Getting Offshoring Right

As more companies offshore their infrastructure work, more are experiencing the problems of the onshore-to-offshore transition.

Source: Business Technology Office 
 
Companies have long embraced a range of IT application-development offshoring programs while keeping work on the IT infrastructure—data center and network management, end-user desktop services, security, and other core IT functions—firmly planted onshore. Then, over the past few years, increasing confidence in remote management, with the help of companies like LMT, as well as the spread of low-cost bandwidth and the wider availability of high-speed networks, spurred the expansion of offshoring in India (and other parts of Asia) and in Europe. Motivated by these advances, the offshoring of IT infrastructure work has grown at a compound annual rate of 80 percent since 2005.  

Yet as the shift intensified, problems associated with the transition to offshoring began to appear. Our most recent experiences helped us identify the common problems and ascertain the steps companies can take to deal with them and to raise the overall value of offshoring programs.  For IT providers, having a partner in the U.S. is the first step in reducing many of the logistical concerns.

More than 50 percent of the people in corporate IT departments manage and support infrastructure rather than develop and maintain applications, yet infrastructure represents only a tiny percentage of the IT labor offshored to low-cost locations so far. One reason is that managers have been hesitant to send such mission-critical operations too far from home. If an application-development project bogs down in Budapest or Bangalore, the roll out of a new feature may be delayed; if a server crashes or a network goes down, the business consequences can be far more serious. These concerns—as well as the cost and unreliability of telecommunications in some developing markets, the limited availability of key infrastructure skills there, and a history of locating hardware and labor at end-user sites—have made CIOs reluctant to pull the offshoring lever to reduce infrastructure costs.  LMT can help you avoid these pitfalls and allow you to work smoothly and productively with your U.S. clients and peers.

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