Expect a surge in outsourcing this year, according to a new study from accounting and consulting firm BDO USA.
It found 63 percent of tech companies plan to outsource or manufacture products offshore this year, up from 35 percent in 2011 — but manufacturing makes up a big chunk of that. Still, that’s the highest rate since it began the surveys in 2008.
Its findings are based on a poll of 100 U.S. technology chief financial officers, Fox Business notes.
At the same time, 43 percent plan to boost hiring in the United States. Thirty percent said they will be hiring in research and development this year, up from 23 percent last year and 22 percent in 2011.
According to Aftab Jamil, partner and director of the technology and life sciences practice at BDO USA:
“While the drive to remain competitive has led technology companies to maintain outsourcing contracts, many are working in tandem to grow their U.S. work force to develop new and innovative products and solutions in the U.S. while outsourcing traditional ‘back office’ operations.”
Meanwhile, HfS Research reports that IT outsourcing, while able to cut costs and standardize processes, is failing to deliver on the goals of providing innovation and access to analytics as well as transforming organizations.
Phil Fersht, founder and CEO, writes in his Horses for Sources blog that IT outsourcing isn’t expected to get much better, though some companies are bringing some IT work back to the United States. Low-end work is outsourced, high-end work is retained. And Ferscht told me that companies might be totally happy with that — that they don’t want to spend more on functions such as help desk and systems maintenance and may accept less-than-stellar service in those areas.
“Ambitious CIOs these days like to focus their time on ecommerce, mobility, ‘Big Data’ and cloud strategies, and will engage IT consultants with projects when they need some high-end help, but most aren’t expecting their outsourcer to do that kind of work for them. …”
The only way for service providers to move up the value chain, he says, is to provide services to meet defined business goals.
“Simply put, IT provides a supporting utility to help achieve these business outcomes that clients want to buy, which would ideally be accessible in the cloud where business users can access their services wherever they want. The focus then shifts from providing widgets, to the actual provision of value, where providers start working with their clients to achieve business results, as opposed to creating simply a low-cost environment.”