A recent CIO Insight survey offered the usual seemingly contradictory conclusions on outsourcing. Example: The amount companies spend on offshoring exceeds the amount spent with domestic providers, 52 percent to 48 percent. Yet respondents ranked offshore providers lower than domestic providers in five categories, including meeting quality expectations and meeting ROI expectations.
A follow-up story featuring data from the same survey played up the angle that SMBs are more satisfied than their larger counterparts with their outsourcing experiences.
SMBs were more satisfied with the performance of their outsourcing providers in three of the five aforementioned categories, including meeting ROI expectations and meeting quality expectations.
Could it be that SMBs' expectations were easier to meet because they weren't necessarily expecting to save lots of money? Sixty-eight percent of large companies cited cost reduction as a primary reason for outsourcing, compared to 41 percent of SMBs.
Instead they were more likely to seek help for specific projects, tapping outsourcing providers for chores that couldn't be done in-house (56 percent of SMBs, vs. 36 percent of large companies.) SMBs were also far less likely than large enterprises to eliminate in-house IT jobs in favor of outsourcing providers.
Interestingly, the big companies appeared to be harder on themselves than SMBs, as they were far more likely to cite a lack of skill in negotiating and writing contracts and in overseeing outsourcing relationships as reasons for their dissatisfaction with outsourcing.
Yet 57 percent of SMBs plan to spend the same amount on outsourcing in 2007 as they did in 2006. Meanwhile, 47 percent of larger companies will increase outsourcing budgets this year. A bit contradictory, no?