SOURCE: Aberdeen Group

July 12, 2007 13:00 ET

Maximizing the Full Value of Sending IT Work Offshore: Are Companies Reaching Expected ROI Goals?

Strong Management, Clear Communication, and Knowledge Are the Pathways to Success and Higher ROI

BOSTON, MA--(Marketwire - July 12, 2007) - Reducing IT operating costs is no longer the main pressure driving companies to send application and development work offshore, according to a new report published by Aberdeen, a Harte-Hanks Company (NYSE: HHS).

This new report discovered that along with this pressure, Best-in-Class companies are looking for operational and process improvements, improved documentation of procedures and best practices and they are looking to place more strategic work in the hands of internal IT staff. Combined, these pressures are driving companies to look far beyond choosing just one lowest cost provider, to multiple options that extend to global centers of excellence in China, India, and Eastern Europe.

"Multi-sourcing enables customers who are familiar with complex outsourcing initiatives to diversify their application outsourcing by eliminating the geopolitical risks of having one offshore company, in only one country," said Ralph Rodriguez, senior vice president and research director, Technology Markets, Aberdeen. "In the case of offshore providers with multi-country development centers, the risk gets mitigated, but renewal leverage diminishes when renegotiating the contract terms of ongoing application development. The keys to success are based on the enterprise's experience, sophistication and knowledge of their SDLC."

This study found that Best-in-Class enterprises are currently achieving a higher ROI from their offshore outsourcing relationships due to stronger management capabilities and effective communication strategies combined with insightful knowledge of their internal business' needs and the provider market.

Best-in-Class enterprises have effectively implemented strategies and best practices to earn top-performance status:

--  They have seen a 78% gain, on average, in the amount of work their
    internal IT staff performs each week
--  They have achieved, on average, 51% of their ROI goals
    
Aberdeen recommends that enterprises looking to get more value from their offshore outsourcing relationships must recognize that India is not the only place to outsource, look to multi-sourcing IT work with two or more providers and look for providers to have the right skill sets, like cultural or language training, to make communication easier and more effective.

A complimentary copy of this report is made available due to the following underwriters: EPAM Systems, Inc., hiSoft Technology International, Ltd., Software Paradigms International, Inc., Syntel, Inc., and Zensar Technologies.

To obtain a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?cid=4098

About Aberdeen Group, a Harte-Hanks Company

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

© 2007 Aberdeen Group, Inc., a Harte-Hanks Company
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