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U.S. Beats India for IT Outsourcing Innovation and Understanding

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Fewer options for domestic outsourcing Fewer options for domestic outsourcing

Enterprise IT leaders are interested in sourcing more work in the U.S., but the reality is that they have fewer options stateside than offshore.

After more than a decade of offshore outsourcing, corporate leaders may be looking for more than just labor cost savings from their outsourcing engagements. And the new types of value they're seeking--innovation, communication skills, domain knowledge--are much more readily available in the U.S. than overseas, according to a recent survey by outsourcing analyst firm HfS Research.

There's no question domestic outsourcing is more expensive than sending IT services abroad. The 215 enterprise buyers surveyed in the September 2012 report expect to save about 16 percent when sourcing work stateside versus around 22 percent when sending work to India. But the cost effectiveness was just one of the most important criteria when deciding where to outsource IT services; workforce skills and experience, availability of qualified workers, and English-speaking capabilities were also major factors, according to the survey.

The corporate leaders also said they would consider outsourcing domestically if the costs savings were at least 15 percent while they would consider offshoring to India only for savings of at least 30 percent.

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