Honeymoon Over with Outsourcing?

eWeek recently published a study proclaiming that the outsourcing boom is over, as companies grow more savvy about working with outsourcing providers and look beyond the cost savings to the quality and timeliness of service they are receiving. This applies to both offshore and onshore outsourcing, as there is a growing wave of disappointment in performance and a flood of premature contract terminations.

There also seems to be a definite shift in outsourcing in favor of offshore versus onshore, as offshore providers increasingly pair high level certifications such as CMMI with their lower cost structures. Favorite offshore destinations seem to be Canada, China, and Eastern Europe.

At the same time, outsourcing seems to be morphing from a contracting strategy for distinct IT tasks to a corporate-wide strategy. U.S.-based outsourcing companies would do well to take heed of these facts and adjust strategy to ensure a strong focus on “underpromising and overdelivering.”