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Home > Business > PTI > Report

Outsourcing: Huge cost savings for US cos

January 12, 2007 11:39 IST

A vast majority of software companies are able to realise between 80 to 100 per cent of their cost savings goals from offshoring, according to a survey.

A Software & Information Industry Association report on the state of global software development showed that 75 per cent of companies that offshore, report a positive impact on revenues and 88 per cent report a positive impact on profits.

David Thomas, executive director of the Washington D.C. based SIIA, said the report shows that overall, companies plan to increase their global development efforts.

In fact, 84 per cent of the survey respondents mentioned growth strategy as an "important" driver for offshoring, with speed to market and productivity as the next most important drivers, reported e-week, an online publication.

Meanwhile, according to the respondents, there was no single model identified as most optimal for offshore development, as about half of them worked with an offshore provider.

One-third said they operate an offshore subsidiary, and about one-fourth of the respondents said they use a hybrid model of both approaches.

In terms of increasing the use of outsourcing, 57 per cent of the 114 survey respondents said they have "significantly" increased offshore work in the past 18 months and that they plan to increase it even more in the next 18 months, SIIA officials said.

"Global software development is in the process of transforming the nature of the US software industry," said Ken Wasch, SIIA president, in a statement.

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