SPI-Sponsored Aberdeen Research Documents Cost as Secondary Consideration

Reducing operational costs is no longer the only driving force behind companies, large and small, 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 functions to outsource and which global providers they work with.

The findings were among the highlights of a just released study by Aberdeen Group of Boston, Massachusetts, a leading provider of fact-based research and market intelligence, in a report entitled “Who Outsourced The Outsourcers?”. As part of the research process the Aberdeen Group surveyed key IT decision-makers at more than 200 enterprises spanning multiple industries, geographies and company sizes. This benchmark study was sponsored in part by Software Paradigms International (SPI), a global IT and business applications solution provider headquartered in Atlanta, Georgia.

The research findings demonstrate that Best in Class companies that are achieving higher ROI have developed effective, offshore communication procedures; have partnered with outsourcing providers which possess tailored skill sets; and most importantly maintain strong relationships with those providers. And while traditional outsourcing powerhouses in India remains a solid choice for outsourcing IT assignments, prudent organizations are also developing multiple alliances, with some placing engagements in China and Eastern Europe as well as India.

“Executives and CIO’s at large companies are now developing sophisticated offshoring initiatives, looking for highly skilled providers with the capabilities that enable complex outsourcing prowess,” said Ralph A. Rodriguez, Senior Vice President and Research Director, Technology Markets, Aberdeen. “They are in need of providers with the ability to be an innovative and strategic part of the global development team with true consultative skills, versus using just execution-style, “lowest cost” handling of client requirements.”

An increasing number of Fortune 500 companies are now looking at multiple offshore IT outsourcing markets due to diverse pressures other than merely lowering operating costs.

These pressures include the need for IT staffs to focus more on strategic work, the need for quicker turnaround in projects, the demands of 24/7 operations, and growing global competitiveness, notes the benchmark report.

“Today’s and tomorrow’s market leaders are developing increasingly sophisticated offshoring initiatives. They are partnering with highly skilled providers offering innovative and strategic contributions to the process, and true consultative skills and flawless project management capabilities versus just low cost handling of customer needs,” noted Sid Mookerji, CEO of participating sponsor Software Paradigms International (www.SPI.com). “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 rapidly finding themselves squeezed out of the consideration set by forward-thinking customers.”

The report also recommends that in order to realize higher ROI, enterprises should construct their offshore networks across different countries or with multiple outsourcing providers, while seeking operational and process improvements, knowledge of their software development lifecycle, and improving communication levels.

“The Best in Class performers receiving the most value from their outsourcing relationships – in terms of ROI, staff time spent on strategic work, and increases in user satisfaction – are those placing a high degree of importance on communication and relationship management with their outsource service provider. These Best in Class performers have carefully researched the global environment to find providers with the critical skill-sets such as agile development methods, having the necessary CMMi certifications; and deep expertise in their domains,” said Carl Chinoy, Chief Operating Officer of Software Paradigms International.

About Software Paradigms International, Inc.
Software Paradigms International, one of the sponsors of the study, is one of North America’s fastest growing, global IT and Business Process outsourcing companies. Headquartered in Atlanta, Georgia with operational campuses in Mysore, India, SPI serves North American clients in multiple industries with particular expertise in the Retail, Financial Services, Healthcare and Manufacturing space. For additional information, call (770) 874-2590 or visit www.spi.com.

About Aberdeen Group, a Harte-Hanks Company
Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to AberdeenTM for insights that drive decisions.