A survey of firms by ReThink Recruitment has revealed that 6% of
organisations plan to bring offshored IT work back to the UK over
the next year.
The
research
also shows that 75% of IT departments have no plans to offshore any
more IT work over the coming year only 19% of IT departments are
contemplating further offshoring.
ReThink said that strong evidence was emerging that the
offshoring rationale was beginning to unravel, as wage inflation in
overseas IT centres eroded cost savings, and quality control and
data security concerns became more important.
ReThink director Michael Bennett said, "For every three IT
directors thinking about sending work offshore, there is one
planning to repatriate jobs to the UK. That's quite a significant
number, and clearly shows that offshoring is no longer a one-way
street.
"A lot of organisations saw offshoring purely as a way to cut
costs, but spiralling wage inflation in offshore locations,
combined with the project management cost of co-ordinating teams
across international time zones, can eat into any cost savings.
"IT directors increasingly accept that the UK has other
competitive advantages which offshore destinations do not possess.
For example, it is usually much easier to resolve disputes with
outsourced suppliers in the UK than in emerging markets, where
legal systems can be far less effective."
ReThink said that when control over IT functions was handed over
to an outsourcing partner, rather than simply managed via an
offshore branch or subsidiary, the risks were significantly
greater.
Bennett said, "Many of the large UK banks that have made a
success of offshoring established their own operations overseas,
which are directly controlled from the UK. Handing over vital IT
functions to an independent third party entails significantly
greater risks."
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