgia.

Findings demonstrate that Best in Class companies that achieve higher ROI develop effective communication procedures, partner with outsourcing providers which possess tailored skill sets, and maintain strong relationships with providers.

"Executives at large companies are developing sophisticated offshoring initiatives, looking for skilled providers with complex capabilities," said Ralph Rodriguez, Research Director, Technology Markets, Aberdeen. "They need providers with true consultative skills and the ability to be an innovative and strategic part of the global development team, not just lowest cost handlers of client requirements."

Increasingly, Fortune 500 companies look at multiple offshore IT outsourcing markets due to pressures beyond lowering costs. These include the need to focus more on strategic work, quicker project turnarounds, demands of 24/7 operations, and growing global competitiveness, notes the report.

"Tomorrow's market leaders are developing increasingly sophisticated offshoring initiatives, partnering with skilled providers offering innovative and strategic contributions to the process, true consultative skills and flawless project management capabilities," noted Sid Mookerji, CEO of Software Paradigms International ( "The stakes are higher, the competition more pronounced, and the requirements of today's customers greater than ever. Organizations which are not CMMi Level 5, ISO 9001:2000 and offering experienced Six Sigma Black Belt certified project managers as SPI does, are finding themselves squeezed out of the consideration set by customers."

"Best in Class performers receiving the most value from their outsourcing relationships place a high degree of importance on communication and relationship management with their service provider. They have carefully researched the global environment to find providers with critical skill-sets such as agile development methods, necessary CMMi certifications, and deep domain expertise," said Carl Chinoy, SPI's Chief Operating Officer.