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Behind the Hype: Offshore Outsourcing

Product Type: Market Research Report
Published by: IDC
Published: September 2005
Product Code: R104-23948
Description

This IDC study researches the sentiments of Australian organisations towards offshore outsourcing and their intentions to procure services from offshore countries like India and the People's Republic of China (PRC) based on the results of a survey conducted across 200 organisations in Australia. The study also presents the expectations of these organisations in terms of cost savings and their preferences for countries and service providers.

"The concept of offshore outsourcing or global sourcing is gaining traction in the Australian market which is evident from the fact that the 200 organisations chosen from the BRW 1,000 list are planning to procure some services from offshore locations within the next 36 months. Legacy application maintenance is an area where the most opportunities are arising, due to shortage of skills and high cost of resources. The interest in offshore is also expanding from traditional IT services such as application development and maintenance to areas traditionally limited to being delivered locally. These services range from application and infrastructure management to IT consulting," says Aprajita Sharma, senior analyst for Outsourcing and BPO Research, IDC Australia.

Table of Contents
Table of Contents
IDC Opinion
In This Study
Methodology
Offshore-Nearshore Model Definitions
Offshore: Sourcing Versus Outsourcing
Offshore Versus Nearshore
Business Models
Figure: Sourcing Options
Situation Overview
Introduction
Survey Findings
Demographics of Respondents
Figure: Companies Headquartered in Australia
Figure: Australia Companies Knowledge of Offshore Outsourcing
Figure: Respondents' Role in Offshoring Decision
Figure: Respondents by Verticals
Offshore Outsourcing Market Dynamics
Respondents Leveraging Services from Offshore Locations
Figure: Leveraging Offshore/Nearshore Services for IT and Business Applications
Time Frames for Leveraging Offshore Services
Figure: Time Frame for Leveraging Offshore/Nearshore Services
Expectations of Cost Savings
Figure: Expected Cost Savings from Purchase of Offshore Services
Types of Offshore Delivery Model
Figure: Types of Offshore/Nearshore Model That Companies Leverage
Preference for Countries
Figure: Countries That Are Leveraging/Would Leverage Offshore IT Services
Criteria for Country Preference
Figure: Criteria That Influence Decision-Making Process
Expectations of Gains from Offshore Outsourcing Contracts
Figure: Expected Gains from Offshore/Nearshore Engagement
Top-of-Mind Awareness of Offshore Service Providers
Figure: Top-of-Mind Awareness of Offshore/Nearshore Service Providers
Future Outlook
Essential Guidance
Actions to Consider
Initial Due-Diligence
Setting Performance Goals
Identification of Resources
Project Qualification and Assessment
Defining Scope
Pricing Models and Financial Risk
For Business Function Outsourcing (Nonproject Driven)
For Application Development or Other Project-Driven Outsourcing
Additional Recommendations for Offshore Service Providers
Learn More
Related Research
Synopsis
Ordering and More Information
Price and Delivery Options



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