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Offshore outsourcing suppliers ‘worse’ at delivering projects on time

John-Paul Kamath

Offshore IT outsourcing suppliers have been ranked worse than larger inshore ones when it comes to delivering projects on time.

A Forrester IT services survey of European IT decision-makers found that 46% of respondents believed offshore outsourcers were worse at project delivery, compared with only 23% who said they felt inshore providers were better.

 The survey also revealed that users found offshore providers lacking industry-specific and domain expertise when handling their requirements and that the value for money they offered was negligible.

“Renegotiating with outsourcing suppliers and strengthening supplier management capabilities was ranked top of our respondents’ agendas,” said Sonoko Takahashi, associate analyst at Forrester Research.

Takahashi said that the sole focus on price had lead to some companies pursuing offshore strategies without even considering inshore possibilities.  

Forrester said it knew of an example in the automotive industry where the service provider for application management was selected on price “only,” under procurement pressure.  

“IT outsourcing is primarily about relationships between people.To increase client satisfaction, offshore suppliers need to put more effort in to maintaining a relationship and a key part of this is building more flexibility into contracts from the start,” said Takahashi.

Outsourcing: the expert view >>

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